Buyers acquire existing businesses or companies for a variety of different reasons. It may be seen as a simpler way of starting a business, an opportunistic management buy-out (MBO) or management buy-in (MBI) or may be part of an overall growth strategy.
Whether a business owner is an individual, part of partnership or a shareholder in a company (or otherwise) it is inevitable that, at some point in time, the business owner will have to transfer the ownership of or sell its business (and/or its assets) or the shares in its company. Accordingly, business owners will usually try to find a buyer for their businesses or companies during or towards the end of their working life.
If you are buying a business or company then, in order to maximise the benefits and minimise the risks involved, you need to be in control of the acquisition process from start to finish. This requires detailed thought, planning and investigation. The earlier you start the business purchase or company purchase planning process, the better your chances of getting more value from your acquisition and reducing your risks.
Most prospective business buyers have no (or no significant) experience of the task of buying a business. In addition, they are unlikely to have much opportunity to learn from mistakes made in buying a business unless they are a serial entrepreneur or investor. Buying a business is likely to be one of the most difficult challenges that a business owner will ever encounter.
Orr Litchfield Solicitors can help you prepare for the purchase of a business or company and guide you through the sale process in order to help you achieve the best possible outcome for you and any others for whom you wish to provide or whose interests you wish to protect.
There are many ways in which existing or prospective business owners can purchase businesses. The most common methods of purchasing target businesses are:
(a) Company share purchases,
(b) Business purchases (as a going concern), and
(c) Asset purchases.
Where the target business is owned through a company structure, each of the shareholders will own shares in the company. The company will own the business and its assets. The shareholders of the company may be individuals and/or other companies (or other legal entities). A buyer may be able to buy some or all of the shares in the company from the existing shareholders.
The business and its assets will continue to be owned by the company whose shares are being purchased.
You can read more about buying shares in a company on our webpage on Share Purchases & Sales.
Where there is no company structure (for example, where the business is owned by a sole trader or partnership), a buyer may purchase the whole or part of a business as a going concern together with all or some of the assets of the business from the business owner(s).
Alternatively, where there is a company structure, a buyer may purchase the whole or part of a business (and all or some of the assets of the business) from the company rather than purchasing the shares of the shareholders in the company.
You can read more about buying a business as a going concern on our webpage on Business & Asset Purchases & Sales.
Rather than buying the business as a going concern, a buyer may purchase some or all of the assets of the business (for example, intellectual property) from the business owners rather than buying the business as a going concern.
You can read more about buying the assets of a business on our webpage on Business & Asset Purchases & Sales.
You may also be interested in the following articles on buying a business or company by Orr Litchfield Solicitors:
If you would like more information about buying a business or company or would like to discuss a potential or existing business or company share purchase, please contact us by telephone on +44 (0)20 3126 4520 or +45 38 88 16 00 or by email at firstname.lastname@example.org or complete an Enquiry Form.