Taxation of business entities.

Taxation Advice - Selling a Business, Share transfer v goodwill & trade asset?

• Hi, I have two similar offers on my business, however one is via a share transfer and the other is a 'trade asset and goodwill' method. what are the taxation implications of these two methods? Both for the business and ultimately, myself & my business partner. Thanks.

• Answer:

  if u sell shares, there will be capital gains (sales price less your cost of share subscription) to u and your partner. if u sell assets, there will be business or capital gains or losses, for example, from selling accounts receivable, inventory, and business equipments. For goodwill, there will likely be capital gain, if u started your business brand new and didnt buy it from someone. u need a valuation of shares and appraisal of asssets under either method, and from that, u will find out which method gives u the lesser taxable gain on the other hand, the buyer may wish to buy shares, as they may use the business losses of your business, if any. Buying assets only will not continue such losses.