A common effective business strategy is to purchase another company’s assets for growth. This is usually accomplished with an “Asset Purchase.” Asset purchase transactions require legal guidance to protect you from liability while ensuring you actually receive clear title to and the benefit of the assets you wish to acquire.
What is an Asset Purchase and How Does it Usually Work?
An asset purchase allows you to selectively purchase the strategic components you require from another business or competitor without assuming any of the debt or liabilities of that company, as you would in a “stock purchase.”
When you purchase another company’s assets for growth you are able to quickly add exactly what is needed to your own LLC or corporation including:
- Real Estate
- Vehicles, Tools, Machinery and other Fixed Assets
- Inventory or Product Lines
- Customers
- Goodwill
The additional assets increase your bandwidth and capacity, allowing you to grow the number of customers you serve, the array of products you can offer an existing customer base and/or the vertical market or geographical region you wish to serve. An asset purchase is an excellent strategy for moving into new niche vertical markets that compliment your existing business strategy. There are tax ramifications to an asset purchase when compared to a stock purchase, and some portions of an LLC or corporation cannot be acquired through an asset purchase.
There can be substantial risk associated with these transactions and that is why it is important to work with the Watkins Firm on your acquisition. You want to make sure targeted assets have clear title and that you have carefully researched the condition of the asset(s). Minority shareholders can object to these types of transactions and it may be necessary for your Watkins Firm attorney to help to protect your interests while managing the concerns of minority shareholders.
The Experienced Mergers and Acquisitions Attorneys at the Watkins Firm Help You to Purchase Another Company’s Assets for Growth
The experienced San Diego mergers and acquisitions attorneys at the Watkins Firm have more than four decades of experience in these matters, and can help you to purchase another company’s assets for growth while protecting your own interests and placing you in the best position to grow and succeed. We provide experienced, proven insight and advice regarding questions about your plans to expand business opportunities and acquire another business or its assets. We invite you to review our podcast Episode 13 – Mergers and Acquisitions as well as the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today.
