In a share deal the buyer acquires the company that owns the business, so contracts, employees, licences and liabilities stay where they are. In an asset deal the buyer picks the assets and liabilities it wants, but each one has to be transferred, and employment and tax rules may move more than the parties intended. The choice affects transfer taxes, employee transfer rules, IP formalities and which approvals are needed, and the answer often differs country by country in the same deal.
What actually moves in each structure
A share sale changes who owns the employing company but not the employer itself. UK guidance describes TUPE protection for business transfers as requiring a change in the identity of the employer, which is why a pure share sale generally sits outside TUPE, while an asset sale of a business or part of one usually transfers the employees automatically under TUPE or the EU Acquired Rights Directive. In Germany, section 613a BGB has the same effect for transfers by legal transaction.
Asset deals need each asset to be transferred in the proper form. Copyright transfers in the United States must be in a signed writing, and in France an assignment of author's rights must be written and list the rights assigned. Competition and investment regimes generally treat asset purchases as acquisitions: Saudi Arabia's concentration concept expressly includes asset transfers, Germany treats acquisitions of significant assets such as a production site as a possible concentration, and the US HSR thresholds apply to assets as well as voting securities.12345678
Transfer taxes often decide the structure
Share transfers usually attract lower transfer taxes than direct property transfers, but anti-avoidance rules narrow the gap. UK share purchases are charged at 0.5%, French transfers of shares in SA and SAS companies at 0.1% compared with 3% for other company interests and 5% for predominantly real-estate companies, and Indian dematerialised transfers at 0.015%. Germany taxes share deals in property-owning companies once 90% or more of the shares or interests change hands, and Saudi Arabia charges real estate transaction tax at 5% on disposals of real estate.
The transfer tax cost should be set against other effects that this module does not cover, such as tax on the seller's gain, whether the buyer obtains a higher tax base in the assets, and whether tax losses survive a change of ownership. These require tax advice for each country.910111213141516
| Issue | Share deal | Asset deal | Examples researched |
|---|---|---|---|
| Employees | Employer unchanged; contracts continue | Automatic transfer where a business or part retains its identity | UK TUPE; EU Directive 2001/23/EC; Germany § 613a BGB |
| Transfer taxes | Share duties (UK 0.5%; France 0.1% or 3%; India 0.015% demat) | Property and asset transfer taxes (Saudi RETT 5%; German RETT) | GOV.UK; impots.gouv.fr; GrEStG; ZATCA |
| Property-rich companies | Can be taxed as a property transfer at 90% (Germany) or at 5% (France) | Taxed as a property transfer | GrEStG § 1; impots.gouv.fr |
| IP and contracts | Stay with the company; check change-of-control clauses | Each right must be assigned in the required form | 17 U.S.C. 204; French author's rights rules |
| Merger control and screening | Caught | Also caught where assets amount to a business or significant assets | Saudi GAC; Bundeskartellamt; US HSR |
Decisions to make
- Does the buyer want the whole company with its history, or only selected assets and liabilities?231An asset deal limits inherited liabilities but every asset must be transferred and employees of the business may move automatically anyway.
- Does the target, or any subsidiary, own real estate?14151216Germany taxes share deals at 90% thresholds, France charges 5% on predominantly real-estate companies, and Saudi Arabia charges 5% on property disposals.
- Are key IP rights, licences and contracts transferable without consent?45Asset deals need valid written assignments of IP; share deals leave contracts in place but may trigger change-of-control clauses.
- Will an asset purchase still need merger or investment clearance?678Several regimes catch asset acquisitions, so structuring as an asset deal does not avoid filings.
Documents usually needed
- Asset register and list of contracts with consent or change-of-control provisions
- Real estate schedule for every group company, including indirect holdings
- Employee census for the transferring business, with collective agreements and pension arrangements
- IP schedule with registered owners and the chain of title for unregistered rights
- Transfer tax and stamp duty computations for each country under both structures
Common mistakes
- Assuming an asset deal lets the buyer choose which employees to take
- Overlooking indirect property holdings that trigger German or French property transfer rules
- Relying on an informal or unsigned IP transfer in an asset deal
- Forgetting that local subsidiaries in a share deal may each need their own filings or registrations
- Comparing structures on transfer taxes alone without modelling tax on gains and the buyer's future deductions
What this guide does not yet confirm
These points need checking with a qualified local professional before you rely on them.
- Direct tax consequences (seller's capital gains, buyer's tax base, loss survival) were not researched for any market.
- Rules on assignment of contracts, licences and permits in asset deals vary by contract and regulator and were not researched.
- Registration formalities for transferring land, vehicles and registered IP in asset deals were not researched market by market.
Sources and review status
Each statement is numbered to the source it was checked against. We use official sources where we can, and each statement says whether it was checked against an official or a secondary source. Sources last checked on 19 October 2026. None of it has been professionally reviewed yet: it is research checked against official and secondary sources by WONE Global, not legal or tax advice.
The Acquired Rights Directive applies to any transfer of an undertaking, business or part of one to another employer as a result of a legal transfer or merger, meaning a transfer of an economic entity that retains its identity. Council Directive 2001/23/EC, Article 1(1)(a) and (b). Implemented by each Member State in national law.
Text read on legislation.gov.uk's archive of EU legislation as it stood at the end of 2020; EUR-Lex would not render the full text. Confirm the current consolidated text on EUR-Lex.
Where a business or part of a business passes to a new owner by legal transaction, the new owner takes over the rights and obligations of the employment relationships existing at the time of transfer, and terms from collective or works agreements may not be changed to the employees' disadvantage for one year, subject to exceptions. Section 613a(1) BGB.
When shares are bought, tax or duty of 0.5% is usually payable on the transaction: Stamp Duty Reserve Tax for electronic purchases, and Stamp Duty for purchases with a stock transfer form where the transaction is over GBP 1,000. United Kingdom shares. Reliefs and exemptions are not covered here.
Registration duty on a transfer of shares (actions) is 0.1%, other than shares in predominantly real-estate companies. France; companies whose capital is divided into shares, such as SA and SAS.
Registration duty on a transfer of company interests in companies whose capital is not divided into shares is 3%, after an abatement for each interest equal to EUR 23,000 divided by the total number of interests in the company. France; for example parts sociales.
Registration duty on a transfer of interests in a predominantly real-estate company is 5%. France.
Since 1 July 2020 stamp duty on a delivery-based transfer of securities in dematerialised form is 0.015%, and on a transfer of shares in physical form 0.25%, payable by the transferor for off-market and physical transfers. Central rates under the Indian Stamp Act as amended by the Finance Act 2019; collected through stock exchanges, clearing corporations and depositories. On-exchange purchases are charged to the buyer.
Secondary source dated 2020; the current Schedule I rates were not confirmed on the Gazette or India Code.
Real estate transfer tax is triggered where, within ten years, at least 90% of the interests in a partnership or the shares in a corporation that owns German real estate pass directly or indirectly to new partners or shareholders. Section 1(2a) (partnerships) and 1(2b) (corporations) GrEStG.
Real estate transfer tax is also triggered where a transaction brings, directly or indirectly, at least 90% of the shares in a company owning German real estate into the hands of one acquirer or its affiliates, including holdings of 90% or more in economic terms. Section 1(3) and 1(3a) GrEStG; section 1(3b) prevents double taxation with section 1(2a) and (2b).
Real estate transaction tax is charged at 5% on the disposal of real estate, including transfers of ownership for more than 50 years. Real estate disposals; exemptions apply under the RETT regulations.
Guideline updated to match Royal Decree No. M/84 dated 19/03/1446H. Reused from sa-tax-025.
TUPE protects employees in two types of transfer, business transfers and service provision changes, applies whatever the size of the business, and means employees' jobs and terms usually transfer to the new employer with continuity of employment. United Kingdom; the transferring part of the business must be in the UK. Exceptions can apply on redundancy or, in some cases, insolvency. Supplies of goods and single events are not service provision changes.
Questions on this topic
6 statements on share deals compared with asset deals
