When a buyer acquires the assets of a Florida business rather than its stock, the general rule is that the seller’s debts stay with the seller. That protection is real, but it has limits. Under Florida law, several recognized exceptions can expose a buyer to claims from vendors, tax authorities or creditors the buyer never knew about. Understanding which exceptions apply, and structuring the deal to address them, is one of the more consequential parts of any closely held business acquisition.
When the asset deal structure does not protect the buyer
The exceptions to the general rule are not accidental. Courts and agencies have developed them to prevent buyers from using an asset deal structure to strip a business of its value while leaving creditors and tax agencies without recourse. The label on the transaction matters less than how the deal is actually structured and what continues after closing.
Four recognized exceptions that expose buyers to seller liability
In closely held company acquisitions, those exceptions tend to arise in four common patterns:
- Expressly or impliedly assuming the seller’s liabilities
- Operating as a mere continuation of the seller’s enterprise
- Completing a transaction that functions as a de facto merger
- Using the transaction to hinder, delay or defraud any creditor of the seller
Purchase agreements may also include voluntarily assumed obligations, such as specific contracts, leases or benefit plans the buyer agrees to accept. These are separate from the court-imposed exceptions above and are governed by the terms of the agreement itself.
Florida’s bulk sales repeal and the tax clearance option
Florida repealed its bulk sales law, so there is no statutory mechanism requiring a buyer to notify the seller’s creditors before closing. This makes pre-closing due diligence especially important for identifying outstanding obligations. Buyers can also request a tax clearance certificate from the Florida Department of Revenue to confirm whether the seller has any unpaid state tax obligations.
What buyers should do before signing
Florida’s successor liability exceptions are narrow enough that most asset buyers will not face inherited claims – but when an exception does apply, the exposure can be significant and difficult to address after the deal closes.
Buyers who conduct thorough due diligence, obtain tax clearance and negotiate clear liability allocation provisions are in a materially stronger position than those who rely on the general rule alone. The structure of the deal matters; what the agreement says about liability matters more. The structure of the deal matters; what the agreement says about liability matters more.