In an asset sale the buyer takes named assets out of your company and leaves the company, and most of its history, with you. It is the more common structure in small business sales, it is the one buyers ask for, and it has consequences for your tax bill that are worth understanding before you agree to it.
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What an asset sale of business assets actually transfers
Only what is listed: equipment, stock, goodwill, customer lists, intellectual property, and contracts where the counterparty consents to assignment. What stays with you is the legal entity, its bank account, its historic tax position and any liability not expressly assumed. That is precisely why buyers prefer it, and why sellers should read the excluded liabilities list carefully.
Why buyers want it
A clean line under the past, no inherited disputes or tax exposure, and a fresh tax basis in the assets which they can depreciate. The buyer also chooses which contracts to take. Every one of those advantages is a corresponding disadvantage for the seller, which is why the structure is settled with the price rather than separately from it.
What it means for you
Consents are needed for each contract and lease that matters, which takes time. The purchase price is allocated across asset classes, and that allocation drives your tax outcome as well as the buyer's, so it belongs in the agreement rather than being left to the filings. And you still have a company to wind up afterwards, with its own cost and paperwork.
Questions people ask about asset sale
Is an asset sale better or worse for me?
Usually worse on tax than a share sale and simpler in other respects. The gap is normally settled with price, so quantify it with your accountant before negotiating.
Do my employees transfer?
They are typically terminated and re hired by the buyer, subject to state rules and any agreements. Treat this as a real planning item rather than a formality.
What happens to my business debt?
It stays with the entity unless the buyer expressly assumes it, and secured debt is normally repaid at closing out of the proceeds.