Asset Sale vs. Stock Sale: Tax Considerations, Advanced Drafting and Structuring Techniques for Tax Counsel

Recording of a 90-minute CLE/CPE webinar with Q&A


Conducted on Tuesday, June 27, 2017

Recorded event now available

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Program Materials

This webinar will provide practical guidance into the best practices for tax counsel advising clients buying or selling a business on the tax ramifications of structuring the transaction as an asset sale vs. a stock sale. Each structure has distinct advantages and disadvantages, and tax counsel must be able to advise clients as to which structure makes the most sense for the client’s particular circumstance, and then to draft the appropriate purchase and sale documents to reflect the client’s intent. The panel will go beyond the basics to offer useful tools in structuring a business sale transaction with optimal tax results.

Description

The purchase or sale of a business is often a long, drawn-out process, complicated by the different priorities of the buyer and seller. While as a general rule sellers tend to prefer a stock sale while buyers prefer an asset sale, there are circumstances where these general guidelines do not apply.

Tax counsel advising buyers or sellers must understand the tax ramifications of any planned transaction at the outset to structure the deal in the most tax-efficient way possible.

Factors such as the type of entity being sold and whether the target company is part of an affiliated group filing a consolidated tax return will impact the types of provisions necessary in the agreement. Also, certain elections may be available or advisable in the context of a stock sale, and complex analyses regarding purchase price allocation or transfer tax determinations might be necessary in the context of an asset sale.

Listen as our experienced panel provides a deep exploration into the negotiating and essential drafting techniques of the purchase and sale of a business from the perspective of both buyer and seller.

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Outline

  1. Seller’s considerations in negotiating the transaction
  2. Buyer’s considerations in negotiating the transaction
  3. Impact of the target company’s characteristics
  4. Impact of elections under IRC § 338, § 336(e) and Treas. Reg. 1.1502-36(d)
  5. International tax and state/local tax considerations
  6. Contractual protections

Benefits

The panel will discuss these and other critical issues:

  • What impact does entity type have on the buyer’s and seller’s perspective in a sale?
  • What are the circumstances in which an asset sale would benefit a seller?
  • Under what circumstances would a stock sale benefit a purchaser?
  • How to structure a 338(h)(10) compliant document
  • How to properly negotiate and draft tax indemnification provisions in a sale agreement
  • Best practices for negotiating and drafting purchase price allocation in the sale agreement

Faculty

Donnelly, Matthew
Matthew J. Donnelly, Esq.

Skadden Arps Slate Meagher & Flom

Mr. Donnelly advises public and private companies on a broad range of domestic and international U.S. federal income...  |  Read More

Schockett, Paul
Paul Schockett

Counsel
Skadden Arps Slate Meagher & Flom

Mr. Schockett advises public and private companies on a broad range of U.S. federal income tax matters, with...  |  Read More

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Strafford will process CLE credit for one person on each recording. All formats include program handouts. To find out which recorded format will provide the best CLE option, select your state:

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