Selling a business can be difficult and costly if sell does not understand the options. You have more options than they may realize. Not doing your homework and taking the wrong approach has serious financial consequences for the seller and company, so it pays to know the positive and negative options.
The simplest way to exit a business is probably an outright sale. This approach makes sense when an owner’s family members have no interest in taking it over or when the owner can’t figure out how to take the company to the next level, meet challenges that may have arisen, or just getting burned out.
There are two ways to cash out: An owner can sell the company’s assets outright, or he can sell his stock in the company (or units if it is a limited-liability company). Stock sales tend to benefit the seller, while asset sales are more beneficial to the buyer.
Asset buyers are getting the company’s customers, facilities and physical equipment, as well as intangibles such as goodwill and trademarks, and as a result the buyers are generally protected against prior claims against the business. For example, the previous owners would most likely be responsible if an employee hired on their watch filed some sort of lawsuit plus other types.
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