When one business purchases the equity (e.g., shares, ownership interest, etc.) of another business, the purchasing business typically obtains the liabilities of the business as well. In contrast, when a business generally purchases the assets of another business, the liabilities are usually not transferred.
There are at least four exceptions to this rule regarding asset purchases or transfers: (1) when the purchaser agrees to assume the debts and liabilities, (2) when the transaction amounts to a consolidation or merger, (3) when the purchaser is merely a continuation of the seller, and (4) when the transaction is entered into fraudulently to escape liability. Edwards v. Black Twig Marketing and Communications, LLC, 418 S.W.3d 512, 520 (Mo. Ct. App. 2013).
Some of these exceptions are fairly nuanced and can become cases in and of themselves, especially the “mere continuation” exception. State ex rel. Family Support Division v. Steak’m Take’m LLC, 524 S.W.3d 584, 591 (Mo. Ct. App. 2017).