For the Seller
- Unfortunately, more often than not, only the business assets are sold, and usually not at the best price because they are used or old. Secondly, the seller in all likelihood is facing significant recaptured depreciation (fully taxable) on the sale of these assets.
- However, the living buyout arranges to sell the shares (not just auction the assets), utilize the Canadian capital gains exemption, and get that first $500,000 tax free for each shareholder!
- The living buyout ensures the best possible "going concern" value for the business. If you were going to buy a business that just lost its' principal would you proceed today or wait six months?
- The seller may also be able to fulfill a feeling of moral and ethical debt by passing the business on to the people that helped him build it.
For the Buyer
- It is possible and often quite workable, that the buyer has been able to purchase the firm when he/she had little funds to begin with.
- He/she gets what he's always been promised but never knew how.
Please see:
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