This page is general information, not legal, tax or financial advice. Talk to a qualified professional about your situation.
Company data goes with the business in a stock sale and goes only where the agreement says in an asset sale. Either way, three things decide what you can do with it: what you promised customers and employees, what the buyer wants and pays for, and what you must keep for tax and legal reasons after closing. Treat records as a line in the deal, not an afterthought.
Stock sale vs asset sale
| Stock (or membership interest) sale | Asset sale | |
|---|---|---|
| What transfers | The whole company, including all its records and contracts | Only the assets listed in the agreement |
| Customer data | Stays with the company the buyer now owns | Transfers only if listed, and only as your privacy promises allow |
| Records the buyer does not want | Buyer’s problem | Stay with the seller entity |
| Your obligations after closing | Mostly the buyer’s | You still keep tax, payroll and employment records |
Privacy promises travel with the data
If your privacy policy told customers their information would not be shared or sold, a transfer can break that promise. Many policies include a clause allowing transfer in a merger or sale; check yours. In bankruptcy, the Bankruptcy Code makes this explicit: under 11 U.S.C. § 363(b)(1), customer personal information covered by a no-transfer policy can only be sold consistently with the policy or with court approval after a consumer privacy ombudsman reviews it. Outside bankruptcy there is no ombudsman, but the promise still binds you.
Due diligence will ask about data
Expect questions on:
- what personal data you hold, about whom, and under which privacy notices;
- security incidents and how they were handled;
- customer contracts with data clauses;
- who owns the software and content the company uses;
- any licence of company data you have granted.
Prepare a short data map: systems, years of history, categories of personal data, and the policy that applied.
Licensing data before or alongside a sale
Some owners license de-identified copies of company records to AI developers. Before a sale this needs care: in a stock sale the buyer inherits the licence; in an asset sale the buyer may want the same data. Done openly, it can be a separate source of value, especially for records the buyer does not plan to use, such as years of old email and tickets. Disclose it and agree it in the deal.
After closing
Keep what you must. The IRS says most tax records should be kept for three years, employment tax records for at least four, and some for seven. If the selling entity is dissolved after the sale, its records still need a home; see how to dissolve an LLC or corporation.
Questions people ask
Can we license our data to an AI developer and still sell the company?
Possibly, but it must be disclosed to the buyer and fit the deal. A licence granted before closing is a contract the buyer inherits in a stock sale, and it can affect what the buyer thinks it is paying for. Agree it with the buyer and your advisers first.
Who keeps the records the buyer does not take?
In an asset sale, the selling entity does. It still has tax and employment record obligations after the sale, so plan where those records live and who pays to keep them.
Sources
Related guides
What happens to company assets, including data, in bankruptcy
How a bankruptcy estate, trustee and court handle company assets, the special rule for customer personal data, and what owners should do with records.
How to shut down a startup: the full checklist
A step-by-step wind-down checklist for US startups: board approval, investors, employees, final taxes, dissolution, accounts, data and records.
Transferring customer data when you sell your business
When giving customer data to a buyer is not a "sale" under California law, what the buyer owes customers, and what the FTC expects.
Part of Selling your business.