Asset Deal: What It Means and When It Is the Right Choice

An asset deal is a company purchase in which the buyer acquires individual assets and contracts — not the shares in the company.

That sounds like a technical detail, but it decides liability, taxes, the transfer of contracts and the fate of the employees. Anyone selling or buying should understand the difference from a share deal before the structure is fixed in the contract.

Asset deal vs. share deal: the core difference

In a share deal, the buyer acquires the shares in the company. The company stays the same, only the shareholders change — contracts, permits and legal relationships continue.

In an asset deal, the buyer instead acquires individual assets: machinery, inventory, customer contracts, brands, the customer base. They assemble the business, in effect, from its component parts.

	Share deal	Asset deal
Object of purchase	Shares in the company	Individual assets and contracts
Possible for	Corporations (e.g. GmbH)	All businesses, always for sole proprietorships
Contracts	Continue automatically	Must be transferred individually (often with consent)
Legacy liabilities	Remain in the company	Can partly stay behind (with limits)
Buyer's tax	No goodwill depreciation	Goodwill depreciable over 15 years

What transfers — and what does not

The supposed advantage of the asset deal is selection: the buyer takes what they want and leaves what they do not. In practice, this freedom has limits.

Contracts with customers, suppliers and landlords do not transfer automatically. Each one has to be transferred — and the contracting party usually has to consent. With a few large contracts that is manageable; with hundreds it becomes a project. Permits and licences, too, often attach to the person or company and cannot simply be sold along.

Liability: a point to examine closely

The idea that in an asset deal all legacy liabilities stay with the seller is only partly true.

Under § 38 of the Austrian Commercial Code (UGB), the acquirer of a business in principle enters into the business-related legal relationships and is liable for legacy debts; an exclusion of liability is possible under certain conditions, for instance through registration in the commercial register or notification of creditors. Under § 1409 of the Civil Code (ABGB), the acquirer is also liable for known or recognisable legacy debts up to the value of the assets acquired — and this liability is mandatory towards creditors.

This is context, not legal advice: the precise structuring belongs in the hands of lawyers and tax advisers. But the message is clear — liability in an asset deal is not a foregone conclusion.

Employees: the transfer of business

With staff, the freedom of choice ends. Where there is a transfer of business, employment relationships pass automatically to the acquirer with all rights and obligations under § 3 AVRAG. Employees cannot be cherry-picked. For outstanding severance entitlements, seller and acquirer are also jointly liable for a period.

Tax: why buyer and seller want opposite things

This is the most common conflict of interest — and it is usually tax-driven.

For the buyer, the asset deal is often more attractive: the goodwill acquired for consideration can be depreciated over 15 years in Austria, reducing the tax burden in the years that follow — a genuine cash-flow advantage. For the seller of a GmbH, the share deal is often more favourable: the gain from selling the shares is subject to 27.5 percent capital gains tax, whereas an asset deal at a sole proprietorship or partnership can be taxed at the progressive income-tax rate of up to 55 percent.

This opposition is why the deal structure is a central point of negotiation. Here, too: this is context, not tax advice — the actual effect depends on the individual case and should be assessed by professionals.

When an asset deal is the right choice

An asset deal makes sense when only a part of the business is sold, when the buyer explicitly does not want to assume certain risks or legacy liabilities — or when there simply are no shares. The latter is always the case when selling a sole proprietorship.

For a GmbH, by contrast, the share deal is often the simpler route and, for the seller, the more tax-efficient one — how a GmbH sale works is shown in "Selling a GmbH: process, specifics and pitfalls". Which structure ultimately fits is decided in the negotiation and in a cleanly run process that balances both sides' interests.

Selling a company is the most important transaction of an entrepreneur's life. Have it guided independently and discreetly — IGCP Capital Partners. → igcp.at

Frequently Asked Questions

What is the difference between an asset deal and a share deal?

In a share deal the buyer acquires the shares in the company, which continues unchanged; contracts and legal relationships carry on. In an asset deal the buyer acquires individual assets and contracts, each of which has to be transferred. The share deal is usually simpler, the asset deal more flexible for selection and risk delimitation.

Is the buyer liable for legacy debts in an asset deal?

Not across the board, but not entirely free of it either. Under § 38 UGB and § 1409 ABGB, the acquirer can be liable for known or recognisable business-related legacy liabilities, in part up to the value of the assets acquired. Certain exclusions are possible. The precise structuring should be examined legally — this is not legal advice.

Can I exclude employees in an asset deal?

Generally no. Where there is a transfer of business, employment relationships pass automatically to the acquirer with all rights and obligations under § 3 AVRAG. Selectively taking on individual employees is therefore strongly restricted.

Is an asset deal better for tax?

It depends on the perspective. For the buyer it is often advantageous because goodwill can be depreciated over 15 years. For the seller of a GmbH, the share deal is frequently more favourable. Which structure is better on a net basis should be assessed case by case.