Black Cat Corp

Multiple Choice

Black Cat Corp. wishes to conduct an asset purchase of Shylo Inc. so that it does not incur the unpaid taxes debt that Black Cat acquired prior to the asset purchase. Will the asset purchase achieve this goal?

A) No because all debts and liabilities are transferred over to the buyer in an asset purchase.
B) No because taxes are an exception to the rule that debts and liabilities do not transfer to the buyer with and asset purchase.
C) Yes because all debts terminate in an asset purchase.
D) Yes because a buyer can only legally be held liable for the debt the buyer created.