Illinois | Business Law
Legal Question
In buying an existing company, should I do an asset purchase or a stock purchase?
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Legal Answer
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Read More Answered By: Adam Tracy |
Thank you for your question. The answer largely depends on the type of business you are purchasing. Typically, an asset purchase is better, however. If you acquire a business by way of a stock purchase, you will also assume liabilities for prior claims/debts that the company is liable for. Alternately, with an asset purchase, you can gain effective operational control of a business and not assume liability for any existing claims/debts - in most instances, but not all. However, if the business has significant "goodwill" - that is, brand recognition, reputation, etc, a stock purchase would be ideal since that structure is the only way to essentially assume that intangible asset. Please let me know if you have any further questions. You can email me directly: at@tracyfirm.com
Thanks,
Adam Tracy |
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