When It’s Time to Sell. . .

Tropper—There are typically two types of structures: a stock sale and an asset sale. Sellers generally prefer stock sales as the corporation (including its entire history) is actually sold, severely limiting any potential liability for the seller. For this reason, buyers tend to prefer asset sales, where only the assets of the company are transferred, but the corporation remains with the seller. However, there are a great many ways under each structure to address potential future liabilities, and these often can be points of contentious negotiation, depending on the particulars of the buyer and seller and their businesses. Generally, a deal should be structured to be fair to both buyer and seller, with liability dealt with openly and as part of the consideration of any deal.