Choosing the right acquisition structure – A buyers guide to share vs. asset deals

August 5, 2025

Choosing the right acquisition structure – A buyers guide to share vs. asset deals

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By Georgina Rees

Read time: 2 minutes

One of the first important decisions in any business acquisition is choosing between a share purchase and an asset purchase. Each route carries different legal, financial, and strategic consequences.

In this article, our M&A expert, Georgina,  explores the legal differences between these approaches, when each might be appropriate, and highlight real-world implications for businesses considering an acquisition.

 Share vs. asset purchase: what’s the difference?

A share purchase involves buying the shares of a company, effectively taking ownership of the business as a whole, including its assets, liabilities, contracts, and employees. It is often seen as the more straightforward route, particularly when the business is to be acquired as a going concern.

In contrast, an asset purchase allows the buyer to select specific assets to acquire. These could include equipment, intellectual property, contracts, or premises. The buyer does not inherit the company’s liabilities unless expressly agreed.

 Share purchases: buying the company

If you are looking at acquiring a business in a share purchase, you, as the buyer, acquire the company’s shares and, with them, the entire business—including its assets, contracts, employees, and liabilities. This can be more straightforward than alternative purchase types and is often cleaner for the seller, as they walk away from all obligations.

Key advantages of a share purchase

• Continuity: Contracts, employees, and operations continue without interruption
• Strategic value: Ideal for acquiring the full business, brand, and market presence

Buyer considerations

• Due diligence: The buyer inherits all liabilities (past and present), making thorough due diligence essential.
• Complexity: Share deals can be more complex and require shareholder approvals.
• Cultural integration: Post-deal integration can pose challenges across systems and personnel.

A share purchase may be preferable when:

• Full business continuity and goodwill are key
• Long-term contracts or licences must remain intact
• IP rights and employee retention are important
• The buyer wants access to the company’s tax attributes (e.g. loss carryforwards)

Asset purchases: picking and choosing

In an asset purchase, the buyer selects specific assets and liabilities to acquire. This structure provides greater control and reduces the risk of inheriting unknown liabilities. An asset purchase can be used to acquire companies limited by shares, but also to acquire companies limited by guarantee, businesses run by sole traders and partnerships.

Key advantages

• Risk management: The buyer avoids historic liabilities not expressly assumed.
• Flexibility: Only desired assets are acquired, allowing for a more tailored transaction.

Considerations

• Transfer hurdles: Contracts and licences usually need to be assigned or novated to the buyer, which may require third-party consent.

• Continuity challenges: Customer and supplier relationships may not automatically transfer. The TUPE Regulations will likely apply to employees and therefore employees may need to be transferred to the buyer.

An asset purchase may be more appropriate when:

• The buyer only needs certain parts of the business
• The seller’s liabilities pose a concern
• The transaction needs to be streamlined and cost-efficient

Making the right choice

There is no one-size-fits-all answer. The right structure depends on the target business you are looking to acquire, your objectives, and sector-specific considerations.

Professional advice is key to making a well-informed decision when it comes to acquiring a business. Get in touch with our M&A experts using the contact form or on 02920 829 100 to see how we can help.