A share deal is one of the two basic ways to buy a company. Instead of taking over individual items like machines, customer contracts or inventory, you buy the shares in the company itself. That can be the shares of a German GmbH or the stock of an AG. You buy the firm as a whole, including its legal shell. The other route is the asset deal, where individual assets change hands.
The company stays exactly as it is. All contracts, permits, bank accounts, employment relationships, receivables and also its debts simply carry on. They are attached to the company, not to the shares that change hands. So the only thing that changes is who owns the business. From the outside, operations continue without interruption.
The key difference from an asset deal is the effort. There you buy individual assets, and each important contract usually has to be transferred separately and approved by the other party. In a share deal that disappears, because the contracts stay with the company. One exception is so-called change-of-control clauses: they let a contract partner have a say when ownership changes.
A share deal is only possible with corporations such as a GmbH, AG or UG, because only these have shares that can be transferred. The legal form of the business therefore decides the route. A sole proprietorship has no such shares, so there the only way is an asset deal. For a GmbH, transferring the shares also requires notarial certification in Germany and Switzerland.
One point stays important: because in a share deal you also buy everything hidden, such as old disputes or tax risks, a thorough review of the company matters all the more. This due diligence uncovers what the figures do not show right away. In the purchase agreement (SPA), such risks are often covered by warranties from the seller.
For business sellers
For you as a seller, a share deal is often the tidy solution. You hand over your shares and with them the entire company, including everything that belongs to it. No laborious transfer of each single contract, no customer relationship you have to rewrite one by one. The business changes hands in one step.
In return, a buyer will look closely before saying yes. Because they also take on all the liabilities and risks, you will usually give warranties in the purchase agreement (SPA) confirming that the company is clean. The better organised your records are, the more smoothly and confidently the sale will go. A well-prepared data room makes a real difference here.
For corporate buyers
As a buyer, a share deal gives you a working business that carries on without interruption: the same contracts, the same team, the same bank account. For many successors this is a big advantage, because the day after the takeover the business simply continues as before.
The catch: you take on not only the good parts but also possible liabilities such as open legal disputes, old tax matters or hidden debts. That is why you review the company thoroughly before buying with a due diligence and have warranties included in the contract. This way you buy with open eyes, not a pig in a poke.
Example
Picture a small IT services GmbH with four employees and a steady handful of maintenance contracts. The owner wants to retire and sells his 100% of the GmbH shares for EUR 480,000. In this share deal the buyer takes over the company completely: all customer contracts, the team and the bank account continue unchanged, only the owner changes. After careful due diligence and with suitable warranties in the contract, the new owner runs the GmbH seamlessly, without customers noticing a thing.
FAQ
What is the difference between a share deal and an asset deal?
In a share deal you buy the company's shares and thus the firm as a whole, all contracts and obligations continue. In an asset deal, by contrast, you buy only selected individual assets, such as machines or customer contracts, and tend to leave risks behind.
For which companies is a share deal even possible?
Only for corporations such as a GmbH, AG or UG, because only these have shares that can be transferred. So it depends on the legal form. A sole proprietorship has no such shares, so there an asset deal is the only route.
In a share deal, do I also take on the company's debts?
Yes. Because the company continues unchanged, its liabilities and risks remain as well. This is precisely what makes a thorough due diligence and warranties in the purchase agreement count for so much.
Why is due diligence especially important in a share deal?
Because you take on the company with everything, including hidden liabilities like old tax matters or legal disputes. A careful review beforehand helps you spot such surprises and cover them in the contract.
Do I need a notary for a share deal?
For a GmbH, yes: the transfer of shares must be notarially certified in Germany and Switzerland. The notary ensures that everything is recorded correctly and with legal certainty.
Does a share deal fit the idea of „buying instead of founding“?
Very much so. Instead of building a company from scratch, a share deal lets you take over an established business including its customers, team and running contracts. You start from day one with a functioning operation rather than a blank page.
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