Selling a company rather than a business means the legal entity itself changes hands, with its contracts, its licenses, its history and its liabilities intact. That single difference changes the diligence, the tax and the paperwork, and it is the reason buyers and sellers so often start the negotiation wanting different structures.
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Shares or assets, and why buyers prefer assets
In an asset sale the buyer takes named assets and leaves the entity, and most historic liabilities, behind. In a share or stock sale the buyer takes the whole entity, warts included. Buyers generally prefer assets for that reason and for the tax basis they get; sellers often prefer a share sale because it is cleaner and can be taxed more favourably. The gap between the two positions is usually settled with price rather than principle.
What has to be clean before you start
The share register and any option grants, because a buyer will not close on an entity whose ownership is uncertain. The minute book. Any loans between the company and its owners, which need to be settled or documented. Contracts with change of control clauses, which need consents. Each of these takes weeks to fix and days to discover, which is the wrong way round if you find them during exclusivity.
Running the sale
An information document goes to buyers under a non disclosure agreement, offers come back as letters of intent, and one is chosen and given exclusivity. Diligence then verifies the file, and a share purchase agreement is negotiated in parallel. Where an entity is being bought, diligence is wider than in an asset deal because everything the company ever did stays with it.
Getting paid
Expect part of the consideration deferred through escrow, a seller note or an earnout, and expect the buyer to want you available afterwards. Where the company has more than one shareholder, the shareholders agreement decides whether a majority can force the rest to sell, and finding out that it cannot at the point a buyer wants everything is an expensive discovery.
Other questions people ask
Is selling a company different from selling a business?
In law, yes: one transfers the entity and the other transfers assets out of it. In practice the marketing and the buyer conversations look the same, and the structure is decided in the letter of intent.
Can I sell part of my company?
Yes, though a minority stake in a private company is a much harder thing to sell than the whole. Buyers of minorities are usually existing shareholders, management or specialist investors, and the discount for lack of control is real.
Do all my shareholders have to agree?
Read the shareholders agreement and the articles. Drag along rights let a defined majority compel the rest, and without them a small holder can hold up a sale. This is worth checking before you spend money on a process.
Who drafts the purchase agreement?
Conventionally the buyer's lawyer drafts and the seller's lawyer marks it up. That is not a disadvantage as long as your lawyer has done private company sales before; it mostly decides who spends more on drafting time.