Definition
Asset vs Share Sale
Whether you are buying the business's assets or its legal entity (shares).
Definition
In an asset sale, the buyer purchases specific assets (equipment, IP, customer contracts, goodwill) and the seller's company structure stays with the seller. In a share sale, the buyer purchases the shares in the company itself — taking on all its history, contracts, liabilities, and obligations. Asset sales are generally preferred by buyers (cleaner, lower risk); share sales are often preferred by sellers (potential tax advantages).
Worked Example
A buyer purchases a cleaning business via asset sale: they acquire the customer contracts, equipment, and trading name. The original company entity — and any historical legal liabilities — remains with the seller.
Related Terms
Ready to put this into practice?
Use the free BAS calculator to score any acquisition.