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Plano Business Sale Attorney: Choosing the Best Method for the Purchase or Sale of a Business

 Posted on January 24, 2023 in Business Law

Plano Business Sale Attorney

Plano, Illinois Purchase and Sale of Business Attorney

Many considerations need to be made before choosing the best method for the purchase or sale of a business. Both parties want to make sure they have as few headaches as possible. To make this happen, it is crucial to know the make-up of the business and whether the Buyer is looking to purchase the whole business or only particular assets. Based on these answers, the Buyer and Seller can choose the best method to ensure the sale goes through smoothly. Three different methods can be used for the purchase and sale of a business. These three methods are a Merger, an Asset Purchase, and a Stock Purchase. Here, at Gateville Law Firm, we are Plano Il LLC and Business Attorneys assisting entrepreneurs, business owners, and franchise owners with their legal needs.


A merger is an option that should be selected when both the buyer and the seller are businesses. This is because a Merger takes place when two separate businesses either merge to create an entirely new business or merge with one of the separate businesses surviving and incorporating the other business. A benefit to a Merger is that the business is transferred, so a detailed list of assets is not required to be created for a Merger to work.

Although a list of assets is not required, both businesses must discuss their respective liabilities before the Merger takes place. This is because the surviving entity will then be responsible for the liabilities of the company that merged into it. If these liabilities are severe, there could be more problems later. Another factor to take into consideration is how the shareholders of the company feel about the Merger occurs. This is because majority shareholder approval is required for the Merger to go through. If there is not a majority vote in favor of the Merger, it cannot happen.

Asset Purchase

An Asset Purchase is a method that is favorable to a buyer and seller when the buyer is only looking to buy assets of the business, such as contracts or intellectual property. It is important to remember that with assets come liabilities. This means that, whatever assets the buyer chooses to purchase, the associated liabilities will transfer with that asset. Whatever assets are not sold to the buyer will stay will the selling company and will need to be accounted for when the company is winding down to dissolve.

On its face, an Asset Purchase is very favorable to a Buyer. The downside of an Asset Purchase is that the sale will take longer than if the Buyer was purchasing the company in its entirety. This is because the parties must go asset by asset and determine whether the Buyer wants to purchase it or leave it with the selling company. The seller should determine whether they want the business to be sold entirely or if only certain assets are to be sold. If the seller wants to sell the business entirely, an Asset Purchase is not the best idea because the Buyer has the option to not buy the entire business if they so choose. 

Stock Purchase

Another method to consider is a Stock Purchase, which takes place when the Buyer purchases a controlling majority of the company’s voting shares. This is a benefit for the seller because they are then relieved of future liabilities. An added benefit is that, unless agreed upon differently, the legalities of the company remain the same, meaning that no drastic changes will take place. This reserves the status quo of the business and allows for a seamless transition of ownership. 

A key consideration for this type of purchase is whether the selling company has minority shareholders. This is essential because a Stock Purchase does not require the Buyer to purchase all voting shares, only the controlling majority. This means that, if there are minority shareholders that still have a stake in the company, they will have the ability to vote on the sale of voting shares and may prevent the transfer from taking place.

Business Attorneys Near Plano, Illinois


At Gateville Law Firm, LLC, our attorneys, and staff are eager to assist in determining the best method for the purchase or sale of your business. We have extensive knowledge in the realm of business law and are happy to assist. We are Plano Business Attorneys specializing in business purchases and sales, business structure and asset protection, and high-growth business start-up law. To learn more about these methods of transfer, or to schedule a consultation to decide the best method for you, call our office at 630-864-5788.

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