Los Angeles Asset & Stock Purchase Attorney
Drafting and Preparing Legal Documents
Clients are often confused between the difference of a stock and asset purchase agreement. It is therefore important to consult with experienced corporate attorneys who can explain the difference between the two, and who can advise the best fit for your companies needs. Our firm can advise and assist:
• Gathering the required legal and financial documentation;
• Prepare and review all agreements prior to the sale and/or purchase;
• Ensuring that if your your company is buying assets that it receives what it desires and expects;
• Confirm that any assets are free and clear from debts, liens and liabilities.
Difference between Asset & Stock Purchase Agreements
There is a significant difference between an asset purchase and a stock purchase, and each comes with unique benefits and drawbacks.
In a stock purchase, the buyer purchases stock in a company that may have unknown or uncertain liabilities. Unless the company is publicly traded, it can be more difficult for a buyer to value the stock of a company it intends to purchase. Furthermore, the seller in a stock purchase can walk away without liability after the transaction is completed. In most cases, the vendor relationships, customer base, employees and property remains the same — all that changes is who owns the shares of stock. A stock purchase, however, may or may not involve assuming the company’s current debts and liabilities.
In an asset purchase, the buyer will only buy certain assets of the seller’s company. The seller will continue to own the assets (as well as its existing business) that were not included in the purchase agreement with the buyer. The transfer of ownership of certain assets may need to be confirmed with filings, such as titles to transfer real estate. In most cases, an asset purchase protects the buyer because the buyer will only assume liability for the assets included in the purchase agreement. The seller will still be liable for assets not sold.
To learn more about what our firm can do for you and your organization achieve your legal goals, we encourage you to call the Los Angeles Stock and Asset Purchase Attorneys at 818-986-0968 or contact us online today.