World Class Mergers & Acquisitions  |  For Companies $5 Million to $100 Million in Revenue

Mergers & Acquisition FAQ

Q: When I sell my business, what assets can I expect to keep in the transaction?

A: When a business is sold, the asset purchase agreement dictates which assets are sold and which assets are kept by the seller.  Typically, the cash and accounts receivables are not sold along with the other assets as the seller keeps these in order to pay outstanding debts of the business and provide the buyer with free and clear ownership.  It must be remembered that an asset sale means the corporate structure is still in existence and may have to be dissolved after the sale.

Q: I am interested in selling my business, but I do not have children and my key employees are looking to go elsewhere.  What should a business owner do in this situation?

A: The best thing to do in this situation is to not panic and do something reckless like sell the assets at a low value.  Most businesses have some intrinsic value within them.  At a minimum, an advisor should be consulted in order to get the best possible value for the business.  In this situation, 1) the key employee and employer should consider entering into a mutually beneficial employment contract, and 2) a written plan should be developed, with the key employee, as to how to proceed to grow and develop the business.

Q: Even though it is mid-year, is there any tax or business advice for the business owner that would be worthwhile for the current tax year?

A: No matter what time of the year it is, there is always an opportunity to be gained through business and tax planning.  The subject of which will be discussed in the next newsletter.

By: Basi & Basi at the Center for Financial, Legal and Tax Planning for Transworld M&A Advisors