Also in the news...
France: providing services and travelling for business
Guidance for UK businesses on rules for selling services to France.
Living in the USA
Information about moving to, living or retiring in the USA – including visas, working, healthcare and driving.
Trade with Liechtenstein
How you import from and export to Liechtenstein
UK trade with the United States: Impact of tariffs on imports and exports of goods
A closer look at the goods the UK trades with the United States in the context of trade tariffs.
Simplified rates for bringing personal goods into the UK
Find out about the simplified rates of customs and excise duty used when you declare your personal goods online.
Buying a Business in Canada. Shares vs Assets
When buying or selling a business, many entrepreneurs are being presented with two options – buying the shares of a business or buying its assets. Many wonder what is the difference between these two processes and why is it important to some parties to insist on one type of a transaction or another.
Shares purchase. This transaction results in the shares – the ownership and control of the actual legal entity, the company or the business, being transferred to a buyer. The resulting consequences of the transaction is that all business liabilities and obligations are being transferred as well. These might include such liabilities as product liability, warranty, liability for environmental damages, employment issues and historical tax liabilities. In some instances, the real value of the liabilities might become known only years after the transaction and might significantly exceed the actual price of the transaction. This is why Sellers would usually prefer this type of transaction – it releases them from almost all future claims and demands relating to the business.
Assets purchase transaction results only in a transfer of assets of a corporation from one “owner” to another. The company and all its existing liabilities remain with the seller, while the buyer purchases only tangible (equipment, inventory, building etc.) or intangible (business name, intellectual property etc.) assets of the business. This type of a transaction would usually be preferred on the buyer since they do not acquire any of the business’ existing liabilities and can start business operations “anew”.
There are, of course, many exceptions for these general rules and a support of a professional person (usually lawyer) is highly advised for these types of transactions. At CBES – Canadian Business and Enterprise Services, we offer a comprehensive approach where our professional advisers will assist you in evaluating the deal and adopting the most beneficial and preferred for you approach.