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Q&A With Cortney: Stock Sale Versus Asset Sale

Q. I’ve heard about a few ways to go about buying a business. The two most common methods I’ve seen are stock sales and asset sales. What do those really mean, and is one better than the other?                                                          —Joe G., Lexington, South Carolina

A. An asset sale is the most popular type of sale performed by The Firm. This type of transaction allows a buyer to form a new corporation or limited liability company (LLC) that purchases the assets of the previous owner’s company. Both intellectual property and hard assets, such as customer lists, the business name, social media pages and websites, are included in this type of purchase.

A stock sale is a transaction where a buyer purchases the ownership interest in a company and all indemnification and obligations transfer from the previous owner to the new owner. Stock sales are less common than asset sales because legal, tax, and accounting issues can complicate these transactions.

It can be a challenge to decide which type of sale works best for you — but The Firm’s team of experts offers the information you need to make the best decision for you. Whether you’re a buyer or a seller, we offer guidance and support through even the toughest situations.

Cortney Sells, The Firm's president and founder, is an accomplished businesswoman and an expert in mergers and acquisitions. She leads a team of empowered professionals who share her passion for pairing owners of existing businesses with qualified individuals who continue the legacies of those businesses.

Do you have a question for Cortney? Send your questions related to buying a business, selling a business, or the fast-paced world of mergers and acquisitions to amyg@thefirmb2b.com.

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The Firm Business Brokerage is not a real estate brokerage and therefore the staff will not handle any aspect of the lease, sale or purchase of real estate.