debt of old company

[zero18]

What is the name of your state (only U.S. law)? FLORIDA

if a company buys / acquiring another company, are they liable for there debt as well?

 

[JoshDom1898]

Yes or No.

There are two main ways to purchase a business/company: (i) an Asset Purchase; or (ii) a Stock Purchase. Both have very different liability.

Asset Purchase.

You want to buy your friends business but don't want to keep the name or the debt. You buy all of his assets (physical and intangible) and run the business as your own. He keeps all of the company debt and liabilities, you get all of the assets.

Stock Purchase (can be modified to Membership Purchase for an LLC or Partnership Interest Purchase for an LP).

You pay a fixed amount of money per share (or membership interest % point) for ownership of the company. You would have to buy up at least 51% of the ownership (whether stock or membership interest) to be the majority owner of the company. The Company name stays the same, all of the debts and liabilities are still the companies, and all of the assets are still the companies. So the Company (read Company not you as the purchaser) is still liable for all the debt and liabilities of the company.

 

[zero18]

thanks for the response!