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PURCHASE AND SALE OF YOUR BUSINESS

Author: dev
Date: August 6, 2020

How to sell your business?

  • By share purchase & sale
  • By asset purchase & sale

What is sale of assets?

  • An asset sale requires transfer of right and liabilities to your assets.
  • Examples of assets: real properties, permits and license, personal properties like equipment and vehicles, inventory, accounts receivable, contract obligations, goodwill, intellectual property rights, etc.
  • Each asset to be purchased by the purchaser, with representations and warranties, exceptions or exclusions, must be dealt with individually to ensure good and clear title to be transferred legally.
  • Therefore, a prudent prepared asset purchase and sale agreement is very important to your transaction to secure your interest and proper your transaction and allocate your purchases price as agreed.

What is sale of shares?

  • All the assets of the target company remain within the company. The only required transfer is the shares owned by the shareholders who invest the company and run the business of the company.  The agreement should be carefully describing the subscription of numbers and class of shares and its ownership.
  • However, parties still involve in discussion of material contracts liabilities, real property leases and potential restrictions against the change in control of the company might be subject to consent of another party.
  • Therefore, it’s very critical to contract a lawyer to scrutinize your agreement, conduct due diligence and do all the legal work to protect your transaction would be properly and legally transferred, and avoid future any potential risk and losses.

Please contact us JZW Lawyer for professional legal advice.

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