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In its most basic form, a stock acquisition is when a company or an individual purchases the majority of another company's shares. Doing this gives them control over that company. It generally involves acquiring more than 50% of the company's stock, effectively making the acquirer the new owner.
This means that the Seller is entitled to the cash on the balance sheet on the closing date of the transaction, and that the Seller is responsible for debts owed by the company (defined as Indebtedness).
In an asset acquisition, the buyer is able to specify the liabilities it is willing to assume, while leaving other liabilities behind. In a stock purchase, on the other hand, the buyer purchases stock in a company that may have unknown or uncertain liabilities.
A stock purchase agreement typically includes the following information: Your business name. The name and mailing address of the entity buying shares in your company's stocks. The par value (essentially the sale price) of the stocks being sold. The number of stocks the buyer is purchasing.
Cons. Complexity: Asset purchase acquisitions can be more complicated and time-consuming than stock purchase acquisitions because you're acquiring specific assets and not the whole company. This means you and the seller need to determine a fair value for each asset and liability and agree on the price for each.
Stock Sale: In a stock sale, the seller gives the buyer shares. Once the buyer holds all the target shares, it controls the business by virtue of being its new owner. Asset Sale: In an asset sale, the seller gives the buyer assets.
An asset acquisition is the purchase of a company by buying its assets instead of its stock. In most jurisdictions, an asset acquisition typically also involves an assumption of certain liabilities.
The agreement is exchanged and signed by both parties, payment completed and share ownership is transferred to the buyer. However, delays to completion may occur if either party has to meet certain obligations, such as: Consent of other shareholders to the transaction.