The share deal is – in contrast to the asset deal – a possible arrangements for the sale of a company.
A share deal is a pure purchase of rights. The shares in legal entity of the company that represent a participation right are sold. A share deal therefore requires that transferable participation rights in a company exist, e.g. in the form of shares in a limited liability company (GmbH) or shares in a limited partnership (KG or GmbH & Co. KG) or a private company (GbR). In contrast to an asset deal, the transfer of a company’s individual assets is not necessary in a share deal. Nevertheless, the question of which assets are attributable to the transferring legal entity is usually important for the purchaser. Frequently, a purchaser is primarily interested in acquiring certain items held by the company — such as commercial property rights or real estate — as part of a share deal. Depending on the legal form of the company that is to be transferred, there are special characteristics in the design of a share deal, both in terms of content and form. Thus, a transfer of limited partnership shares or company shares in a private company (GbR) can, in principle, be agreed informally, even if real estate or shares in a limited liability company (GmbH) belong to the company. The transfer of shares in a limited liability company (GmbH), on the other hand, must be carried out in accordance with statutory provisions by notarial certification and therefore always requires the assistance of a notary.
The question as to whether a particular transaction should be made using a share deal or an asset deal depends on the legal assessment of the respective advantages and disadvantages of possible transfer options. These must be assessed on a case-by-case basis. In particular, issues may arise that pertain to company law, liability law and employment law. Additionally, the form of transaction chosen often also depends upon tax valuations.
In the event of company insolvency, a purchaser may benefit from certain opportunities when acquiring a company. When this occurs, in addition to the general questions arising from company law, employment law and tax law, questions pertaining to insolvency law may also be relevant. As a rule, the purchaser may only wish to acquire a company out of insolvency if the risks and liabilities associated in the company have been clearly identified and, in turn, reduced or completely removed, that is, if the purchaser avoids liability as far as is possible. A share deal is also regularly considered by the buyer in the event of company crisis, especially if there is a viable insolvency plan with which the company is, ideally, already relieved of debt to an advanced degree.
Our lawyers at LEONHARDT RATTUNDE are familiar with the sale of companies, whether in the form of a share deal or an asset deal. They are ready to advise and assist in the preparation, negotiation and execution of the sale of a company, if necessary in cooperation with tax experts. They are here to create the best possible framework for each transaction and to achieve the desired goals.
If you are acquiring a company out of insolvency, our insolvency law expertise also enables us to provide advice in these matters, especially in the drafting of insolvency plans: Distressed M&A sits at the heart of LEONHARDT RATTUNDE's core expertise.
The notaries at LEONHARDT RATTUNDE are familiar with company transactions in all legal forms and sizes. They are able to offer comprehensive notarial support when a company transfer requires notarial certification.
A share deal requires that transferable participation rights in a company exist.