Most entrepreneurs rely on organic growth by default. Building a market footprint from scratch has its merits, but it's often a slow and speculative approach. The alternative is inorganic growth: partner with other companies that already have the clients, product lines, systems, talent, and other assets that you seek.

Mergers and acquisitions are two of the most common options for joining forces. So which is right for you?

Acquisitions can be done on a share or asset basis. The former typically involves the transfer of all assets and liabilities, while the latter is limited to specific resources and obligations (which may require third party consent, such as creditors for encumbered assets). Their tax implications can vary considerably. For example, securities transfer tax will be levied on the sale of shares, while the sale of assets may incur VAT.

Mergers are often assumed to involve two companies blending together into a new entity with shared equity, but there are actually a variety of possibilities. One of the merging entities can subsume the other (instead of both amalgamating into a third company), and the consideration for the deal needn't involve shares (cash is an obvious alternative).

One of the biggest advantages that mergers enjoy over acquisitions is the immediate and automatic transfer of many assets by operation of law (which cuts out a lot of painstaking admin). They can also benefit from  tax exemptions, subject to how consideration for the deal is structured. On the downside, they're typically "warts and all" transactions, so thorough due diligence is critical.

Ultimately, the choice of deal structure should be informed by what you're trying to achieve. If speed and simplicity are of essence, and you're certain the fit is right, then a merger will likely be preferable. On the other hand, if you're only interested in parts of a company instead of the whole, then an asset acquisition will probably make more sense.