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
- Liability. Asset sales shield the buyer from your past; share sales transfer it. This is the core reason buyers lean toward asset deals.
- 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.
- 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.
- 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.*