Whether you’re preparing to sell your business or looking to acquire one, the process is complex—and often emotional. With the right knowledge, you can avoid legal risks, reduce taxes, and get the best value. Here’s a practical, step-by-step guide to navigating a business sale or purchase.

1. Know your why

Before you sell or buy, clarify your motivation. Are you selling to retire, pivot, or grow another venture? Are you buying for expansion, market access, or synergy? This shapes your entire strategy.

2. Prepare financial documentation

For sellers:

• Organize at least 2–3 years of financial statements
• Clean up accounting and eliminate personal expenses
• Identify recurring revenue streams and growth potential

For buyers:

• Analyze historical financials
• Assess liabilities, contracts, and client dependencies
• Understand seasonal trends or potential red flags

Useful tools: Merit Aktiva for bookkeeping, and CostPocket for expense tracking.

3. Understand tax and legal implications

Business transfers can have significant tax consequences. For example:

• Capital gains tax (Estonia applies this only on distributions, but international buyers/sellers may be taxed differently)
• VAT on asset sales vs. share deals
• Transfer pricing and cross-border implications

Useful resource: EMTA – Business Transfers & Taxation

4. Choose the right structure: ssset vs. share Deal

• Asset Deal: Buyer acquires only selected assets (e.g., equipment, customer lists). Lower risk but more complexity.
• Share Deal: Buyer takes over the legal entity, including liabilities. Simpler but riskier without proper due diligence.

Each option affects taxes, liabilities, and legal responsibilities.

5. Conduct Due Diligence (DD)

Buyers should always:

• Verify ownership of assets and intellectual property
• Review contracts, leases, and licenses
• Check for unpaid taxes or litigation

Sellers should:

• Get a pre-sale DD to fix issues in advance
• Disclose honestly to avoid post-deal disputes

How stmills.com Can Help

Buying or selling a business requires more than just a handshake. At Stmills.com, we guide you through:

• Legal structure planning (asset vs. share deal)
• Tax impact analysis and optimization
• Financial due diligence support
• Document preparation and negotiations

We simplify complexity and help you close deals with confidence.

Useful Links and Resources:

• EMTA – Business Transfers
• Estonian E-Business Register
• CostPocket – Expense Documentation Tool
• Merit Aktiva – Financial Reporting

Whether you’re exiting or entering, understanding the process of buying or selling a business is key to a successful transition—and Stmills.com is here to help you navigate every step of the journey.