When It’s Time to Sell. . .

Effective legal counsel is also required to address contractual issues such as appropriate representations and warranties for both parties, general and specific indemnification terms, and indemnification limits.

Apfelberg—The seller almost always wants a stock purchase structure for tax reasons and also because the buyer steps into his/her shoes, accepting responsibility for all liabilities as of the closing. For similar reasons, the buyer always wants an asset purchase, which affords them a step up in basis in the acquired assets and also a limit to the amount of liabilities being assumed and exposure to successor liability issues.