If I buy shares instead of assets, do I inherit lawsuits I never knew about?

Yes. Buying shares means buying the corporation itself, and a corporation's history comes with it — including claims, disputes, or lawsuits that existed before you bought it, whether or not anyone told you about them. This is the central trade-off of a share purchase: you get the business intact, with its contracts and relationships undisturbed, but you also step into its full legal history, known and unknown.

The nuance is that "unknown" doesn't mean unprotected. A properly drafted share purchase agreement uses representations and warranties requiring the seller to disclose pending or threatened litigation, backed by indemnities that make the seller responsible if something surfaces later that should have been disclosed. A holdback or escrow — part of the price held back for a period after closing — gives you something concrete to draw on if a hidden claim appears, rather than chasing a seller who has already spent the proceeds.

None of this eliminates the risk entirely; it shifts and shares it. Thorough due diligence before closing, and a share purchase agreement built specifically around the litigation and disclosure history you uncover, is how a business lawyer manages this exposure rather than pretending it away.