The Differences Between an Asset and a Stock Purchase?

As a Hartford County, Connecticut Business Lawyer I get asked, what are the differences between a stock purchase and an asset purchase transaction? In a stock purchase transaction, you’re identifying the specific assets or parts of a business that you’re acquiring from another firm. These can include just the goodwill value of a company, its intellectual property, its accounts receivable, and/or its inventory. It’s also useful to use an asset purchase transaction when you want to avoid assuming certain liabilities of the seller. In essence it allows you to start with the assets of a seller with a clean slate.

A stock purchase transaction is very useful where some but not all of the owners of the seller are willing to sell. There are also certain tax advantages in a stock purchase transaction over an asset’s purchase transaction.

About the author

Lindh Foster, LLC

Connecticut Business Lawyer & Debtors Rights Attorney, Eric Foster of Lindh Foster, LLC, has been practicing law for over 25 years in Connecticut, New York and Hong Kong, China. As a Connecticut Business Lawyer, Eric Foster’s legal practice currently centers around representing small businesses and entrepreneurs, in selecting their business structure, forming their businesses, and managing their business transactions. As a former attorney at the Federal Reserve Bank of New York where he focused on the regulation of banks’ lending activities, Attorney Foster is also a passionate consumer advocate and a member of the National Association of Consumer Advocates (NACA). As a Debtor Rights Attorney, Attorney Foster enjoys advocating for and representing consumer debtors in connection with credit card, student loan and other debts they allegedly owe creditors and debt collectors.

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