Asset Sale vs Share Sale: A Founder's Guide to Deal Structure

When founders imagine selling their startup, they picture a single number and a wire transfer. But *how* the deal is structured (as an asset sale or a share sale) quietly determines your taxes, your liability, and what actually changes hands. In the sub-$1M indie market, the vast majority of deals are asset sales, and understanding why protects you.

Asset Sale: Buying the Things, Not the Company

In an asset sale, the buyer purchases the *assets* of your business (the code, domain, customer contracts, brand, and intellectual property) but not the legal entity itself. Your company (the LLC or corporation) stays with you; it's just an empty shell afterward.

Why buyers prefer it: they get the valuable parts without inheriting your company's history, unknown liabilities, or past tax issues. It's the lower-risk option, which is exactly why it dominates the indie market.

What it means for you: - You typically keep responsibility for anything that happened *before* the sale. - You'll dissolve or repurpose the leftover entity afterward. - The asset transfer needs care: domains, repos, payment accounts, and customer data all have to move deliberately.

Share Sale: Buying the Whole Company

In a share sale, the buyer purchases the legal entity itself, and everything inside it, including its liabilities. The company continues unchanged; only ownership shifts.

Why this is rarer for indie deals: buyers inherit *everything*, including risks they can't fully see. They'll only accept this for clean, well-documented businesses, usually larger ones, and they'll do far deeper due diligence.

When it happens: when keeping the entity matters — long-term contracts that can't be reassigned, licenses tied to the company, or tax reasons specific to the seller's jurisdiction.

The Practical Differences That Matter

1. Liability. Asset sales shield the buyer from your past; share sales transfer it. This is the core reason buyers lean toward asset deals.
2. Taxes. The structure changes how the proceeds are taxed for both sides, and this varies enormously by country. This is the one area where you should talk to an accountant before signing.
3. What transfers. In an asset sale, every asset is listed and moved explicitly. Anything not on the list stays with you. Make the schedule of assets thorough.
4. Contracts. Customer and vendor contracts may need consent to reassign in an asset sale; in a share sale they usually continue automatically.

What You Actually Need to Do

For most indie founders selling a micro-SaaS, expect an asset sale. To prepare:

• Make a complete list of assets: domains, code repositories, design files, customer database, social accounts, trademarks, and any third-party accounts.
• Confirm you legally own all of it, especially code written by contractors and the domain registration.
• Get tax advice specific to your situation *before* agreeing terms, not after.

Deal structure isn't the exciting part of an exit, but getting it wrong is expensive. The good news: it's also predictable. Browse [real exits](/exits) to see how deals came together, and read our [due diligence red flags](/blog/due-diligence-red-flags-that-kill-deals) to avoid the problems that surface during transfer.

*This is general information, not legal or tax advice. Consult a qualified professional for your specific situation.*