Share Sales and Business/Asset Sales

Selling a company can be structured as a share sale or as a sale of the business and its assets. The two routes look similar commercially, but they allocate risk, liabilities and tax outcomes differently, so the paperwork (and the deal timetable) tends to differ as well.

In broad terms:

A share sale is where the buyer acquires the shares in the company.
A business/asset sale is where the buyer acquires specified assets (and only such liabilities as are expressly assumed).

The choice between a share sale and a business/asset sale is a key commercial decision. It is usually driven by legal, tax and financial considerations such as price, risk, ease of completion and how profits will be taxed. Independent legal, tax and financial advice should be taken before committing to a structure.

How Does a Share Sale Work?

In a share sale, the buyer acquires the shares from the existing shareholders. The company itself continues to own its assets and remain responsible for its liabilities. In practical terms:

The buyer takes on the company with all its assets, contracts, employees and liabilities (known and unknown).
The business can typically continue on a “business as usual” basis, because the legal entity does not change.

Useful where the buyer wants continuity of contracts, employees and trading history.

How Does a Business/Asset Sale Work?

In a business/asset sale, the buyer acquires some or all of the assets that make up the business. These may include:

Tangible assets, such as property, land, machinery and stock.
Intangible assets, such as intellectual property and goodwill.

The assets being sold must be specifically identified, and liabilities will only transfer if the contract states that they do. Separate arrangements are often required for contracts, employees and property.

Useful where the buyer wants to “pick and choose” which assets and liabilities to take on.

When Should You Use These Templates?

✅ You are selling all or part of the shares in a private company.
✅ You are buying shares from existing shareholders in a private company.
✅ You are selling a business (or part of a business) by transferring its assets.
✅ You need supporting paperwork for a share sale or business/asset sale, such as confidentiality terms, due diligence enquiries, board approvals, completion checklists and signing authorities.

Use of these templates does not remove the need for tailored legal and tax advice on the specific transaction.

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