There are two mainstream ways that Businesses go about acquiring other businesses. This is through either an Asset Purchase or a Stock Purchase. There are advantages and disadvantages to both approaches, taking a look at what you want to accomplish will go a long way towards helping you decide which method to take.
With an Asset purchase, if it is done correctly, you are not buying the liabilities of the company. You are merely purchasing the assets of the company. This has the obvious upside of not being locked into the companies debts and other liabilities. The other upside, is that in many cases you can re-depreciate the physical assets. The downside is that you do not get any of the goodwill associated with the company, including its name, credit worthiness, and general goodwill in the community.
With a Stock purchase you do take on all of the assets and liabilities of the company. With it you get any and all goodwill associated with the company. A stock purchase is also much simpler and cheaper to perform. It is even relatively simple to perform what is known as a “Cross Species Merger” when you are merging two different business entities, such as an LLC with a C-Corp.
Whether you want to merely buy the assets of a company, or buy it “lock stock and barrel” depends on what your business stands to gain from the acquisition. Make sure you perform your due diligence and really evaluate what it is you want to accomplish from the merger before you decide which method to employ.
Lock stock and barrel.