Four ways an agency changes hands.

Two buyers can offer the same $10M and hand the seller wildly different net proceeds, because the transaction type determines what transfers, who inherits the liabilities, and how the gain is taxed. The first fork is the deepest: selling the business entity (a stock sale) versus selling its assets (an asset sale). Everything else follows from there. This piece walks the four types, the tax mechanics that separate them, and the emerging fractional structure reshaping the market. None of it is tax advice — the entity-specific math is the seller's advisor's to run.

§ 01 · Asset vs stockThe fork that decides the tax.

In a stock sale, the buyer acquires the entity itself and everything inside it — assets, liabilities, contracts, the lot. In an asset sale, the buyer acquires only enumerated assets (clients, goodwill, contracts, the non-compete) and the seller's shell retains whatever isn't transferred. The distinction sets the tax character, the liability flow, and the complexity.

§ 02 · Asset salesThe market default — and the C-corp trap.

Asset sales are 70%+ of agency deals, and buyers prefer them for one big reason: the tax basis step-up. The buyer's basis resets to the purchase price, generating years of amortization deductions — on a $10M goodwill purchase, roughly $667K of annual deduction over 15 years. That step-up is real money to the buyer, which is why they pay a modest premium (often 11×–12×) for the structure.

For sellers, the asset sale's danger is the C-corporation double-taxation trap. A C-corp pays corporate tax on the sale gain, then the shareholder pays capital-gains tax on the distribution — an effective rate that can reach the low 30s on the deal. The same agency as an S-corp passes the gain through once, at roughly 15%. The gap can be well over a million dollars on a $10M deal — entirely a function of entity structure, which is why this is a question to settle with a tax advisor long before a sale.

§ 03 · Stock sales and mergersSingle-event tax, and the QSBS prize.

A stock sale creates a single capital-gain event and avoids the mixed-rate complexity of allocation — often netting more for an S-corp than an asset sale would. Its headline prize sits with C-corporations: qualified small business stock. Stock held five years in a qualifying C-corp can exclude up to 100% of federal capital gains (to a per-shareholder cap), turning a seven-figure federal bill into state tax only. Many PE acquirers structure deals as stock sales specifically to unlock it. Buyers accept a modest discount (often 9×–11×) because a stock sale means inheriting the entity's liabilities with no basis step-up.

Mergers — a statutory combination where one entity survives — are under 5% of agency deals, used mainly to preserve a seller's brand or licensing continuity. Most are taxable, with treatment resembling an asset or stock sale depending on structure.

§ 04 · Fractional M&ASelling a slice, not the company.

The newest structure changes the unit of sale. Fractional M&A lets an owner sell a defined segment of the book — a geography, a line of business, a carrier's customers, or a revenue tier — rather than the whole agency. Mechanically it's an asset sale of a subset; strategically it turns an all-or-nothing exit into composable building blocks. An owner can take partial liquidity, shed a high-concentration segment that was itself a risk, spread gains across tax years, and validate the agency's valuation on a market-tested slice — all while retaining the majority of the book.

Digital marketplaces — Milly Books among them — are what make fractional sales practical at scale, matching slice supply to buyer demand in a way that didn't exist before. Roll-up platforms assemble slices from several agencies into a larger book; owners use sequential slice sales to transition toward retirement gradually. It remains a smaller share of the market than whole-agency deals, but it is the structural shift worth watching — from whole-company transactions toward a secondary market in agency assets. The companion diligence & execution piece covers the allocation mechanics each slice still requires.

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