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Decisions, Decisions, Decisions: Asset Sale vs Share Sale

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If you are in the process of selling your business, then the type of acquisition is an important decision to make.

Asset Sale

This involves the buyer buying sufficient assets that make up the business. This can come in the form of land, stock, IP-rights, goodwill, etc. Here, all assets and on-going liabilities will remain with the seller, unless the agreement states otherwise.

Share Sale

This is where the buyer will acquire the shares of the business from the shareholders. This differs to the above whereby the seller is the owner of the asset (usually the business itself rather than an individual shareholder). To contrast to the above, the buyer would automatically receive all assets and liabilities.   

Although both types will achieve the same commercial objective, your business being sold, both have legal consequences that drastically differ.

For more information and assistance on the sale of your business, please contact our Commercial Director, Nick Stockley.