Company sale comparison

Whether you’re buying or selling a company, there are various factors that influence the structure of the deal. The main decision is whether to enter into a share sale or an asset sale. Our comparison explains the main features of each type of sale.

Asset or share sale?

As with many business decisions, the method by which a company is sold usually boils down to the bargaining strength of the respective parties and the tax and other liabilities involved in the different options. Such a major transaction will call for professional advice tailored to the circumstances of the buyer and seller. Our comparison will help you navigate the negotiations.

In some circumstances, there will not be a choice about the type of sale. For example, if the shareholders are not all behind a sale (and compulsory acquisition provisions cannot be invoked), it would have to be structured as an asset sale. If only part of the company’s business is being sold, an asset sale would need to be carried out, unless the relevant part of the business were hived down into a new company and then that company’s shares sold. See our Company Reorganisations Summary for information on hive-downs and other reorganisations that may be necessary before a sale.