Two common approaches are a purchase of ownership interests and a purchase of specified assets. Brown & Blaier helps clients consider the advantages, drawbacks, and diligence questions associated with each.
In a stock or membership interest purchase, the buyer acquires ownership interests in the company. The company remains in place, so its existing assets, liabilities, and contractual arrangements are central to the review. Continued operations, change-of-control provisions, and required approvals need attention.
In an asset purchase, the parties identify the assets and obligations included in the deal. These may involve equipment, real estate, intellectual property, and customer contracts. The agreement should address assumed and excluded liabilities, transfers, consents, and transition arrangements. The structure alone should not be treated as eliminating every potential liability.