Selling a client bank versus selling the company
The two structures, what each one does to your tax position and your liabilities, and how to tell which one you are actually being offered.
Two different transactions
An asset sale buys the client relationships and the right to service them. A share sale buys the company, and everything in it. Most advice-firm transactions are asset sales with a novation, because the buyer does not want the history that comes attached to the company.
What an asset sale leaves with you
The company shell, its liabilities, its run-off professional indemnity cover, and the job of winding it up. That is not necessarily bad, but it needs planning before you sign rather than afterwards.
What a share sale changes
The buyer inherits the regulatory history, so due diligence is deeper and slower, and the price usually reflects that. Where the company holds something worth having — permissions, a long-standing brand, staff contracts — it can still be the right structure.
Novation is the part clients notice
Whichever structure is used, the clients have to be moved onto the new firm's terms. Done properly it is a letter, a conversation and a named adviser. Done badly it is the moment a book starts leaking.
Get the tax advice before the heads of terms
The structure drives the tax outcome, and by the time heads are signed the room to change it has usually gone. This is not tax advice and we are not your accountant; take that advice early.
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