Asset Business Purchase

Definition

A form of business purchase in which the buyer obtains the underlying assets of the business without assuming its liabilities. The purchase price is allocated among the business assets as part of the business Purchase Agreement.

What It Means

This is the most common form of small business acquisition. The buyer gets the assets that are needed to operate the business. No unwanted liabilities are assumed. In addition, the buyer may enjoy the tax advantages by increasing or “stepping up” the value of the assets from their book value as it appears on the seller’s Balance Sheet.

See Also