The asset purchase structure is often used when the buyer wants to acquire a single division or business unit within a company. However, it can be complex and time-consuming, as additional efforts are required to identify and transfer each important asset. If some assets, such as. B equipment, can easily be transferred by a contract of sale or other transfer of title, other assets, such as intellectual property or real estate, require a separate assignment or an instrument with different mechanisms and formalities. Some assets, including many authorizations, are not transferable at all. A share purchase is conceptually easier than an asset purchase. Therefore, in most cases, it is only a simpler, less complex transaction. This option is especially popular with buyers who are only interested in a part of a business, perhaps a particular division or unit. But it can be more complicated than a share purchase. In some cases, and in order to avoid existing liabilities of the covered entity, the buyer will establish a subsidiary to either absorb or be absorbed by the target enterprise. This, along with other regulatory requirements, can make a merger more complex than a share purchase, for example. In the event of a sale of assets, the seller remains the rightful owner of the business, while the buyer retains individual assets of the business such as equipment, licenses, GoodwillGoodwill Impairment AccountingA Goodwill Impairment Impairment Impairment A, when the value of goodwill in a company`s balance sheet exceeds the book value tested by the auditors, resulting in depreciation or impairment. In accordance with accounting standards, good business or good good good must be recognised as an asset and valued annually.

Companies should assess the existence of depreciation, customer lists and inventory. Summary: A merger means that two companies are literally bundled into one company. In the most common type of merger (a “reverse triangular merger”), the buyer will create a new 100% subsidiary (often referred to as a “merger subject”) that will be transferred directly to your company, with the subsoil of the merger in the process of disappearing as a full-fledged legal entity once the merger is complete. This will result in the buyer owning 100% of the merged entity (the “survivor” who, from the legal person`s perspective, is your original business) and the selling shareholders will receive a market payment. In the case of an asset purchase, the buyer acquires only the tangible and intangible assets – and only buys back the debts – that are explicitly identified in the contract of sale. Buyers often prefer this structure because of their flexibility. They can choose the assets they want to acquire and the liabilities they want to take and leave the rest. Since the commitments assumed by the buyer are expressly stated in the sales contract, this structure may allow a buyer to avoid unavoidable liabilities or unknown liabilities, although some laws (e.g. environmental and tax laws.B) and doctrines (inheritance liability) may nevertheless impose liability on the buyer.

When buying assets, the buyer explicitly buys detailed assets and perhaps a few commitments. In this type of purchase, only the assets and liabilities that are part of the transaction are subject to due diligence. Asset purchases usually protect the buyer from unexpected debts. The purchaser does not experience the dilution of ownership that occurs during a merger. In the context of a merger or acquisition transaction, asset sales agreements have a number of advantages and disadvantages compared to the use of an equity (or share purchase) or merger agreement. In the event of a capital acquisition or merger, the buyer receives all the assets of the target entity without exception, but automatically assumes all the liabilities of the targeted entity. In addition, a contract for the sale of assets not only allows for the transfer of part of the assets (which is sometimes desired), but also allows the parties to negotiate the commitments of the objective expressly assumed by the buyer and allows the buyer to leave behind liabilities that he does not wish to accept (or of which he knows nothing). . . .