How long am I liable after selling my business?

Closing day feels like the end of the deal, but a seller’s exposure rarely ends there. How long it actually lasts is set mostly by what the purchase agreement says, not by any single rule that applies to every sale.

The survival period does most of the work

Representations and warranties are usually given a survival period — a window after closing during which the buyer can still bring a claim if one of them turns out to have been false. Different categories of representation often get different survival periods in the same agreement; fundamental representations, like ownership of the shares or assets being sold, are commonly treated differently from operational ones about day-to-day matters.

A holdback or escrow gives the buyer something to reach

Many deals hold back a portion of the purchase price, or place it in escrow, specifically to fund indemnity claims made during the survival period. Once that period ends and the holdback is released, a buyer’s practical ability to collect on a claim — even a valid one — becomes much harder, which is part of why the negotiated length and structure of the holdback matters as much as the survival period itself.

Some obligations do not run through the contract at all

Certain liabilities exist independently of what the purchase agreement says survives. A seller can remain answerable for its own tax filings regardless of the deal structure, and in an asset sale involving employees, successor employer obligations for things like workplace-insurance premiums can attach in ways that affect what a seller is expected to clear before closing. These categories are set by statute and regulator practice, not by negotiation.

Structure changes the shape of the exposure

A share sale generally leaves more historical liability inside the company being sold, because the corporate entity and its history do not change — the buyer inherits the company as it is, subject to whatever the representations and indemnities carve out. An asset sale lets a buyer be more selective about which liabilities it assumes, which is one reason sellers and buyers often disagree about structure.