The sale of shares in a company that owns a business is another means of selling a business although it occurs far less frequently.
It involves a sale of the company “warts & all” to the buyer, meaning that the buyer acquires all of the company’s assets – including the business – and all of its liabilities.
This method of acquisition requires a buyer to be satisfied that the company is ‘clean’. In particular, the buyer must be satisfied with the following:
- Any potential for customer or supplier disputes
- Adverse taxation liability
- Latent liabilities
- Incomplete regulatory compliance