Buying or Selling a Business? Asset sale vs. Share sale
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When buying or selling a business, one of the first and most important decisions is how the transaction will be structured. Two common methods are through a Sale of Shares or a Sale of Business (Asset Sale) agreement.
While both methods transfer ownership, they differ significantly in legal, tax, and operational implications. Understanding these differences is key to avoiding costly mistakes and ensuring a smooth transition for all parties.
What is a Share Sale?
In a Share Sale, the buyer purchases all or a portion of the company’s shares from the current shareholders. The buyer becomes the new owner of the company, acquiring its assets, liabilities, and ongoing operations.
What is a Business (Asset) Sale?
In a Business Sale, also called an Asset Sale, the buyer acquires specific business assets (e.g. equipment, inventory, goodwill, IP). The seller retains the legal entity, and the buyer often forms their own company to operate the business.


Which Structure Is Right for You?
There is no one-size-fits-all answer. The best structure will depend on:
- The risk profile and liability of the existing business
- Tax considerations for both parties
- Contractual obligations (leases, licenses, IP, etc.)
- Whether the buyer wants a clean slate or continuity
Legal Guidance is Critical
Whether you're selling a business or acquiring one, the structure of the deal has far-reaching consequences. Our legal team is experienced in guiding clients through the sale or purchase of businesses of all sizes.
Need help deciding between a Share Sale and a Business Sale? Contact us today on 03 5623 5166 or reception@wakefieldlawyers.com.au, or head to our website to book an appointment online.
Disclaimer: The information in this post is general in nature. This does not constitute legal advice and should not be relied on as such. Please contact one of our Lawyers if you are seeking advice about a specific legal matter.