Buy Sell Attorneys

When buying or selling a business, the transaction will generally be structured either as an acquisition (through an asset purchase or a stock purchase) or as a merger.

Asset Purchase: At least conceptually, the easiest structure for buying a business is to purchase the seller's assets, free and clear of any liabilities. The purchaser is not actually buying the business entity itself. Thus, an asset purchase is much like buying the seller's inventory and equipment without buying the store.

Often, a buyer may prefer an asset purchase agreement for one or more of the following reasons:

• The buyer has the ability to acquire assets only, without assuming any liabilities of the seller. More likely, the buyer will pick and choose which assets to acquire and which liabilities to assume. For instance, the acquisition of certain intellectual property ("IP") rights or lease rights may be central to the buyer's desire to purchase. Acquiring such "rights," however, often entails a willingness to assume certain corresponding liabilities. And, conversely, from the seller's perspective the seller can choose which assets to sell and which to keep. For instance, it is not unusual for the seller to retain cash, certain receivables and sometimes some select IP rights.