When business owners decide to sell, the first question is usually:
“How much is my business worth?”
But in many transactions, the bigger issue isn’t valuation.
It’s structure.
Specifically, whether the sale will be a share sale or an asset sale — and whether the seller truly understands what that choice means before the deal process begins.
A Share Sale Isn’t Just a Tax Strategy
Recently, I came across an excellent article in Bsale Magazine by Joanna Oakey, founder of Aspect Legal, reflecting on a transaction where a seller was advised to pursue a share sale largely for tax reasons.
On paper, the reasoning seemed sound.
A share sale can sometimes provide tax advantages compared to selling business assets.
But as the deal progressed, the seller began to realise that a share sale also comes with heavier obligations — especially during due diligence.
As Oakey explains:
“The lesson isn’t ‘never do a share sale under $1 million’… The lesson is… you need to have the second half of the conversation at the same time as the first.”
— Joanna Oakey, Aspect Legal, via Bsale Magazine
That “second half of the conversation” is often what gets missed.
What Sellers Often Don’t Expect in a Share Sale
Many sellers assume a share sale is simply a cleaner exit.
But share sales often involve:
- deeper due diligence into the company’s full history
- broader warranties and disclosures
- higher buyer sensitivity to past liabilities
- longer negotiation around risk allocation
In other words, the structure affects far more than tax.
It affects the entire experience of the sale.
Why Informed Decisions Matter More Than Speed
In business sales, decisions made early — especially around share sale vs asset sale — shape everything that follows.
Without clarity upfront, sellers can face:
- unexpected scrutiny during due diligence
- deal fatigue midway through the process
- misalignment with buyer expectations
- higher legal and advisory costs
- increased risk of the transaction falling over
A sale is not just about agreeing on price.
It’s about agreeing on responsibility, risk, and what gets transferred with the business.
Advice Is Not Enough — Understanding Is Key
Professional advisors are essential.
But even good advice can create problems if the business owner doesn’t fully understand the trade-offs.
For example:
- A share sale may deliver tax efficiency, but comes with wider liabilities
- An asset sale may feel simpler, but could trigger different tax outcomes
- A “clean exit” may still require ongoing warranties for years
The best transactions happen when decisions are not only recommended, but clearly understood.
The Broker’s Role: Helping Sellers See the Full Picture
As brokers, our job is not just connecting buyers and sellers.
It is also helping clients make informed decisions early, so the deal remains sustainable all the way to settlement.
Because the cost of an uninformed structural decision rarely appears at the start.
It usually shows up halfway through the transaction.
Final Thought
Before choosing a share sale, asset sale, or any deal structure, the most valuable question isn’t:
“What will I get for the business?”
It’s:
“Do I fully understand what I’m agreeing to — and what comes with it?”
Informed decisions are what separate smooth transactions from stressful ones.
Source: Joanna Oakey, Aspect Legal — Bsale Magazine
