What Is The Difference Between An Asset Purchase Sale and a Share Sale When Buying an Adult Website?

• 21 Oct, 2024
• Adult Site Broker

As you start buying an adult website, it is essential to understand the different options available for acquiring an online business. When selecting a website, you need to decide if you want to acquire certain assets to bring into your pre-existing business or buy the shares of an entire company as part of a business acquisition or merger. 

Depending on your choice, you may face two sale options: an asset sale purchase or a company sale. In this article, Adult Site Broker breaks down each and the key differences between them to help you decide which one suits your needs when selling your adult website. 

What is an Asset Purchase Sale? 

An asset purchase or business sale occurs when a business owner sells some or all of their assets to a buyer through an asset purchase agreement (APA). An APA is a legally binding document that outlines the terms and conditions of one party buying specific assets, such as domains, equipment, or businesses, from another party. 

These are popular forms of acquiring an online business as a buyer because they clarify for the buyer which assets they buy from the seller, such as purchasing the adult website, the licensing agreements, email lists, software, and intellectual property rights. It defines what’s being purchased, the price, and other essential details, such as outlining which liabilities the buyer will agree to take on to ensure a clear and binding agreement between the buyer and seller.

What Is a Share Sale? 

The second type of company sale you may go through to buy an adult website is a share sale. In this case, you buy the shares from the company’s shareholders. In cases where the shareholder is the owner looking to sell their adult business, including the adult site you wish to acquire, without needing to restructure or lay off any staff, this may be the better option. 

What Are The Differences Between an Asset Sale and a Share Sale For Adult Sites? 

While both a share sale and an asset purchase sale allow you to sell your adult website, they have some distinctive differences. Understanding what they are will enable you to make the best choice when selling your adult website. 

The main difference between the two is how assets and liabilities are acquired. In the event of a share sale, such as for a business merger or acquisition, the buyer will take on all assets and liabilities in a “warts and all” situation. In contrast, an asset sale allows the buyer to pick and choose which assets and liabilities they wish to acquire. 

Another critical difference between the two is ownership. In a share sale, the buyer only owns the shares in the adult businesses they bought, while all assets remain with the company. On the other hand, for an asset sale (or business sale), the assets and contracts must be transferred in ownership to the buyer. 

When it comes to the staff of the adult website you wish to buy, in the case of a share sale, in most cases, the employees and employer will remain the same. Whereas for an asset purchase, employees will automatically transfer to the buyer on their current terms of employment, and the buyer becomes their employer.

Depending on which side of the sale you fall, seller or buyer, you may have conflicting ideas on which company sale type offers you the best options. As a seller, you may find it beneficial to do a share sale over an asset purchase sale; this way, you transfer the ownership of the entire adult business by having them buy your shares, allowing for a cleaner break from the adult site you are looking to sell. There also may be tax advantages. However, from a buyer perspective, they may choose to use an asset sale instead because it allows them to have more control over which specific assets they may wish to acquire alongside “cherry-picking” which responsibilities and liabilities they want to take on, that is especially beneficial when they buyer is worried about any unknown liabilities they could acquire. 

Conclusion 

Recognizing the difference between each option allows you to select the correct option when buying an adult website. It would help if you defined what you are looking for to suit your business needs. Do you want specific assets such as the domain, software, or an email list? Or are you looking to acquire or merge the entirety of the company into your pre-existing adult business? 

As you look to buy an online business, reach out to adult website brokers to act on your behalf, including locating potential adult websites that you may wish to make an offer on. If you want to buy an adult website, contact Adult Site Broker today or explore our listings to discover your next adult industry venture. 

Read more from Adult Site Broker here: 

Business Exit Strategies When Selling Your Adult Website

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