Asset Sales and Purchase

An asset sale, also known as a sale of business assets, is the legal process whereby one party purchases a company's assets and liabilities to another party. It usually involves a transfer of ownership between two businesses, but can also involve other entities such as individuals or government agencies. Generally speaking, an asset sale consists of the purchase of physical assets such as property and equipment along with intangible assets such as intellectual property rights, contractual rights and customer relationships. The purchaser pays for these items either in cash or through an exchange of similar items of value.

The primary benefit of an asset sale is that it allows the seller to retain some benefits from the transaction. For example, the seller may receive ongoing revenue streams from customers acquired through the sale or be able to avoid paying capital gains taxes by transferring ownership rather than liquidating assets. Additionally, since only certain assets are sold in an asset sale it can be easier for both parties to clearly define who will receive what in the transaction.