Advantages & Disadvantages of an Asset Sale versus a Stock Sale from a Buyers Perspective
Advantages
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.
Disadvantages
No established credit
Rehire the employees
Negotiate transfer of leases & contracts
New licenses
Operating Capital
Advantages & Disadvantages of a Stock Sale versus an Asset Sale from a Buyers Perspective
Advantages
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 comp 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
Disadvantages
Legal liability for the corporation prior to the purchase
Assets are normally fully depreciated
Sometimes stock is a hard sell to CPA's & lawyers