Sale or purchase of shares in a Company
Often when a purchaser is looking to acquire a business, there can be significant tax and transfer duty savings when that purchaser instead acquires shares in the Company which owns that business.
However, the acquisition of a Company often comes with additional risk as a Company comes along with all of its history and liabilities.
Issues such as litigation, taxation, debt, breaches of environmental law, employee issues and a myriad of other matters can mean that the Purchaser of a Company can inherit more expensive problems than they would have had they simply acquired the business.
That being said, there are strategies that can be employed to reduce this risk, including a thorough legal and accounting due diligence on the target company, provision of warranties by a vendor, earn outs and retentions and many other strategies.
Hillhouse Burrough McKeown has broad experience with share sales from both the vendor and purchaser side and can provide detailed advice on the issues that can arise in this type of transaction.