Asset sale or share sale?
The short answer
Most ownership transfers in the $50,000 to $150,000 band are asset sales: the buyer takes named assets and the seller keeps the entity along with its history and liabilities. A share sale moves the company itself, and is generally used only where contracts or licences cannot be assigned to a new owner.
What is the difference?
An asset sale transfers the individual assets of a business, while a share sale transfers the company that owns them. In an asset sale the buyer receives a named list: the code, the domains, the customer records, the brand, the accounts that can be assigned. In a share sale the buyer receives the entity itself, so everything it owns and everything it owes comes along, including the parts nobody has thought about for three years.
The choice is a decision about what the buyer is willing to inherit. Everything else about the two structures follows from that.
Which one is usual at $50,000 to $150,000?
The asset sale, by a wide margin. The entity at this size is typically a single-member company holding little beyond the product, some hosting bills and a bank account. Acquiring the company would mean acquiring its filing history, its past contracts and anything that happened before the buyer arrived, none of which the buyer wants and all of which they would have to check.
Asset structures also suit the way these transfers complete. A named list with a completion test per item is something an escrow inspection window can actually work against.
What does each structure involve?
The differences show up in diligence, in documentation and in what happens after completion.
| Asset sale | Share sale | |
|---|---|---|
| What moves | Named assets on a schedule | The company, entire |
| Liabilities | Stay with the seller | Transfer with the shares |
| Trading history | Stays with the seller | Transfers with the shares |
| Diligence scope | The assets and the revenue behind them | The assets plus the entity's full history |
| Contracts | Assigned individually, sometimes needing consent | Untouched, because the counterparty is still dealing with the same company |
| Typical documentation | Asset purchase agreement with schedules | Share purchase agreement, usually longer, with heavier warranties |
| Professional fees at this size | Lower | Higher, sometimes by several times |
| What the seller keeps | The shell, to wind down or reuse | Nothing |
The fee line is not a rounding error on a $120,000 transaction. Entity diligence can add a fortnight and a few thousand dollars per side, which has to be worth something specific.
When is a share sale worth it?
When something genuinely cannot travel any other way, and the revenue depends on it. Contracts that prohibit assignment without written consent are the usual reason. So are licences, regulatory permissions, and long-standing supplier terms that a new entity would have to renegotiate from scratch.
Take a two-sided platform listed at $120,000 with 40 supplier agreements, each requiring consent to assign. An asset transfer means 40 conversations, 40 chances for a supplier to renegotiate, and a real prospect that the revenue the price was built on shrinks before completion. A share sale leaves every agreement in place, and the buyer pays for that with wider diligence and harder-fought warranties.
What does the buyer inherit in each?
In an asset sale, the buyer inherits what the schedule names and nothing else. That is the attraction: the unknowns are bounded by a list, and the seller's tax position, old disputes and past obligations stay where they are. It also means anything left off the schedule stays with the seller too, which is why an incomplete schedule is the main risk in this structure.
In a share sale the buyer inherits everything, disclosed or not. The warranties become the buyer's main recourse for what the accounts do not show, which is why they are negotiated far harder and why the diligence bill grows. Buyers at this size who take on a share sale usually want several years of filings, bank statements and contracts in front of them before they sign.
What does the seller carry afterwards?
In an asset sale the seller keeps the entity and everything attached to it, which means winding it down properly, settling any outstanding obligations and closing accounts in an orderly way. That is administrative work, not a trap, and it is one reason some sellers prefer the structure: there is a clean line under the business and the shell can be reused.
In a share sale the seller walks away from the company completely, and their exposure shifts to the warranties they gave and however long those survive. Sellers sometimes prefer a share sale for tax reasons specific to where they are, which is a conversation for their own accountant rather than a general rule.
How does the structure change the transfer itself?
An asset sale is transferred item by item against a schedule, which fits an escrow arrangement well. Each asset has an objective completion test, the buyer inspects, and the independent agent releases the full amount in a single payment once completion is confirmed. Indiemaker is non-custodial and never holds the funds in either structure.
A share sale completes differently, because the assets do not move at all. What changes is the share register and the control of the company's accounts, so the completion tests are about directorships, registers, banking access and control of the entity rather than about domains and repositories. That is less intuitive to inspect, and it needs specifying carefully before funds are deposited.
How do you decide?
Start from the asset sale and require a reason to leave it. If the reason is a contract, a licence or a permission that cannot be assigned and that the revenue genuinely depends on, a share sale earns its extra cost. If the reason is that it feels tidier, or that the seller read something about it, it does not.
This is general information rather than legal advice, and a transfer at this size warrants a lawyer's review in the relevant jurisdiction.
Related: asset-sale, share-sale, do-i-need-an-asset-purchase-agreement
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