How to Buy a Business's Shares & Assets | Small Business - Chron.com

How to Buy a Business's Shares & Assets | Small Business - Chron.com

by Bradley James Bryant, Demand Media

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Overview
There are two main ways to invest in a company: debt and equity. If you lend money to a company with the expectation of getting that money back, it is considered company debt. You can also purchase equity in a company by buying shares and assets. Ultimately, the majority shareholders own the assets. If you want to own the majority stake (and all the assets) in a company, you need to purchase 51 percent of all outstanding shares.
Making a financial plan image by Allen Stoner from Fotolia.com
Making a financial plan image by Allen Stoner from Fotolia.com
You need to buy a majority stake in a company for ownership of its assets.
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Step 1
Get the company's most recent balance sheet by requesting an annual report through the investor relations department or by downloading it from the company's website. You can also download the annual report from an investment research site, broker or financial adviser.
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Step 2
Go to the section in the report on stockholders' equity, which details the stock ownership of the company. If it doesn't, look up the information in the common stock section, in the notes to the financial statements. Determine the number of shares outstanding. This is the number of shares owned by investors. This line item is usually referred to as common stock outstanding.
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Step 3
Calculate the number of shares you must buy. You must purchase 51 percent of the shares outstanding to take a majority ownership stake in the company. For instance, if there are 200 shares outstanding in a company, you need to purchase 102 shares to claim majority ownership over assets.
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Step 4
Look up the current market price of the shares. Let's say the current market price is $1. Multiply the current market price by the number of shares you need to purchase. For example, 102 x 1 = 102, which means you must pay $102 to purchase majority ownership of the company.
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Step 5
Contact your broker and place an order to purchase shares at a certain price. Be sure your broker is familiar with making large stock orders for acquisition opportunities. Large block purchases can trigger an increase in demand, which can increase the market value (price) of the stock. If you don't have a broker, ask your bank if it has an investment banking unit. If not, ask if it can refer you to an investment banking contact. You can also contact investment banks in your city for help.

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About the Author
Working as a full-time freelance writer/editor for the past two years, Bradley James Bryant has over 1500 publications on eHow, LIVESTRONG.com and other sites. She has worked for JPMorganChase, SunTrust Investment Bank, Intel Corporation and Harvard University. Bryant has an Master of Business Administration with a concentration in finance from Florida A&M University.