Asset vs. Stock Purchase

We recommend that you consult with a qualified CPA and/or attorney to assist you in evaluating the relative merit of structuring a business transaction or a stock or asset sale. However, the following is a summary of the common advantages and disadvantages of the alternative transaction structures:

Asset Sale vs. Stock Sale

Advantages	Disadvantages
No legal liability for the corporation prior to the purchase No liabilities for employees Costs paid for the assets are depreciable “Clean” credit, reputation, workers comp, etc.	No established credit Rehire the employees Negotiate transfer of leases & contracts New licenses Operating Capital

Stock Sale vs. Asset Sale

Advantages	Disadvantages
Established credit Many times, no or minimal operating capital required Leases are in place Contracts are in place Employees are in place with worker’s compensation rate established Licenses are in place No public notification of the sale No sales tax on the FF&E No deposits required Corporation, tax & employment numbers & documentation in place	Legal liability for the corporation prior to the purchase Assets are normally fully depreciated Sometimes stock is a