Asset Deal

What is an asset deal?

Asset deal (in German: Kauf einzelner Wirtschaftsgüter, purchase of individual economic assets) refers to a company purchase in which the acquirer takes over the assets, contracts and rights of a business operation instead of the shares in the company. The seller is therefore not the shareholder but the company itself, to which the business legally belongs, for example the GmbH (German limited liability company). It is comparable to taking over a restaurant: kitchen, furnishings, recipes and staff change operator, while the old operating company keeps everything else, including its debts.

The opposite is the share deal, in which the shareholders sell their shares. The asset deal is chosen above all for the sale of a business unit, for the handover of a sole proprietorship and for purchases out of insolvency. Buyers who want to avoid unknown risks of the company also prefer it. The basis is a company purchase agreement (asset purchase agreement), whose schedules identify each item that passes.

Individual transfer in an asset deal

In an asset deal, the principle of specificity (Bestimmtheitsgrundsatz) of property law applies, that is, of the rules on ownership of things and rights. Each item is transferred individually under the rules that apply to it (singular succession) and must be described in the contract so precisely that an outsider can allocate it. Movable assets are transferred by delivery of title, receivables are assigned. Land passes by an agreement declared before a notary (Auflassung) and entry in the land register. Trademarks, patents and domains follow their own rules, and licences often pass only with the licensor's consent. Catch-all clauses such as “all items serving the business” do not replace this list; they can fail for lack of specificity.

Contracts and consents

Contracts do not pass automatically. Taking over a contract requires the consent of the respective counterparty. The consents of the most important customers, landlords and licensors are therefore often made a condition of completion (closing conditions). For the remaining contracts, the parties generally treat each other as if the contract had passed. The seller remains the contracting party externally and passes on services and payments.

Employment relationships under Section 613a BGB

If a business or part of a business passes to a new owner by legal transaction, the new owner steps into the existing employment relationships by operation of law under Section 613a of the German Civil Code (BGB). The prerequisite is that an economic unit passes and essentially continues to exist with the acquirer. If only individual items are bought, such as software or a trademark without the associated team, there is generally no transfer of business. If there is one, the acquirer cannot select individual employees, and a dismissal because of the transfer is invalid.

The employees affected must be informed in text form before the transfer of the date, reason and consequences. They can object in writing within one month of receiving the information. Anyone who objects remains an employee of the seller.

Liability of the acquirer

The acquirer in principle assumes only the liabilities that the contract names. The law does, however, provide exceptions:

• Continuation of the business name (Section 25 of the German Commercial Code, HGB): the Firma is the name entered in the commercial register. Anyone who acquires a commercial business and continues it under the previous Firma is liable for all liabilities of the former owner established in the business. A contractual exclusion of liability is effective against creditors only if it is entered in the commercial register and published or communicated to the creditor.
• Business taxes (Section 75 of the German Fiscal Code, AO): anyone who acquires a company or a separately managed business as a whole is liable for taxes based on the business, such as VAT and trade tax, and for tax withholding amounts such as wage tax. Only taxes from the current and the preceding calendar year are covered, provided they are assessed or declared up to one year after the acquirer has notified the business. The liability is limited to the assets taken over and does not apply to an acquisition out of an insolvency estate.
• Employment relationships (Section 613a BGB): with the employment relationships, outstanding claims and accrued entitlements also pass, for example from occupational pension schemes. The seller also remains liable for claims that arose before the transfer and fall due within one year.

Contractually, indemnities from the seller, a retention on an escrow account and the review of taxes in due diligence cover these risks.

Taxes in an asset deal

The buyer's perspective

The buyer allocates the purchase price as acquisition cost to the economic assets acquired. Hidden reserves, that is, the difference between carrying amount and actual value, are thereby uncovered. The buyer can depreciate them, that is, spread them over the useful life as an expense that reduces profit. The part of the purchase price that exceeds the value of the individual economic assets is goodwill (goodwill). For tax purposes it is written down over 15 years (Section 7(1), sentence 3 of the German Income Tax Act, EStG). The allocation of the purchase price in the contract therefore has a direct tax effect, and the tax office checks it for plausibility. In a share purchase this effect does not arise, because a shareholding is not depreciated on a scheduled basis.

The seller's perspective

If a GmbH sells its business, it pays tax on the capital gain in full with corporate income tax (15% as at 2026), solidarity surcharge and trade tax, together around 30% depending on the municipality's multiplier. Only a distribution brings the proceeds to the shareholders and triggers a second taxation, in the case of private individuals in principle the flat-rate withholding tax. For a holding GmbH, dividends are 95% tax-exempt under Section 8b of the German Corporate Income Tax Act (KStG) if it held at least 10% at the start of the calendar year (15% for trade tax). The burden is then around 1.5%. For sole proprietorships and partnerships, the rules on the sale of a business under Section 16 EStG apply.

VAT and real estate transfer tax

The transfer of a company or a separately managed business as a whole is not subject to VAT (transfer of a business as a going concern, Section 1(1a) of the German VAT Act, UStG). Whether the conditions are met must be checked especially on the sale of a business unit; if they are not, VAT is charged on the purchase price. Real estate transfer tax is payable on land sold with the business, at a rate that depends on the federal state.

Form, purchase price and completion

An asset deal is in principle effective without any particular form, and in practice it is concluded in writing. It must be notarially recorded if land (Section 311b(1) BGB) or shares in subsidiaries (Section 15(4) GmbHG) are sold with it. If a company sells its entire assets, notarial recording is often chosen as a precaution because of Section 311b(3) BGB. Internally, the management regularly needs the consent of the shareholders' meeting for the sale of the essential business.

The purchase price calculation is simpler than in a share purchase. Bank balances and financial debts usually stay with the seller, so the price largely corresponds to the value of the business taken over, the enterprise value. The adjustment for debt and cash that is usual in a share deal (cash-free/debt-free) is limited to items taken over with the business, such as inventories, receivables, customer prepayments or pension entitlements.

Because consents, the informing of employees and the re-registration of registered rights run in parallel, completion often needs more lead time than a share purchase. On the agreed date, possession, benefits and burdens, that is, earnings and risks, pass to the buyer.

Worked example: asset deal and share deal compared for tax

A software GmbH that is wholly owned by a holding GmbH sells its entire business for EUR 6 million. For simplicity, an income tax burden of 30% (as at 2026) is assumed for both sides. The purchase price allocation:

• Property, plant and equipment: EUR 300,000 at a tax carrying amount of EUR 300,000
• Internally developed software: EUR 1,500,000 at a tax carrying amount of EUR 0, because self-created intangible economic assets may not be capitalised for tax purposes
• Goodwill as the remainder: 6,000,000 minus 300,000 minus 1,500,000 = EUR 4,200,000

Seller side:

• The GmbH's capital gain: 6,000,000 minus 300,000 carrying amount = EUR 5,700,000
• The GmbH's tax: 30% of 5,700,000 = EUR 1,710,000
• Remaining in the GmbH: 6,000,000 minus 1,710,000 = EUR 4,290,000
• Tax on distribution to the holding: 5% of 4,290,000 = EUR 214,500 taxable, on which 30% = EUR 64,350
• Arriving at the holding: 4,290,000 minus 64,350 = EUR 4,225,650

Buyer side:

• Depreciation of the software over an assumed useful life of five years: 1,500,000 / 5 = EUR 300,000 per year
• Depreciation of goodwill over 15 years: 4,200,000 / 15 = EUR 280,000 per year
• Tax saving over 15 years in total: 30% of 5,700,000 = EUR 1,710,000

The tax on the uncovered hidden reserves arises immediately for the seller, while the buyer recovers the same amount only over up to 15 years. Because corporate income tax falls gradually from 2028 to 10% in 2032, its saving is lower.

For comparison, the share deal: if the holding had sold all of the shares in the debt-free GmbH for EUR 6 million, a gain of EUR 5,975,000 would have arisen (acquisition cost EUR 25,000). Of this, only 5% would have been taxed at 30%, that is, EUR 89,625. EUR 5,910,375 would have arrived at the holding, around EUR 1.68 million more. This difference explains why sellers usually accept an asset deal only against a higher purchase price.

Distinction: asset deal, share deal and spin-off

• Share deal: the difference lies in the object of purchase. The shares are bought, the company continues to exist with all contracts, employment relationships and risks, and the assignment of GmbH shares must always be notarially recorded.
• Spin-off and hive-down: separation of a business unit into its own company under the German Transformation Act; the designated items pass as a package, often followed by a sale of shares.

Common mistakes

• Incomplete schedules. Items not listed do not pass. In technology companies, domains, software licences, access to cloud services and rights to code written by freelancers are often missing.
• Defective information under Section 613a BGB. Incomplete or incorrect information letters do not start the objection period running. Employees can then object long after the transfer and return to the seller.
• Purchase price allocation left open. Without a contractual allocation, the basis for depreciation and profit determination is missing.
• Residual GmbH not considered. If the selling company is liquidated after the sale, there is no solvent debtor for warranty claims unless security has been agreed.

Frequently asked questions

Which is better, an asset deal or a share deal?

That depends on the side. Buyers often prefer the asset deal because they can select assets and liabilities and depreciate the purchase price. Sellers who hold their shares through a holding company are usually better off for tax purposes with a share deal. The decisive factors are liability risks, tax consequences and the effort of individual transfer, often balanced through the price.

Does an asset deal need a notary?

Not in every case. Notarial recording is needed if land or GmbH shares are sold with it; for the sale of the entire assets it is chosen as a precaution. Otherwise a written contract is enough.

What is an asset deal in real estate?

The direct purchase of a plot of land or a building. The contract is notarially recorded, the buyer becomes the owner on re-registration in the land register, and real estate transfer tax is payable on the purchase price. In a share deal, the investor instead buys the company that owns the property; real estate transfer tax is then payable only if at least 90% of the shares pass.

Is an asset deal suitable for a purchase out of insolvency?

Yes, it is the usual form there (transferring restructuring). The insolvency administrator sells the business that can be continued, and the liabilities stay in the estate. Liability under Section 75 AO does not apply, and according to the prevailing view neither does that under Section 25 HGB. The employment relationships, by contrast, pass here too under Section 613a BGB; for claims from the period before the opening of the proceedings, however, the acquirer is liable only to a limited extent according to case law.

The Roemer Capital view

Whether a sale is implemented as an asset deal or a share deal, Roemer Capital clarifies with its clients before the first approach to buyers. Together with the client's tax advisers, it calculates both variants through to the shareholders' net proceeds, so that the gap is established as a figure before a buyer proposes a structure.

If an asset deal comes into consideration, for example in the sale of a business unit, Roemer Capital prepares the schedule of the contracts, rights and employees that pass early. With the law firm, it clarifies which consents must be in place before completion; the legal implementation rests with the law firm, and Roemer Capital helps negotiate the purchase price allocation.