Selling your small business can be an equally exciting and daunting task to undertake. There are a variety of legal complexities in addition to various tax and practical considerations. Today’s post highlights one of those legal complexities: whether to structure the sale as a stock sale or asset sale. We’ll explore some of the key features and distinctions between the two types of sales.
Selling Your Business Through an Asset Sale
In an asset sale, the purchaser is not only buying the assets but also the liabilities of the business. The seller will retain possession of the legal entity, e.g. Joe’s Hardware LLC, and the buyer purchases the individual assets of the company, including equipment, inventory, fixtures, licenses, goodwill, trade names, etc….