Generally speaking, buyers prefer asset sales while sellers prefer stock sales. In an asset sale, the seller keeps possession of the legal entity and the buyer purchases individual assets of the company such as equipment, fixtures, and inventory. Asset sales are usually cash-free, debt-free transactions—they typically do not include cash and the seller normally retains the long-term debt obligations. With a stock sale, the buyer is purchasing the stock in the company and likely assumes responsibility for all of the business’ liabilities. In this podcast Gower Idrees, CEO of RareBrain, explains the reasons why buyers tend to prefer buying assets in a business sale as opposed to stock.