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Identify what changes hands
In an asset sale, the agreement identifies the assets and any agreed arrangements being transferred. The seller may retain the entity and items outside that scope. In a share sale, the company continues to own its assets and carry its obligations while its shareholders change.
Write an inclusion and exclusion list. Premises, equipment, stock, intellectual property and working capital should not be left to assumptions about what “the business” means.
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Follow the contracts and obligations
Check leases, customer agreements, supplier contracts, finance arrangements and licences. Transfers, consents and change-of-control provisions may need attention depending on the documents and structure. Employment matters also need specific advice.
Our buyer due diligence guide helps organise the investigation. Ask your legal adviser to identify requirements in the actual contracts rather than assuming one structure avoids all complications.
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Connect the price to the structure
Compare what each proposal includes, the treatment of debt and cash, stock adjustments and any deferred payments. Two headline prices may describe different packages. A valuation discussion needs to use the same transaction assumptions.
Tax treatment also differs by the facts and items sold. Our sale-tax preparation guide explains the questions to take to an adviser, including price allocation and GST.
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Keep diligence and documentation aligned
Record which findings affect the agreement, the timetable or the commercial decision. If the structure changes during negotiation, revisit the due-diligence plan and the assumptions in your financial analysis.
We help owners connect transaction and transition decisions with valuation, funding and preparation. Legal and tax advice should address the final proposal, not a superseded version.
Use this in your business
Compare the two proposals
| Question | Asset sale | Share sale |
|---|---|---|
| Subject | Specified assets and agreed arrangements. | Shares in the company. |
| Entity | Seller's entity may remain with the seller. | Company continues with changed ownership. |
| Investigation | Transferred items, terms and required consents. | Company's assets, liabilities and history. |
| Price mechanics | Asset scope, allocation and adjustments. | Equity, debt, cash and agreed adjustments. |
| Advice | Contracts, employment, tax and GST. | Share terms, company risks and tax. |
A practical example
Compare equal packages before equal prices
One offer might include stock and selected equipment while another assumes ownership of the company with its existing financing. Put both proposals into a common schedule before comparing them. The difference may be in the obligations and assets included rather than the buyer's view of operating value.
Your next move
Discuss the structure of your proposed transaction
Bring the proposed structure and the main deal terms. We can help identify the commercial assumptions that need to stay aligned across valuation, diligence and advice.
Discuss the structure of your proposed transaction