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Is this corporation a C corporation? Not a S corp?
Since this a stock sale, it would be the acquiring corporation's responsibility to collect W-9's (for U.S. persons) and W-8's (for foreign persons) from each of the shareholders. If a shareholder does not complete a W-9 or W-8, the backup withholding is required. There is generally no withholding on sales of securities, even to nonresident aliens, though a 1099-B is required to be issued to U.S. persons. See Publication 515 found here: http://goo.gl/dcgWG6.
Just curious, why do you think the acquired corporation would be responsible for withholding. I would assume it does not take possession of the cash or stock, but rather the acquiring corporation sends it to the old shareholders. Furthermore, once the transaction closes, the acquired corporation is under new managment, so it would be able to do anything anyway. However, the acquiring corporation could require you to cooperate in identifying your shareholders and turning over any W-9s or W-8 you might have already obtained.
I hope this answers your question. Please let me know if I can clarify anything or answer any additional questions, and I would greatly appreciate positive feedback. Thanks, Jonathan
The IRS would expect the acquirer to issue the 1099s, but under your purchase contract they might have made you responsible for that.
Let me know if you have any other questions.