Chicago, IL asked in Business Formation for Illinois

Q: I am buying a pre-existing business - do I need to form my own company to do that?

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1 Lawyer Answer
Mazyar M. Hedayat
Mazyar M. Hedayat
  • Romeoville, IL
  • Licensed in Illinois

A: There are 2 primary ways to buy an existing business:

(a) Stock Purchase

(b) Asset Purchase

These are very different ways of buying. In a Stock Purchase you step into the shoes of the existing business, including any negative history or events. In an Asset Purchase you are buying the elements of the business but not the history of the business. In short, an Asset Purchase is safer, but may exclude certain valuable parts of the business.

In any case, you do not need to form a new business entity in order to accomplish your goal, although it may well be advisable to form one. To learn more, please consult with a knowledgeable Attorney in your area.

I hope this information has been helpful. Best of luck.

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