Depending on a seller’s goals, some or all of their business assets may be sold as part of an asset sale. During an asset sale, ownership of the assets in question is transferred to the purchaser.
If a business sale in its entirety is chosen, rather than only assets, this is called a share sale and the business’s assets and liabilities as a whole transfer to the purchaser. Business sales are complex transactions and sellers should obtain professional guidance on their best options.
Selling My Business are professional business sales brokers with extensive industry-wide experience and can provide the level of support and understanding needed.
What happens to business assets in an asset sale?
An asset sale is a partial sale of a business whereby the owner selects certain or all of their company assets to sell. These can be tangible balance sheet assets, such as machinery and equipment, or intangible assets including intellectual property.
The assets put forward for sale are professionally valued and marketed and the price is negotiated between buyer and seller using business sales experts. Once a deal has been struck, an asset purchase agreement is drawn up and ownership is transferred to the purchaser on completion of the transaction.
Why choose an asset sale?
Company assets are sold in this way for a variety of reasons – perhaps they are linked to a part of the business that is becoming unprofitable, for example. By releasing them for sale the business owner can generate cash to boost other, more lucrative areas of the business.
The purchaser will have bought the specific assets with a view to improving their own business – they may offer the means to boost productivity, for instance, or otherwise enable the buyer’s business to grow.
A seller might choose an asset sale as a partial exit from their business, or maybe as a precursor to winding up the business affairs completely and liquidating the company once all creditors have been repaid.
- Previous sales and acquisitions experience
- Sector specialisms and average success rate
- Sales value expectations and growth potential
What happens to company assets after a share sale?
During a share sale, the purchaser takes ownership of the entire business rather than just the assets in isolation. This can be a riskier option for buyers as they may not be fully aware of all the liabilities and obligations that exist.
This type of business sale involves the buyer acquiring the shares of the company as well as its assets, liabilities, and obligations under a business purchase agreement. The assets they acquire are then used in the normal course of business, which has been purchased as a ‘going concern’.
Professional advice on asset sales and share sales
It is crucial to seek professional guidance if you are considering selling your business assets as part of an asset sale, or undertaking a share sale. Selling My Business are business transfer specialists with a long history of successful transactions.
Our team will ensure you understand what happens to your company assets after selling, so you make the right choice according to your goals. Please get in touch to find out how we can help – we offer free, same-day consultations and work from offices around the UK.