Asset vs. Stock Purchase When Buying an Online Business: Accounts, Domains and IP
When you buy an online business, you can buy the assets the business uses, such as its brand, inventory, domain names, content, customer data and supplier relationships, or you can buy the company that owns them by purchasing the seller’s stock or membership interests. The e-commerce asset purchase vs stock purchase decision affects which liabilities you take on, how taxes work and, importantly for online businesses, how accounts and digital assets move to the new owner.
This guide explains the tradeoffs at a practical level. It is not legal, tax or intellectual-property advice. The right structure depends on the specific transaction and should be decided with qualified advisors.
Asset Purchases
In an asset purchase, the buyer forms its own entity and acquires selected assets, which may include:
- Trademarks, brand names, product designs and content
- Domain names and websites
- Inventory, counted and valued at closing
- Customer lists and data, subject to applicable privacy rules and permissions
- Supplier and fulfillment relationships, where agreements can be assigned
- Goodwill
Potential advantages
- The buyer generally chooses which liabilities to assume
- A fresh entity without the seller’s history
- Possible tax benefits from allocating the price among assets, subject to tax advice
Potential drawbacks
- Some accounts, such as marketplace seller accounts, payment accounts and advertising accounts, may not be transferable to a new entity under the applicable platform terms and may need to be re-established
- Re-establishing accounts can affect reviews, rankings, history or approvals, depending on the platform
- Contracts generally require consent to assign
Stock or Membership Interest Purchases
In a stock purchase, the buyer acquires the entity itself, and accounts and contracts held by that entity may remain in place, depending on their terms.
Potential advantages
- Accounts held by the entity may continue without being re-established, subject to platform terms and any requirements to update ownership information
- Contracts may remain in place unless they restrict changes of control
Potential drawbacks
- The buyer inherits the entity’s liabilities, including tax, regulatory and contractual obligations
- Diligence must cover the entity’s full history, including sales tax practices
- Platform terms, contracts and loan documents may treat a change of ownership as requiring notice or approval
Buyers in stock purchases commonly negotiate indemnities, escrows or holdbacks. Our e-commerce due diligence checklist covers what to review.
Transferring Accounts, Domains and IP
Digital assets require careful planning regardless of structure:
- Domains: confirm who holds the registration and how it will be transferred
- Marketplace and storefront accounts: review each platform’s terms on ownership changes and transfers
- Advertising and analytics accounts: determine whether access can be transferred or whether new accounts and history will be needed
- Trademarks and copyrights: confirm registration, ownership and recorded assignments
- Software and subscriptions: identify which licenses can be assigned and which must be replaced
- Customer data: confirm what can be transferred under applicable privacy rules and the permissions under which data was collected
Transferability is not universal. It depends on platform terms, agreements and circumstances, and should be reviewed with counsel. Because sales may depend on particular accounts, transfer risk is closely related to e-commerce platform dependence.
Structure and Deal Terms
Uncertainty about transfers sometimes leads to deferred payments, holdbacks or earnouts tied to a successful transition. See our guide to seller financing and earnouts in e-commerce acquisitions.
How Lenders View Each Structure
Lenders finance both structures. They will want to understand which assets and accounts the business depends on and how they will transfer. SBA-backed loans have their own requirements for change-of-ownership transactions; see our page on SBA 7(a) business and real estate loans, and confirm requirements with your lender.
Questions to Decide Early
- Which accounts and assets drive sales, and can they transfer?
- What liabilities exist in the seller’s entity?
- What are the tax consequences for buyer and seller?
- What consents are required from platforms, suppliers and lenders?
Buyers can see how structure fits into the full process in our guide on how to buy an e-commerce business.
US Professional Funding works with buyers acquiring established, operating e-commerce businesses. Learn more about our e-commerce business acquisition financing.
