Deal types
The same goal can be reached in very different ways. A promoter who wants cash and to stay involved has more options than a full sale. Each common deal type is described in plain language, with when it fits and what to watch for.
It depends on what you want: cash, control, growth capital or a partner. A full sale, a minority stake, an asset sale, a merger, a joint venture or a management buyout each trade those differently, and each has its own diligence and approval points.
Directory
Each entry says what the deal is, when it fits and the one thing to watch for. Structure, tax and approvals depend on your facts, so confirm them with your CA and lawyer.
The owner sells less than half of the company to an investor or strategic partner and keeps control. The investor usually asks for rights such as a board seat, information rights and a say on major decisions.
The owner sells a large share now and keeps a smaller stake, often staying on to run the business for an agreed period. Part of the price may depend on later results.
The shareholders sell their shares, and the company itself, with its contracts, licences, employees and history, passes to the buyer unchanged.
The people who already run the business buy it from the owner, usually with a mix of their own money, bank or investor funding and deferred payments to the seller.
The buyer acquires all the shares of the target, as when a Gujarat packaging maker buys a Maharashtra competitor outright. The price is often split between cash at closing and an earn-out.
The buyer picks specific assets, such as a plant, a brand or a product line, and leaves the selling company and its other liabilities behind.
Two companies combine into one, and shareholders of the merging company receive shares in the surviving one at an agreed swap ratio. In India this usually runs as a scheme of arrangement under the Companies Act, approved by the NCLT.
A whole business undertaking, such as a division with its staff, assets and contracts, is sold for one lump sum without a price on each asset. The Income Tax Act gives this its own tax treatment.
The company issues new shares to investors in return for capital, as when a Pune SaaS founder raises a Series A. Existing shareholders are diluted, and investors get rights set out in a term sheet and shareholder agreement.
A loan to a venture backed company, usually taken alongside or soon after an equity round, often with warrants that give the lender a small right to buy shares.
The company changes its mix of debt and equity, for example by refinancing loans, converting debt to equity or bringing in new capital to buy out some shareholders.
Two parties set up a new company together, each putting in capital, technology, customers or assets, and share control and profits under a joint venture agreement.
Two businesses agree to work together on distribution, supply or product without forming a new company or exchanging shares.
A brand owner lets independent operators run outlets under its name and system in return for fees and royalties, and grows without funding every outlet itself.
The owner of a brand, technology or process lets another business use it for a fee or royalty, while keeping ownership.
A company separates a division or product line into a standalone business, to sell it, bring in a partner for it or run it on its own.
Ownership and management pass from one generation to the next, as when a Surat textile family moves the founder's shares and roles to his children, sometimes alongside a family settlement or trust.
A business under financial strain sells assets or units to repay lenders, either by agreement with them or through a formal process under the Insolvency and Bankruptcy Code.
Side by side
The three questions owners ask first, answered in general terms. Your structure, tax and approvals depend on your facts.
These are general patterns. Confirm the structure for your deal with your CA and lawyer.
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