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Weighing the benefits between an asset or stock purchase? Checkout this article we wrote to learn more about the implications of each. https://lnkd.in/gxtSpPBp

M&A Pricing Mechanisms: Locked Box vs. Completion Accounts In M&A transactions, two key approaches determine the final purchase price: 1. Locked Box Mechanism - Fixed price based on recent audited financials - Economic risk transfers to buyer from "locked box date" - No post-completion adjustments - Seller indemnifies against value leakage - Pros: Straightforward, faster, price certainty 2. Completion Accounts - Preliminary price estimate, adjusted post-completion - Based on actual financials at closing - Requires preparation of completion accounts - Pros: Allows for price adjustments based on performance Key Considerations: - Locked box often preferred by sellers for clean exits - Completion accounts suit volatile businesses or complex carve-outs - Choice depends on transaction specifics and market conditions

#TaxTipTuesday If your business is going through M&A, carefully evaluate the structure of the transaction—whether it's an asset purchase or a stock purchase. In an asset purchase, the buyer can often step up the basis of the acquired assets, which could provide depreciation benefits and tax savings. Meanwhile, sellers might face higher taxes on gains, especially if they are selling assets directly rather than stock. In a stock purchase, the tax treatment can vary, and there may be fewer opportunities for the buyer to take advantage of deductions. Consulting with a tax advisor like CJBS before finalizing the structure can help you optimize tax outcomes for both parties involved in the merger or acquisition.

Negotiating a purchase price adjustment? Don’t fall into these common traps. Our insights reveal the top pitfalls to avoid. #MergersAndAcquisitions #ShareholderRepresentative

Share buybacks are making a comeback and this is despite higher interest rates and a recent 1% excise tax. In this week’s D&O Notebook, Lenin E. Lopez provides insights into recent share buyback-related SEC enforcement actions and offers strategies to mitigate the risk of becoming the subject of a regulatory investigation. #wsinsights #DOnotebook #directorsandofficers #buyback

Our ABN Orange Man is here with a quick tax saving tip for your Year End planning! 💡 Review your Stock on Hand If you operate a business that deals in stock or inventory, then review your stock valuation and write down or write off any stock that is slow moving, damaged or obsolete. Complete a stock take and remember that stock can be valued at the lower of cost or net realizable value. Small businesses can avoid doing a formal stock take if the balance of their stock has not changed by more than $5,000 in the last year.

What is Buyback? A buyback is when a company repurchases its own shares from investors. This can be done in two ways: 1. Tender Offer: Investors sell shares at a premium price. 2. Open Market: Company buys shares at market price. Tax Update (2024 Union Budget) Earlier, companies paid 20% tax on buybacks. Now: - Companies are exempt from buyback tax. - Shareholders will pay tax on buyback proceeds as dividend income. Conclusion: Companies can buy back their shares from investors through tender offers or open market purchases. As per the 2024 budget, shareholders will now pay tax on buyback proceeds, not the company.

Buying or selling a company? The purchase price adjustment mechanism which you are going to choose - locked box accounts vs completion accounts - is crucial. 1️⃣ Locked Box Accounts: - fixed price based on historical accounts - buyer assumes risk/reward after locked box date - it requires thorough due diligence - seller is restricted in operating business pre-completion 2️⃣ Completion Accounts: - price adjusted post-completion based on actual metrics - it provides accurate picture at complation - lengthier process to agree accounts - potential delays/disputes #mergersandacquisitions

A new levy on Canadian companies that repurchase stock from their shareholders is expected to come into force on Jan. 1. Here’s what you need to know about the proposed share buyback tax, with insights from a tax professional.

Sales of business assets may seem like a straightforward process, until you realize that purchase price allocations can be broken down into as many as seven asset classes. Why is it so important to find the fair market value of each class? Julie Bradlow and Shara Pipitone share their knowledge of this process in our latest DE Insight. #purchasepriceallocation #businesssale #assetsale #corporatelaw #realestatelaw #taxattorney #irs #DEinsights https://lnkd.in/edbNUGVa