Mergers & Acquisitions

Resources: Glossary

Don’t be confused or intimidated by any terms or abbreviations in the M&A world. You’ll find answers here.

Internal Transfer

Definition

A sale of a business to an insider, such as a family member, an employee, or partner.

See Also

Buy-sell agreement, external transfer, ESOP

Example

The sale of a business to a competitor or someone not involved in the business is considered an external transfer. The sale of a business to a family member or employee is considered an internal transfer.

Tips

External transfers almost always result in a higher value than internal transfers. Owners often only consider an internal transfer if they feel a strong allegiance to employees, family members, or other insiders, or if the business cannot be sold to an outsider.

Related Resources

Business Exit Plan & Strategy Checklist | A Complete Guide

M&A Guide | Selling Your Business to Employees