The Franchise & Business Law Group regularly represents clients as they face the sale or purchase of a business or its assets. Every transaction, whether small or large, is important to our clients and we work hard to provide professional, integrated and competent legal advice. Business and Asset Purchases generally fall into three categories: (1) asset purchases; (2) mergers; and (3) stock purchases. These types of transactions are governed by state and federal laws (the FTC and SEC both regulate the various types of mergers and acquisitions).
Asset Purchase. The assets in an asset purchase can be tangible (equipment, furniture, property) and intangible property (trademarks, goodwill). The transaction can generally be set up in any way the parties to the transaction would like, including the assumption of some, all or none of the seller’s debts and liabilities, the continued engagement of employees, and the fulfilling of certain contracts.
Merger. In this transaction, two companies combine to form a single legal entity. The surviving entity will assume all of the liabilities and obtain all the assets of the company that disappears in the merger. The applicable state must issue a “merger certificate” to complete the merger.
Stock Purchase. This transaction is effectuated by one individual or entity purchasing all of a portion of the stock of an existing stockholder. In purchasing the stock, the new owner accepts all the liabilities and assets that are attached to the stock or ownership unit.
The attorneys with the Franchise & Business Law Group, regularly handle asset purchase agreements for our clients, and are able to structure the agreement to best meet their needs.