Almost all businesses these days are
incorporated. While the Seller's accountant might advise that a stock sale is
best, the accountant knows that the Buyer's accountant and attorney will favor
an asset sale for legal and tax reasons. Virtually all Sellers prefer an all
cash transaction and it is hard to disagree with that reasoning. In reality,
the Buyer's bank and attorney will advise or require that the Seller take a
promissory note for a portion of the purchase price.
At the same time, the Seller should review the tax
ramifications of a cash sale versus an installment sale. Often the Seller's tax
bracket will be lower after the sale; therefore, the income received in future
years from an installment sale could be taxed at a lower percentage than the
Seller's current tax percentage.