Purchase price impact of asset sale vs LLC member equity

by a searcher

3 years ago

My deal may need to change structure from an asset deal to buying out the owners membership in the existing LLC.  I understand the legal and tax implications but struggling to find anything out there on how much to reduce the acquisition price to account for the change in structure. Is it just the calculated difference in taxes?  At present value?  Do I account for the owners ability to apply capital gains on their side?  Anyone have experience in comparing the two?

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9 comments

searcher from California State University, San Bernadino

Given that asset purchases get you out of legal liability for the company's entire history, both known and unknown, that sounds worth paying for at the right price.

2 years ago | like reply | 0 likes

searcher from IE Business School

You must take into account the risk involved in buying the shares instead of just buying the assets. The value of these contingencies should be the decrease in the price you propose to the owner. Have you already done your due diligence?

2 years ago | like reply | 0 likes

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