What is an asset sale?

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Multiple Choice

What is an asset sale?

An asset sale means the buyer buys the individual assets and may assume selected liabilities of the business, rather than purchasing the company’s shares or transferring the business as a going concern. This allows the buyer to pick which assets and contracts to take on and to exclude others, with the seller remaining the legal entity for the rest. It differs from selling shares (where the buyer acquires the company itself and its overall liabilities by owning the shares), from simply issuing new debt (a financing move, not a transfer of assets), and from transferring ownership as a going concern (selling the business as a running operation). The description that fits best is the one where the buyer acquires the company’s individual assets and liabilities.

An asset sale means the buyer buys the individual assets and may assume selected liabilities of the business, rather than purchasing the company’s shares or transferring the business as a going concern. This allows the buyer to pick which assets and contracts to take on and to exclude others, with the seller remaining the legal entity for the rest. It differs from selling shares (where the buyer acquires the company itself and its overall liabilities by owning the shares), from simply issuing new debt (a financing move, not a transfer of assets), and from transferring ownership as a going concern (selling the business as a running operation). The description that fits best is the one where the buyer acquires the company’s individual assets and liabilities.

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