Stock Purchase vs Asset Purchase

December 15, 2025

by a searcher from Northwestern University - Kellogg School of Management in Chicago, IL, USA

I am looking at a $2M purchase of a company and the owner wants to know if its going to be a stock or asset purchase. I know asset is in favor of the buyer and each type come with its own set of headaches. I believe he is asking me for one or the other based on the seller tax implications from the type of sale. Can anyone explain to me what the difference in Ent. value would be for the type of purchase? For example, $2M is a fair PP for a stock purchase, but maybe $2.1M would be the equivalent to an asset purchase.

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Reply by a professional
from University of Miami in New York, NY, USA

At that price point, it doesn't really matter. Depending on the specifics, seller likely wants stock sale because all of their assets are depreciated. With a stock sale, the seller can treat the basis allocation with mostly non-depreciable goodwill. That said, you can go along with the stock sale, and note in the PSA that it is a stock sale under 332(h)(10) of the tax code. That gets you asset sale treatment and the seller gets stock sale treatment. Win-win. Let me know if I can be of further assistance. -- Vishal S. Petigara, Esq. Managing Member Petigara Law Group, PLLC Tel: +###-###-#### Email: redacted https://calendly.com/petigara-law-group/meeting-with-vishal-petigara

Reply by an intermediary
from University of Leeds in New York, NY, USA

It definitely does matter, even at a $2M price point. In a stock purchase, the buyer acquires the entire legal entity and therefore assumes all historical and contingent liabilities, which typically requires broader diligence and carries higher residual risk post-close. In an asset purchase, the buyer can selectively acquire assets while excluding most legacy liabilities, resulting in a cleaner risk profile and more focused diligence, along with potential tax depreciation benefits. Because of this difference in assumed risk and economics, buyers will often value an asset deal slightly higher than an equivalent stock deal, even if headline enterprise value appears similar, your math is right though, we typically see a 5-10% delta in a stock vs. an asset sale.

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