Why structure matters
In a purchase and sale of assets, the buyer chooses what it takes and, in principle, leaves the seller's liabilities behind. That principle has exceptions: courts can sometimes hold a buyer responsible as a successor, for example when the deal is effectively a merger or the buyer is essentially the seller continuing in a different form, and some tax obligations follow the assets. Contracts, leases, and licenses often cannot be assigned without the other party's consent, so a key customer agreement or a lease may need its own negotiation. Tax treatment differs for buyer and seller depending on how the price is allocated among the assets, which is why the allocation is often argued over.
Before anyone signs
Buyers usually run lien and judgment searches, review title to equipment and intellectual property, and look at tax filings and pending claims. In New York, a buyer of business assets may need to notify the state tax department before closing to avoid inheriting the seller's unpaid sales tax, and that notice has its own timing. Sellers should gather contracts, permits, employee information, and records showing who owns each asset, including software and domain names. Representations, indemnity terms, and escrow or holdback arrangements allocate the risk of whatever neither side discovered.
How the conversation starts
Early on we look at what is actually being sold, who has to consent, how employees will be handled, and whether a letter of intent already commits either side to anything. Some provisions in a letter of intent, such as confidentiality or exclusivity, are often binding even when the price terms are not. We also ask whether creditors, partners, or family members have claims that could disrupt the closing. Answering those questions first usually shapes the agreement more than the drafting does.
