Selling A Business Part 1: Selling Shares

selling a business
Business Lawyer Asheville, Hendersonville and WNC

Selling a business is a complicated business transaction, but depending on the nature of the business and the assets being transferred, there’s ways to make it go easier. It’s important that well before the actual sale date the business books and records are in order, that all parties know what is and is not being transferred from the seller to the buyer, and that all parties have had a chance to review the documents memorializing the sale / purchase.

Selling a Businees: Two Types of Sale

Right off the bat when selling your business, there’s two types of sales: a sale of shares in the business (like you’d buy shares of McDonald’s corporation). This could be a sale of all or part of the shares depending on whether the current owner wants to keep some ownership, and thus control and profit, in the company (more common with larger revenue businesses).

As all things in life, there will be tax consequences of a share sale to the seller of the shares – capital gains for sure.

Another reason to sell shares and not assets is the tax consequences if you need a write-off for capital losses, but hopefully that won’t be your case. Share sales are fairly simple to put together. In the old days we might just exchange money for share certificates. Today, however, most businesses are “uncertificated”, that is, shares are kept track on a ledger but paper certs aren’t issued. In that case we put together a share purchase agreement setting forth the terms.

Like any business sale, there may be a non-compete required from the seller; or often as I like to counsel, a departing owner may stay on board as a consultant for a short period of time, at an hourly rate, to help the new owner transition.

Contact me if you have any questions on business transactions. In western North Carolina, Asheville, Waynesville, Hendersonville at (312) 671-6453.

Email me at:

Be sure to check out my other blog posts HERE.  Be sure to listen to my podcasts with Matt Mittan at BizRadio.US