Tax aspects of purchase and sale of businesses
Before venturing into acquiring or selling a business, it is crucial to analyse and to discuss the tax consequences of such a transaction, the tax aspect being as important as the commercial one and having a determining influence on the form the transaction will take, from both the point of view of the seller and that of the purchaser.
It is crucial to determine if you should sell the assets or the shares of the business and to structure the method of payment so as to reduce or defer taxes. If you are the seller, you should try to benefit from certain tax deductions such as the capital gains deduction.
If you are the buyer, it is important to understand all future tax consequences, of either the purchase of assets or the purchase of shares in order to minimize taxes payable in the day to day business or in the case of an eventual sale.