Buying a Business: The "Asset Only" Approach When you buy a business, you generally have two paths: buying the entity itself (stock purchase) or buying only its "stuff" (asset purchase). For most independent buyers, an is the cleaner, safer, and more tax-efficient route. Here is why it works and what to watch out for. 1. You Get the "Cherry-Picks"
The biggest perk of an asset purchase is protection. When you buy a company’s stock, you inherit its history—including potential lawsuits, unpaid taxes, or hidden debts. When you buy assets, you are generally starting a fresh legal entity. You get the tools to make money without the "skeletons in the closet" from the previous owner's management. 3. Big Tax Advantages (Step-Up in Basis) buying a business assets only
In an asset sale, you choose exactly what you want. This typically includes: Buying a Business: The "Asset Only" Approach When
Because you aren't buying the legal corporation (the "shell"), you can leave behind things you don’t want, like old machinery or unprofitable contracts. 2. The Shield Against "Ghost" Liabilities When you buy assets, you are generally starting
Equipment, inventory, furniture, and real estate.
You aren’t technically their boss until you offer them a new contract under your new entity.