Share purchase vs asset purchase: which to choose?
Introduction
Are you considering acquiring a company? The first strategic decision involves choosing between two fundamentally different acquisition structures: share purchase (share deal) or asset purchase (asset deal).
This distinction is not merely a legal formality. It determines who assumes existing liabilities, how the transaction will be taxed, which contracts will be transferred automatically, and what flexibility you will have in post-acquisition restructuring.
A share deal means you purchase the shares of the existing company. You inherit everything: assets, contracts, employees, but also debts and hidden risks. An asset deal allows you to select precisely what you purchase, leaving certain liabilities with the seller.
The choice between share purchase and asset purchase depends on your acquirer profile, the nature of the target company, and your strategic objectives. A family SME without complex liabilities is not handled the same way as a company with potential disputes.
This guide compares the two approaches, details their respective advantages and disadvantages, and helps you identify which structure best suits your company acquisition project.
📌 Summary (TL;DR)
Share purchase (share deal) transfers ownership of the company with all its assets and liabilities, offering administrative simplicity but exposing the acquirer to hidden risks. Asset purchase (asset deal) allows precise selection of what is acquired, limiting risks but requiring more administrative procedures.
The choice depends on your risk tolerance, the complexity of the target company, and the tax implications specific to your situation. Each structure presents distinct advantages depending on the transaction context.
📚 Table of contents
What is a share purchase (share deal)?
A share purchase (or share deal) involves acquiring the shares or equity stakes of an existing company. The acquirer becomes owner of the legal entity in its entirety.
The legal structure remains intact: all assets, liabilities, contracts, licences and obligations are automatically transferred with the company. The business continues to exist under the same legal form.
In Switzerland, this approach applies to AG (public limited companies) and GmbH (limited liability companies). The change is limited to the identity of shareholders or partners, registered in the commercial register.
In concrete terms: you acquire the company "turnkey" with its complete history.
What is an asset purchase (asset deal)?
An asset purchase (or asset deal) allows you to acquire only selected elements of the business: equipment, stock, customer base, brand, commercial lease, patents.
The acquirer chooses precisely what they take over and what they leave. The old company can be liquidated by the seller or retained for other activities.
This method resembles purchasing a business: you create your own legal structure and transfer the selected assets into it. Each element is subject to an individual transfer.
Example: taking over the equipment and customer base of a restaurant without the debts of the former operation.
Comparison: advantages and disadvantages
The choice between share deal and asset deal depends on your risk tolerance, the condition of the target company and your strategic objectives.
Each approach presents specific benefits and constraints in terms of administrative complexity, legal protection and tax implications.
The difference between share and asset deal lies primarily in what is transferred: the complete entity versus selected assets.
Let us analyse each option in detail to facilitate your decision.
Advantages of share purchase
Administrative simplicity: a single transfer agreement suffices. No individual asset transfers or contract renegotiations required.
Legal continuity: all commercial contracts, licences, authorisations and permits remain valid automatically. Commercial history is preserved.
Speed: the transaction process is generally shorter. Relationships with customers, suppliers and employees continue without interruption.
Potential tax advantages: depending on the situation, taxation may be more favourable, particularly for individuals in Switzerland.
Disadvantages of share purchase
Assumption of all liabilities: debts, ongoing disputes, past tax and social obligations are automatically transferred with the company.
Hidden risks: liability for undetected problems (disputes, fines, guarantees given). Unpleasant surprises may arise after acquisition.
Complex due diligence: preliminary audit must be exhaustive and costs more. Every aspect of the company requires thorough verification.
Less flexibility: impossible to select only the interesting elements. You take everything, good and bad.
Advantages of asset purchase
Total selectivity: you choose precisely which assets to take over and leave what does not interest you.
Protection against liabilities: no automatic assumption of debts, disputes or hidden obligations of the former company.
Fresh start: clean structure without problematic history. Possibility to depreciate acquired assets for tax purposes according to their acquisition value.
Clarity: each transferred element is documented individually. You know exactly what you are buying and for what amount.
Increased security, particularly for a first business acquisition.
Disadvantages of asset purchase
Administrative complexity: each asset requires a separate transfer agreement. The process is lengthy and generates high legal costs.
Mandatory renegotiation: supplier contracts, customer contracts, commercial lease must be renegotiated individually. Some partners may refuse.
Potential loss: licences, authorisations or certifications may not be transferable. Possible interruption of activity during transition.
Tax burden: VAT applicable on certain assets. The seller may be taxed on capital gains realised.
Tax aspects: share deal vs asset deal
Share deal: the seller as an individual often benefits from capital gains tax exemption in Switzerland. Cantonal transfer duties may apply (variable by canton).
Asset deal: VAT on certain assets (equipment, stock). The seller is taxed on profits realised. The acquirer can depreciate acquired assets, reducing future tax burden.
Tax implications vary considerably depending on structure, canton and personal situation.
We recommend consulting a specialised tax adviser through our partner network to optimise your acquisition structure.
Which type of acquisition to choose according to your profile?
The choice between share acquisition or asset acquisition depends on your experience, risk tolerance and the condition of the target company.
There is no universal solution. Each situation requires specific analysis of legal, tax and operational issues.
Here are practical recommendations according to different acquirer profiles and company contexts.
These guidelines will help orient your thinking and discussions with your advisers.
When to favour share purchase
Healthy company: clean financial history, no known disputes, tax and social situation in order.
Critical licences: regulated activities (health, finance, transport) where authorisations are difficult to obtain or transfer.
Essential continuity: preservation of established contractual relationships with customers, suppliers or key partners.
Acquirer profile: experienced in M&A, financial capacity for thorough due diligence, competent legal team.
This option suits acquirers who value speed and accept a controlled level of risk.
When to favour asset purchase
First acquisition: acquirer without prior experience in business takeover, seeking maximum security.
Complex situation: doubts about hidden liabilities, potential disputes, uncertain tax history or necessary restructuring.
Strategic selection: interest only in certain specific assets (brand, customer base, equipment) without taking over everything.
Integration: merger into an existing structure where only certain elements are relevant.
Recommended approach for cautious acquirers facing companies with complex histories.
Key steps for each type of acquisition
Share deal: signing letter of intent, thorough legal and financial due diligence, negotiation of warranties and indemnities, signing of transfer deed, registration in commercial register.
Asset deal: detailed inventory of assets, individual valuation of each element, negotiation of transfer agreements, obtaining third-party consents (landlord, suppliers), actual transfers, termination of old structure.
In both cases, rigorous preparation is essential. The companies for sale visible on Leez generally indicate the type of transaction envisaged.
Our platform facilitates initial contacts and connection with qualified acquirers.
The choice between share purchase and asset purchase depends on your situation, risk tolerance and objectives. Share purchase offers operational continuity and administrative simplicity, but carries risks related to hidden liabilities. Asset purchase allows targeted selection and better legal protection, at the cost of increased complexity and potentially higher tax costs.
Each transaction is unique. Tax, legal and financial aspects vary according to canton, sector and company structure. Professional support from business transfer experts remains essential to secure your acquisition.
Are you looking for a company to take over in Switzerland? Discover the opportunities available on Leez and access hundreds of businesses for sale in all sectors. Our network of qualified partners can support you in your acquisition project, whatever structure you choose.
