When selling a business you have two options. You can opt either for an entity sale or an asset sale. Making the right choice can help minimize the taxes that you will owe once the sale is complete.
In an entity sale, you sell either your shares of corporate stock or your membership interests in an LLC. The business’s assets—equipment, furniture, real estate, inventory, accounts receivable, etc.—continue to be owned by the entity, and the entity owned by the buyer. In an asset sale, your corporation or LLC sells its assets to the buyer and you continue to own the corporate stock or LLC membership interests. In this system, you still own the entity—although it could end up being worthless.
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