Compare asset purchase and stock purchase.
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29-09-2020 - |
Question
Compare asset purchase and stock purchase.
The major differences between asset purchase and stock purchase are as follows −
Asset Purchase | Stock Purchase |
---|---|
Transfer of ownership is not possible. | Transfer of ownership is available. |
Can claim tax benefits. | Can’t claim tax benefits. |
Less complexity. | More complex. |
Re-negotiation on employee agreement is available. | Re-negotiation of employee agreement is not available. |
Buyers can choose risk and liabilities to bear. | Buyers absorb risk and liabilities. |
Ownership can’t be lost and can’t exchange hands. | Ownership can be lost, exchange hands. |
Less prevalent in market. | More prevalent in markets. |
Retitling of asset is required. | Retitling assets in not required. |
Minority shareholders don’t create problems. | Minority shareholders can create problems. |
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