One of the first legal decisions in any acquisition is whether to buy the business's assets or the company that owns them. In ecommerce, where value sits in platform accounts and brand assets, the answer has real practical consequences.
What is an asset purchase?
In an asset purchase, the buyer acquires selected assets (the store, brand, inventory, domains, content and customer data) and the seller keeps the company. Liabilities stay with the seller unless the buyer expressly takes them on.
Asset deals are the norm for smaller online businesses and are what most marketplace and broker templates assume.
What is a share or stock purchase?
In a share purchase (UK) or stock or membership interest purchase (US), the buyer acquires the company itself. Everything inside the company, including contracts, accounts, employees and historic liabilities, comes with it.
Liabilities: the biggest difference
With an asset purchase, historic problems such as unpaid sales tax, product claims or old disputes generally remain the seller's. With a share purchase they come with the company, so the buyer relies on due diligence, warranties, indemnities and escrow for protection.
Account and contract transfers
Asset deals require each asset to be transferred individually, and many contracts and accounts need third-party consent. A share purchase can keep accounts and contracts in place because the owner of record does not change, although change-of-control clauses may still apply. This is often why larger Amazon businesses are sold as entity deals.
Tax considerations
Tax treatment differs for buyer and seller in each structure and country. Buyers may prefer asset deals for tax reasons; sellers often prefer share deals. The structure should always be decided with qualified tax advice.
Which should you choose?
An asset purchase usually suits smaller deals, businesses with messy histories and buyers who want a clean start. A share purchase may suit larger businesses, businesses with valuable non-transferable contracts or accounts, and cases where the seller insists on it for tax reasons, provided the buyer completes deeper diligence and negotiates strong protections.
This guide is general information, not legal advice for your situation. Speak to us about your specific acquisition.