The Financial Planning Association of Canada | E132

The Financial Planning Association of Canada | E1312

In this informative episode, Jason Pereira, a senior partner and financial planner, provides a detailed breakdown of the two main approaches for selling or exiting a business: share sales and asset sales. He compares these approaches to selling a house versus selling the furniture inside. Key points addressed include tax implications, legal liabilities, and the overall sale process for each method. Key takeaways include how share sales can offer tax advantages like the lifetime capital gains exemption and simpler transaction mechanics, while asset sales can result in a more complex and paperwork-heavy process but allow the buyer to cherry-pick desired assets. This comprehensive guide aims to help Canadian small business owners make informed decisions when planning their business exit. 

Full Transcript

FPCBO 132 - Tax & Legal Implications Of Selling Your Business

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Jason Pereira: [00:00:00] Welcome to the Financial Planning for Canadian Business Owners podcast. You will hear about industry insights with award-winning financial planner and entrepreneur Jason Pereira through the interviews with different experts with their stories and advice. You will learn how you can navigate the challenges of being an entrepreneur plan for success and make the most of your business and life.

And now your host, Jason Pereira.

If you're a Canadian small business owner thinking about selling or exiting your business someday, you may have heard that there are two main ways to do this. Selling shares of your company or selling the assets of your business. It's a bit like choosing between selling the entire house versus selling the furniture and appliances inside.

The approach you pick has big implications on your tax bill, your legal liabilities, and even the entire sale process. [00:01:00] I'm Jason Pereira, senior partner and financial planner will give financial, and today I'm gonna break down the key differences between share sales and asset sales. We'll cover how each sale works and what that means for your tax bill and liabilities.

One of these can save you a lot of taxes and each of them affects your liabilities and responsibilities that you leave behind. Before I jump into taxes and legal stuff, let's clarify what we actually mean by selling shares or selling assets. Understanding the process of each, we'll set the stage.

Selling shares, you're selling the ownership of the company, the buyers purchasing your shares, and possibly the shares from other owners, and thereby takes over the company entirely itself. The corporation is intact, and with all this stuff, the assets, the contracts, the employees, you name it, intact, only the ownership changes.

It's as if you handed over the keys to the entire shop. Meanwhile, when selling assets, the company which you own sells some or all of its individual assets to a buyer. This could include equipment, inventory, trademarks, client contracts, even [00:02:00] goodwill. The intangible reputation of your business. The buyer's not buying your company as a legal entity.

It's buying the things from your company. After the sale, your corporation might be an empty shell holding just the sale proceeds, and the buyer might put the purchased assets into their own company. It's akin to having a yard sale for your business and selling off the parts rather than selling off the business as a whole unit.

We'll go a bit deeper in each method. Now, in a share sale, you and your fellow shareholders sell your shares of the corporation to a buyer. The result, the buyer steps into your shoes As the new owner of the corporation and by extension the business, here's the key point. The company itself doesn't change.

Only the ownership does all the business' assets and liabilities remain in the company, but now the company is owned by a different buyer. Process wise, a share sales, relatively straightforward on paper. The main thing that changes hands in a share purchase agreement is the share certificates. Think of it as transferring the title of your car.

Here. You're transferring the title of [00:03:00] your company. You and the buyer will negotiate a price for these shares often based on the value of the business assets, the brand, the customer base, and et cetera. And on the closing day, the shares were legally transferred to the buyer. Because only the shares are being transferred, the transaction tends to involve less paperwork than an asset sale.

You typically don't have to retitle each asset or property or reassign contracts and et cetera. We'll see about the exceptions. In a moment though, the business carries on under the same corporation as if nothing happened, except now you, the former owner walks away with the sale proceeds and the buyer owns the shares.

Here's an example. Suppose you own your company as a sole shareholder in the share sale. You might sell 100% of your shares to Jane Beyer. Jane now owns the company. The company still owns all the widgets, inventory factory leases, company bank accounts, and the name is still the same. But Jane controls it because now she's the share owner.

You effectively have handed over the entire box. The company, as is a assure sale, tends to be simpler for the seller and more of a clean break. [00:04:00] However, because the buyer is taking on the company as is, they will usually do this with extensive due diligence. Basically a deep audit of your books, your records, your contracts, and et cetera, and will often require you to make promises known as representations or warranties about the company's condition.

After all, you're buying everything, what's and all, so they want to know what they're getting. We'll talk about the risks and liability side in a bit. But the buyer in a share sale inherits all of the company's history, which can include hidden debts and skeletons in the closet. That's one of the reasons why it's often a cautious sale when shares are sold.

From your perspective as the seller, once those shares are sold, you're generally free and clear. Future obligations you would typically resign any directorship or officer positions in the company. At the closing a step away, all the business contracts, whether they be with customers, suppliers, or employees, continue under the company as they did before.

So there's usually less disruption to operations. One caveat. Some contracts or leases have change of control clauses. That is to say that if a company ownership changes, consent is [00:05:00] required or the contract terminates. So even in a share sale, you may need to get third party consent from certain key agreements like a landlord or a major client contract.

But this is a case by case basis. Overall though, selling shares is often described as a simpler term for transaction mechanics. In a share sale of a company with multiple shareholders, typically all or most of the shareholders must sell their shares together to give the buyer control. This means if you have a business partner or partners, you need to have them on board with the share sale for the entire company.

Each of you would've to sell your own shares or the portion of the shares that you own for the proceeds. It is possible that when a partner sells out, others can keep their shares so that the buyer becomes a new partner in the company. But it's more likely that a partial sale or buyout, rather than an exit of the whole business will result in other complications and negotiations.

In this video, we'll be focusing on outright share sales and exits selling the entire business, but keep in mind, share sales can be flexible, they can be all or nothing events or somewhere in between. [00:06:00] Now let's switch gears to asset sales. In an asset sale, a corporation which you own agrees to sell identified assets to a buyer.

Instead of the buyer acquiring your shares, they may set up their own company or use an existing one to buy things like your equipment, your inventory, intellectual property such as patents and trademarks, customer lists, contracts, even the brand name or goodwill of the business. Essentially, you'll list out everything you own.

They will choose what they're gonna buy in the asset sale and purchase agreement. Anything not listed or included in that contract stays with the original company. The result after Anas sale is that the buyer owns the specific assets and can now operate the business with them. Often they'll continue under the same business name or in a new business under a new structure, and your company is left with whatever was sold.

Usually that means being left with cash proceeds after the sale, and perhaps some leftover assets and liabilities that the buyer didn't take on. Process wise, asset sales can be more complex and paperwork heavy. Each asset may need to be legally transferred. Here's some examples. If you're selling vehicles or real estate titles need to be transferred.[00:07:00]

If you're selling contracts or leases, you may need the other party to consent formally to assign those agreements to the buyer. If you have permits or licenses, those might need approval to transfer, or the buyer may need to apply for new ones. For intangible assets like trademarks, you need to execute trademark assignment documents and et cetera.

You can imagine that this will generate a lot of documents and legal steps, especially if the business has many assets In contrast to a share sale, which is one big transfer of shares. An asset sale could feel like a series of many transactions each of their own. It can often be complex and more time consuming.

Also, after selling the assets your corporation. That is a, the seller still exists. It's essentially now a holding company holding the proceeds of the sale, and any previous liabilities and assets left behind, you'll usually wind up or dissolve the corporation afterwards. But that's an extra step and can only be done after the obligations have been settled.

In other words, unlike a share sale where your company effectively goes to the buyer in an asset sale, you have to decide what to do with the leftover corporation and entity, which [00:08:00] could involve additional accounting, legal fees and taxes, or even more complications. More on that soon. Let's revisit the previous example.

Instead of selling shares to Jane, let's say you did an asset sale. The corporation sells this inventory. It's widget making machines, customer lists, company name, brand, and logo to Jane's newly formed company. Jane's Company pays you $1 million for those assets. After closing, Jane's Company owns all the assets and continue to run the widget business.

Maybe even have the same name that she's buying the rights to. Your company still exists, but now it has a million dollars in cash and maybe a few other things like vehicles or old receivables, and more importantly, any of the debts or pending bills that weren't part of the sale. So you still own a company, but essentially it's an empty shell that needs to be settled and leftover.

Liabilities need to be paid off before it can be closed. Uh, you as a shareholder will eventually want to pull that million dollars out yourself, and this is where taxes come in, which we'll discuss at some point. One way to think of an asset sale is as cherry picking the buyer. [00:09:00] Usually cherry picks the parts of the business they want to leave behind, and the parts they don't wanna leave behind.

This can include leaving behind certain liabilities or contracts. For example, a buyer might say, I'll buy your customer contracts and your equipment, but I'm not taking the lawsuit you're dealing with, or the bank loans. Those stay with the company. As a seller, you have to deal with what's left behind.

You may have to pay off the loan from the sale, money handle, lawsuit, et cetera. This also means that any future liabilities from the business you conducted while you own the operation, stay with you and don't pass on to the buyer because of this ability to pick and choose. Buyers often prefer asset sales.

It's low risk for them. They can often avoid inheriting unknown problems, but for you, the seller, it can be less ideal due to the complexities and as we'll see, potentially higher tax bills. If you have co-owners shareholders in a company, an asset sale means that a company will sell assets and then the co-owners will split the remaining cash in the company after tax via dividends or liquidating distributions.

You're still in this together in the sense that the decision to sell the assets affects everyone, and the company's proceeds belong [00:10:00] to all of the shareholders. In terms of decision making, typically the board and shareholders of the company must approve an asset sale. Usually a majority of the shareholders are needed for approval.

So just like a share sale, everyone has to agree on the plan. So asset sales are generally used when the entire business can be sold off or shut down. If one partner wanted to continue on with the business, usually you wouldn't have a full asset sale. You'd arrange some sort of shared transaction or buyout for them instead.

So when it comes to how you'll sell your business, the key takeaways so far are that in a share sale you're selling the entity the buyer takes on the company as is. It's a simpler transaction 'cause they're just buying out the share. In an asset sale, you or your company are selling individual items.

It's a more complex transfer because each asset needs to be documented for its own individual specific handling. Your company remains to be wrapped up amongst other things. The buyer will avoid taking on the things they didn't like, and you'll be stuck handling those after. Now that we know how the transactions work, let's discuss a huge deciding factor.

Tax implications for each method. If you're like most business owners, one of the first questions you're gonna [00:11:00] ask is, how much do I get to keep after taxes? The structure of your sale shares versus assets can have a dramatic impact on this answer. Canada's tax system treats these two transactions very differently, so let's break it down.

When selling shares of your corporation, you're triggering a capital gain or loss for you personally as a shareholder. The capital gain is basically the sale price minus your cost. That is what you originally paid for those shares, which many owner founders may find to be very, very low. The good news is capital gains are taxed very favorably in Canada, with only half of the gain being included as in taxable income.

In other words, half the gain will be tax free by default. In other words, half the gain is tax free. If you're in the highest marginal tax bracket, that means you'll pay somewhere around 25% because half the gain is tax free and the other half is taxed at the highest marginal tax rate, which is roughly about 50% in most provinces.

If it was fully taxable, you would pay 50% on the entire amount. So already selling shares has a huge tax advantage. Profit gets capital gains treatment rather than being taxed as regular income, but it gets better, especially for small [00:12:00] business owners. You may qualify for the lifetime capital Gains Exemption or LCGE on a qualified small Business corporation, A-Q-S-B-C when you sell the shares, this is a special exemption that it can allow you to pay up to $0 in tax on a large chunk of your capital gain when you sell the shares of a qualifying small business.

As of 2025, the exemption totals 1.25 million per shareholder and is indexed annually to inflation. Keep in mind, the lifetime capital gains exemption is a one or few times in year lifetime limit. It's cumulative meaning that you can use up the room on the sale, and it reduces all the future room in future sales.

But for many small business owners, this exemption means that the sale of their business could end up being entirely tax free if planned correctly. If you're wondering what it takes to qualify for this exemption, I already did another video that dove deep into this topic called is your share structure making your Business share sale taxable?

I'll link that in notes. Now let's look at the tax outcome first. Share sale. Assuming you qualify for lifetime capital gains treatment and possibly the lifetime capital gains [00:13:00] exemption, selling shares tend to be very tax efficient to the seller. Let's put some numbers to this to illustrate. Suppose you sell your shares for $1 million and your cost base is negligible.

That's to say that you started the company from scratch. If these shares qualify for lifetime capital gains exemption, you could potentially apply the LCGE and have the entirety of the million dollars be tax free. You literally get to keep the million minus any advisory fees or legal fees. If the share sales above the exemption price, let's say 1.5 million, you basically get to keep 1.25 tax free and only pay tax on the $250,000 above that threshold.

If you don't qualify for the LCGE, because not every business does, you still benefit from capital gains treatment. So for example, when you sold for a million dollars, only half a million dollars would be taxable. If you're at a 50% marginal tax rate, that would be a tax bill of $250,000 leaving you with $750,000 net.

Which is still a lot better than it could be in a different scenario we're gonna talk about shortly. Another perk, tax simplicity. In a share sale, the company isn't selling one thing or [00:14:00] anything for that matter. It's you, the shareholder selling shares. That means the company doesn't pay any tax on the transaction.

The money goes from the buyer directly to your pocket. The company's tax situation internally doesn't have an immediate impact at all on what the buyer is paying for. As the seller, you're mainly concerned about your personal capital gains tax. One more Canadian tax bonus in a pure share sale. There's generally no GST or HST on the sale of shares.

And for example, if your company owned real estate or other things that would've been subject to EHST or land transfer tax or other different transaction fees, they wouldn't apply because you're selling the shares. So that can save you a lot of additional tax. To sum up the seller's tax situation on a share sale.

It is one level of taxation at a favorable capital gains rate, often further reduced or eliminated through the lifetime capital gains exemption for every small business owner who owns shares, no taxes paid by the company on the share sale, and yet to skip a lot of the extra stuff like GST slash HST or land transfer tax.

In many cases, it's no one of the sellers [00:15:00] strongly prefer share sales from a tax planning view. It usually means more in their pocket after CRA takes their cut. Now as for an asset sale, this is where things can get a little bit more involved tax wise, because remember, in an asset sale, your company is selling assets, not you selling shares.

Personally, that introduces a two step tax process, one at the corporate level and the other one at the personal level, which can be a big complicated and can result in some tax implications compared to what happens with a share sale. So. How does this work? Step one tax at the corporate level inside the company.

When your company sells assets, it will realize its own capital gains or losses on those assets. Different types of assets have different types of tax treatment. For example, inventory. If you sell your inventory, like the goods that you have for sale for more than their book value, the profit is taxed as business income to the corporation, which is fully taxable at normal corporate tax rates.

As for depreciable assets, equipment, and MAC machinery in the company, those are assets that had capital cost allowance, deductions, [00:16:00] or depreciation. While you own them, when you sell them, two things can happen. If you sell for more than the assets un depreciated value, you may have to recapture. Some of the tax recapture is basically clawing back to depreciation you claimed in prior years, and it becomes fully taxable at corporate tax rates.

If you sell for more than the original cost. Any amount above the original cost is a capital gain and therefore 50% taxable to corporation sales for less than the un depreciated value may result in a tax deduction, but commonly sales of business equipment can trigger some recapture, which is totally taxable within the corporation and may trigger some capital gains.

As for real estate in buildings, similar to equipment, you could have recapture, which is fully taxable and capital gains, which is half taxable. One additional tax Selling real property could mean land transfer tax to the buyer on closing. It's not the seller's tax, but it will factor into the negotiations and could result in a lower price.

As for goodwill and other intangibles, goodwill is the extra value of your business beyond the tangible assets, essentially the value of your brand and your customer [00:17:00] relationships. In an asset sale, if you're selling a business is going concerned, often a chunk of the price will be allocated to goodwill for tax purposes, goodwill will be taxed as a capital asset and therefore subject to capital gains rates.

If your company sells goodwill, any proceeds above the original cost of goodwill will result in a capital gain which is only half taxable, and any portion that represents a previously deducted amount or old capital accumulation deduction could result in recapture and be fully taxable to the business.

In many small business, the original goodwill cost is zero because you typically didn't purchase your brand or your goodwill. So therefore it will be subject to capital gains in general. So after an asset sale, your corporation likely has to pay corporate tax on any gains or recapture depreciation from the sale of those assets.

The exact tax, it can vary if you qualify for a small business tax rate on active income. For things like inventory, you may pay as little as 12%. In Ontario, for example, on the first half a million dollars of income and 26.5% thereafter, capital gains is effectively taxed at [00:18:00] 25% 'cause it's only half taxable.

This is an oversimplification, and the takeaway is that the company will lose some funds to tax as a process of the sale.

But fear not smart Tax planning can often soften the blow a bit between using the capital dividend account and under refundable dividend tax mechanisms within the corporation. By the time you end up paying out these assets to yourself, you'll basically pay the same taxes if you had earned that money personally and paid personal marginal tax rates.

However, note the LCG does not apply here. That's only on the sale of shares by individuals. The company does not get a lifetime capital gains exemption on the sale of assets. So therefore, the LCGE is basically forfeited if you go the asset sale route, which for many owners can be a big strike against an asset sale, especially if you could have had a lot more money tax sheltered by the LCGE.

Also, an asset sale may attract that GST and HST on some of the assets, often when selling an entire business. Buyers and sellers can elect to treat it as if [00:19:00] sale is an ongoing concern, but careful steps are required in order to ensure compliance with GST and HST. This does not apply in share sales, so as we can see.

Asset sales have a bit more tax complexity and administration and higher tax bills. So to summarize the seller's tax perspective, in an asset sale, a corporation will pay tax on the sale of assets, including the full recapture of depreciation, inventory gains, and half of capital gains, which applies to goodwill and et cetera.

Then you have to pay personal tax on withdrawing the after tax proceeds as a dividend. Again, don't worry because you can basically apply certain credits to reduce the bills if you had earned that money personally. You cannot use the lifetime capital gains exemption in an asset sale. In fact, it's commonly understood for the same business.

An asset sale will usually command a higher price than a share sale because we have to account for all the taxes and reduced net payout to the shareholders. Conversely, a borrow pay a bit less on a share sale. That's because they're taking on more risk and the seller gets tax benefits. This price [00:20:00] adjustment is part of the negotiation process once tax implications are considered on both sides.

So here's a quick tax comparison recap. Share sales seller gets a capital gain, which is only half taxable and possibly tax sheltered by the lifetime capital gains exemption, up to $1.25 million tax free per shareholder. Only personal taxes apply, not corporate taxes, and often this can be minimized when planned.

For correctly, I. On asset sales, the company pays the corporate tax rate on the gains, and then the seller pays personal tax rates on dividends. No lifetime capital gains exemption applies. Generally, the result is more tax than on a share sale and requires careful planning to make sure that excess taxes aren't paid.

Now, taxes are a big part of the deal, but they aren't the only factor. Let's explore the liability and legal implications of essentially who's responsible for what after the sale. Aside from money and taxes, the other major difference between a share sale and asset sale is who assumes the liability for past and future obligations of the business.

This can include everything from loans to a supplier, debts, [00:21:00] lawsuits, warranty claims, or environmental liabilities. It's a crucial aspect because it affects your peace of mind after the sale and also the buyer's risk. When you sell your shares, the buyer's stepping into the ownership of the corporation, which means they inherit all the corporation's, assets, liabilities, and existing and possible future liabilities from past transactions.

The company's the same legal person as it was before, just with a new owner. So if the company had, say, a pending lawsuit or debts to Revenue Canada, it still has those, and now the buyer who owns the company will have to deal with it. In other words, the buyer gets the good, the bad, and the ugly. For you as a seller, it's generally positive.

You get to walk away from those liabilities. After a share sale, you no longer are the owner, so you no longer have to worry about being on the hook personally for these things that the company owns or any illegal claims against it. Assuming you haven't given any personal guarantees that remain in force after the sale, they are, you want to address those as part of the negotiation.

From a buyer's perspective, this liability inherit [00:22:00] is a big downside to share purchases. That's why buyers through thorough due diligence and often negotiate holdbacks and indemnity provisions as part of the contract, they may say, okay, if any pre-closing tax liabilities arise in the next two years, the seller will have to reimburse me X dollars.

Sometimes part of the purchase price is held back in escrow. For a period to cover such things as a seller, you should be prepared to basically negotiate these different possibilities. In short, a share sale is a clean exit for the seller. In terms of day-to-day obligations. You hand over the keys and the history to the buyer, but be prepared for the buyer to know that and not absorb all the risks.

Many will negotiate a lower price in order to basically absolve themselves of that risk in an asset sale. The default assumption is the buyer is only buying specific assets and usually not assuming any other liabilities except for those explicitly agreed upon. The buyer's new company starts fresh with those assets.

This means that any liability isn't explicitly transferred with your original company, which you still hold onto as the seller, at least [00:23:00] until you wind up the business. So imagine all the obligations of risks associated with your business, loans, lawsuits, accounts payable, employee severance tax debts. If they're not part of the asset purchase and sale agreement, they remain with your corporation.

After the sale, you still own the corporation, so you would directly still have to deal with those. You might use some sale proceeds to pay off debts, settle lawsuits, or pay out employees. Buyers love this aspect of asset sales because they can largely avoid inheriting past problems. They typically say, I'm only buying the good stuff.

I'm leaving behind the bad stuff. Of course, a buyer may choose to assume certain liabilities as part of the deal. For example, they may take over responsibility of fulfilling the remaining terms for a com customer contract. That is technically a liability and obligation. Mm-hmm. Or they may assume warranties for products that were sold in the past in order to maintain goodwill with customers.

So the buyer might agree to handle future warranty claims even for past sales. But these are negotiated and built into the price. If a buyer agrees to assume a [00:24:00] liability, then the purchase agreement will spell it out clearly free to sell. Or an asset sale means that you could still have homework to do after closing, like paying off whatever's left over.

Often, particularly, is a condition of sale. They may insist that certain liabilities be cleared by closing. So for instance, a buyer may insist that the business be delivered free and clear of bank debts. So you must pay off all those loans. With the proceeds at closing, or the buyer may want you to deal with the termination of employees that they don't wanna hire.

From a seller's peace of mind perspective, a share sale is nicer because you hand off everything. With an asset sale, you have to assume that there's gonna be a period of responsibility to wrap up whatever obligations you still have. However, once that is done, eventually you liquidate the company and you can fully move on.

During the interim, though, you may have to be dealing with other professional advisors in order to make sure you're free and clear of any obligations. It's worth noting that because of the above differences, legal and accounting fees can differ. Asset sales typically involve more documentation, asset transfer documents, assignments, possibly multiple, closing on different asset types, [00:25:00] and thus can rack up higher legal and professional fees.

I. Share. Sales are usually one agreement and one set of closing documents. Often simpler though, due diligence and representations can be extensive is often a transaction That's just one transaction versus many. If you have a lot of contracts and assets, an asset sale can be a logistical project. This is another reason why if buyers insist on asset deals, the seller might expect a higher price, not just for taxes, but for the hassle.

So to summarize, share sales buyers get the whole package, all liabilities and risk go with the company. Sellers can generally walk away from the business obligations post-sale, except for any promises that they made on the contract, such as warranties or indemnities that could boomerang at some point in the future.

If anything was misrepresented. Employees stay with the company. There's no severance liabilities to the seller. The buyer bears the risk of unknown issues, and hence scrutinizes everything beforehand. As for asset sales, the buyer will cherry pick assets and usually avoid any unwanted liabilities. The seller's company keeps any leftover liabilities and must [00:26:00] settle these debts in potential lawsuits, severance, whatever else it might be.

The seller may have ongoing tasks after closing to wind down the company. Employees may need to be terminated as part of the sale and possibly rehired by the buyer. The contracts need to be assigned to the buyer. Adding complexity to the sale buyers are protected for the most part in the presale issues, and the seller remains responsible for the past.

Having covered the process taxes and liabilities, let's talk briefly about how to approach a decision and other considerations. So which is better? A share sale or an asset sale? The usual unsatisfying answer, to be honest, is it depends. It depends on your priorities, tax savings versus retaining certain assets and et cetera.

The buyer's preference, the nature of your business, and sometimes factors like your timeline or future plans can impact this. But here are some final considerations and tips. As a rule of thumb, most sellers lean toward share sales, and most buyers lean toward asset sales. This inherent tension leads to negotiations.

You might start off saying, [00:27:00] I wanna sell shares and get the buyer offering. I'll buy only these assets. Then you need to negotiate a price and bridge the term on the gap to determine which methodology you're both gonna move forward with. Now you might be asking yourself what you should do to prepare in advance.

Well, here are a few suggestions, making sure you qualify for the lifetime capital gains exemption. If you think you will eventually sell shares, ensure your corporation qualifies as A-Q-S-B-C. When the time comes, you need to plan in advance for this. Tidy up your liabilities, especially if you want, do a share sale.

If you wanna sell shares, make sure your business is as clean as possible to reduce the risk to the buyer. Consider your post-sale plans. If for some reason you want to keep your corporate entity for some asset or other venture, then you might lean towards an asset sale so you can retain whatever it is you want.

Discuss your plans early with your advisors. Talk to your financial planner, accountant, and lawyer well in advance of the sale. If you anticipate selling the next few years, planning can significantly improve the net impact or your net outcome. Know your buyer's [00:28:00] market if you're selling to a third party.

Research the buyers in your industry and see which ones you typically would prefer. If you have partners, make sure they're on board. If they aren't, it could lead to a lot of interpersonal conflict and may even end up in a legal battle. Exiting your business is a big deal, so be ready when the time comes.

Thank you for tuning in, wishing you a profitable and smooth business sale. Whenever the time is right and remember, I. The only thing better than building a successful business is selling it smartly so you can keep as much of your hard earned value as possible and maybe treat yourself to a well-deserved vacation or things you couldn't do before you did it.

I'm Jason Pereira and if you enjoyed this, please like and subscribe, or if you're listening on a podcast, please leave a review wherever you get your podcast. Till next time, take care.

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