When the sale of a business is structured as an asset purchase, the seller holds on to his or her stock, and only transfers specified assets and liabilities to the buyer.  Anything not specified in the purchase agreement remains in the seller’s ownership.  Buyers must create a new business entity for the transaction, because the seller retains a portion of the existing business.  These reasons make asset purchases inherently more complicated than stock purchases.  Nevertheless, asset purchases are generally the preferred structure of transaction for buyers.  Buyers know precisely what they are getting with an asset purchase, and they can realize tax benefits from this structure as well.  Because buyers and sellers many times disagree on how to structure the transaction, the manner in which the transaction is structured can be used as a bartering tool for other terms of the purchase agreement.   

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