Asset vs share deal

Asset vs share deal — the structural fork of every acquisition. An asset purchase buys the things — equipment, inventory, brand, lease assignment, customer relationships — into your fresh entity, leaving the seller’s corporation (and its open cases, unremitted contributions, and unknown claims) behind a wall, at the cost of re-papering permits, BIR registration, staff, and contracts. A share purchase buys the corporation itself — seamless continuity, total liability inheritance — justified mainly when the entity holds something unassignable (a license, accreditation, or lease), and priced with deeper diligence, stronger warranties, and a holdback. PH default for small deals: assets, precisely because seller record-keeping is why you want the wall.

First used in: 4.3 · PH due diligence: acquisition II