There are two primary methods for buying or selling a business: the share transaction and the asset transaction. Typically, a purchaser prefers an asset transaction, while a vendor favors a share transaction, though this preference may vary depending on the nature of the business.

1. Share Transaction (Purchase or Sale)
   A share purchase typically involves acquiring 100 percent of the shares of a company, effectively transferring all of the company’s assets and liabilities to the purchaser. This type of transaction is generally less complex than an asset transaction, requiring fewer documentation.

Vendors often favor this method due to potential personal income tax benefits.

2. Asset Transaction (Purchase or Sale)
   An asset transaction involves the purchase or sale of specific assets of a company, such as equipment, inventory, real property, contracts, or lease agreements. This method is more complex than a share transaction as documentation is required for each asset being transferred.

Purchasers typically prefer asset transactions because they allow greater selectivity in choosing which assets to acquire. Additionally, asset transactions tend to involve less liability risk, as the purchaser can avoid inheriting potential liabilities associated with the company’s existing operations. The purchaser may also choose to use the purchased assets to form a new company or corporation, minimizing the risk of unforeseen liabilities.