Advantages of Stock Sale

In a stock sale, the buyer undertakes all assets and liabilities of the company, in other words total risks and rewards. Elimination of the controlling interest of existing shareholders is the major advantage of stock sale. Sellers of companies with losses or huge liability base would prefer getting rid of the business by selling off its stocks to avoid future commitments on the business, although stock sale agreement might be strong to retain the responsibilities of the seller. If the business in consideration for sale has many intangible assets, that cannot be measured accurately, stock sale would be more prudent than asset sale.