Sale-of-a-BusinessIllinois Business Acquisitions

In Illinois, a sale of business will generally be structured either as a merger or acquisition.  Acquisitions are most often in the form of an asset purchase whereby the seller sells substantially all of the the business’s assets, generally free and clear of any liabilities.  Illinois business acquisitions can also be in the form of stock sales, where the seller sells the business’s or shareholders’ stock (or LLC members’ membership units), and the buyer then takes over the business, instead of just selling all of the business’s assets, inventory, intellectual property or merchandise.  A merger, or the “marriage” of two businesses, shares many characteristics of an asset purchase and a stock purchase (or membership unit purchase for LLCs), but at the end of the transaction the two businesses are combined as one.

In Illinois, a sale of business will generally be structured either as an acquisition or as a merger. Acquisitions are most often in the form of an asset purchase whereby the seller sells substantially all of the the business’s assets, generally free and clear of any liabilities.

Because a merger and acquisition, or sale of business, is the transfer of a business or its assets to an acquiring entity, the business transaction becomes inherently complex from a legal and financial perspective. In fact, a sale of business is more complex than many business owners imagine.  Take a standard type of transaction, a small private company that wants to sell its existing business to another business or individual.  Even this seemingly simple business transaction is fraught with complexity because the business and its assets, including its employees and executives, must be identified, and legal constraints on its transfer must be identified.  For instance, are contracts assignable?  Is the intellectual property, including trademarks, patents, and copyrights, being transferred to the acquiring business?  What are the employment implications of this transfer?  What are the tax and accounting issues?

For most private small business mergers and acquisitions, our Chicago business lawyers, Chicago intellectual property lawyers and team of financial professionals will effectively guide you and your business through the complexities of this type of sale of business.