Advantages and Disadvantages of Stock Sales for Buyers
Following are several advantages and disadvantages of stock sales for buyers:
- The business has established credit;
- Subject to the approval of the premises landlord, the lease is in place;
- Vendor contracts are in place;
- Employees are in place;
- Required licenses are in place; and
- No sales tax must be paid on furniture, fixtures, and equipment
- The buyer assumes corporate liabilities which may be unknown or undisclosed,
- The buyer assumes liability for any employee claims, and
- Most CPAs and attorneys do not recommend stock purchase to their clients who are buyers.
This is not intended to be legal advice. For legal advice, consult with an attorney with business sales experience. Please see: Advantages and Disadvantages of Asset Sales for Buyers.