Posted by Randy_OH on March 19, 2002 at 20:52:42:
It is generally not advantageous to the buyer to buy the stock vs buying the assets. It may benefit the seller because he will get capital gain treatment on the total gain. The main problems for the buyer are (a) you will be assuming all of the liabilities of the corp (known and unknown) and (b) you will not get a stepped-up basis in the assets. The first problem is usually the deal killer, because there is no practical way to protect yourself. I suppose you could liquidate the corp immediately after the transaction, but you might still get nailed with some kind of liability issue. If the assets have a low basis, that could be taken into consideration in setting the price for the stock. HTH.