Share Sale v Asset Sale: The choice that makes or breaks your exit

You only sell your company once. How you sell it writes the next chapter of your life. Get it right, and you walk away lighter, richer, proud. Get it wrong, and you keep paying—tax, time, and attention—for a business you no longer own.

A founder I know had two offers. Same buyer. Same price. Different route. One was a share sale. The other, an asset sale. He thought it was paperwork. It wasn’t. It was the difference between a clean exit and a year of loose ends, surprise tax, and long nights.

This choice looks technical. It’s not. It’s personal. It decides how much you keep, what you carry, and how fast you get to breathe again. You’re not picking a label. You’re picking your future.

The fork in the road you can’t ignore

Plain version: in a share sale, you sell your shares. The buyer steps into your shoes. They take the company—assets, contracts, liabilities and all. You get the price, hand over the keys, and the company keeps trading under new owners.

In an asset sale, the buyer picks what they want: customers, brand, stock, IP, team, equipment. You keep the company shell and anything they don’t take. That can mean tax liabilities, old disputes, and admin that refuses to die.

Both can be great. Both can be ugly. The trick is to match the route to the state of your business and your goals. When people say “share sale vs. asset sale,” they’re talking about control, risk, and peace of mind.

Headline prices flatter. Net proceeds matter.

With a share sale, many founders get capital gains treatment. That can be efficient if your jurisdiction rewards long-term ownership or offers entrepreneur reliefs. It’s also simpler: one seller, one tax bill, fewer allocation games.

With an asset sale, the price is allocated across assets. Some parts may be taxed as ordinary income, some as capital. The company pays tax, then you pay tax taking cash out. That can work if the deal is small or you have losses to use. It can also turn one dollar into seventy cents before it hits your account.

Spend a quiet hour with your accountant. Model both paths with real numbers: price, allocations, basis, losses, reliefs. If a buyer insists on an asset deal, push for a price that covers extra tax and shutdown costs. If they want a share deal, expect them to lean on price to offset the risk they inherit.

People, contracts, and momentum

Deals die in the details that run your business—customers, suppliers, team, licenses.

In a share sale, most of this stays in place. Contracts don’t need assignment because the company doesn’t change—only the owner. Momentum survives. Relationships keep breathing.

In an asset sale, you often need consents and assignments. Every contract becomes a to-do list. Some customers don’t sign. Some suppliers reprice. Some licenses won’t transfer. Your people may need new offers and benefits. Fine if the buyer only wants a product line or region. Painful if your value lives in a web of agreements that all need green lights.

Leaning toward an asset deal? Prepare early. Map the contracts that need consent. Identify key people and what it takes to bring them over. Plan for customers who stall. Silence kills closings. Over-communicate and keep the wheels turning.

Speed, simplicity, and the clean break

Buyers love asset deals because they can cherry-pick and leave old liabilities with you. Less diligence, faster approvals. That speed can be a gift if you need to close fast.

Sellers love share deals because they’re cleaner. You sell the whole thing and walk away. That clean break is priceless if you want to start the next thing—or take time off—without lingering admin.

Here’s the nuance. A share sale can take longer because buyers dig deeper. They inherit everything, so they look at everything: tax, contracts, IP, data, compliance. If your house is tidy, fine. If you have skeletons, the process will find them—and price them.

An asset sale can be slower than it looks if your business is contract-heavy. Every consent is a checkpoint. Every delay becomes leverage. The more signatures you need, the more time you need, and the more you risk last-minute price chips.

How to tilt the deal in your favour

• Clean the company. Pay small liabilities. Close dead entities. Clear personal guarantees. Document IP ownership all the way back to the first contractor.
• Tidy your contracts. Add assignment or change-of-control clauses before you go to market—short, friendly, clear. Keep both share and asset routes open.
• Map your tax. Build two models: share sale and asset sale. Know the net number that makes each work. Use it when a buyer pushes their preferred route.
• Frame risk; don’t hide it. If there’s a legacy issue, fix it or offer a narrow warranty or escrow. Buyers pay for certainty. Sellers get paid when they provide it.
• Create alternatives. Even one more interested party changes the tone. Choice is leverage. Leverage lets you pick the structure that serves your life, not theirs.

None of this is theory. It’s legwork that creates options. “Share vs. asset” is really “How do I keep options open long enough to choose well?”

The one thing to remember

You are not selling a pile of assets or a folder of shares. You’re selling certainty. Certainty that the buyer gets what they think they’re buying. Certainty that you get to leave without a trail of headaches. The structure that creates the most certainty for both sides—at the best net number for you—is the right answer. Sometimes that’s a share sale. Sometimes it’s an asset sale. The smart move is to be ready for both and choose on your terms.

Your move

If a buyer wired the money tomorrow, which path would you choose—and six months from now, which one would you regret less? You built this. Finish just as well.