Share Deal

What is a share deal?

Share deal (German: Anteilskauf) refers to a company acquisition in which the buyer takes over the shares in the company that owns the business, in the case of a GmbH (German limited liability company) the company shares (Geschäftsanteile). The sellers are the shareholders, not the company. The company itself remains unchanged as a contracting party, employer and debtor, with all its contracts, permits, liabilities and risks; only its owner changes. This resembles buying a locked suitcase together with its contents: the buyer receives everything inside, including what cannot be seen. For that reason the buyer carries out a thorough review beforehand, and the seller stands behind the contents with warranties.

For growth companies, the share deal is the usual form of company sale, whether to a strategic buyer in a trade sale or to a financial investor. The basis is a notarially certified share purchase agreement, which governs the object of the sale, the purchase price mechanism, warranties, indemnities and closing conditions. The counterpart is the asset deal, in which the company sells individual assets.

The share deal for a GmbH: legal framework

Notarial certification and shareholder list

The contract that obliges a party to assign shares in a GmbH, and the assignment itself, require notarial certification (Section 15(3) and (4) of the German Limited Liability Companies Act, GmbHG). The entire contract is certified, including all annexes to which it refers in substance. This determines the timetable, because the drafts must be fully negotiated before the appointment and the notary in principle reads the contract aloud. Extensive annexes, such as the disclosure schedules in which the seller lists known deviations from the warranties, are often incorporated by way of a reference deed certified in advance.

Once the assignment takes effect, the notary involved files a new shareholder list with the commercial register (Section 40(2) GmbHG). Vis-à-vis the company, only a person entered in the list held on the commercial register is regarded as a shareholder (Section 16(1) GmbHG). Many articles of association make an assignment subject to consent, for example of the shareholders' meeting (transfer restriction, Vinkulierung, Section 15(5) GmbHG). Shareholders' agreements often provide for rights of first refusal, under which the other shareholders may buy first, and tag-along rights, under which minority shareholders may sell on the same terms. Conversely, a drag-along obligation (drag-along) allows a majority to require the remaining shareholders to sell on the same terms.

What passes with the company

Because the company remains the same contracting party, contracts continue without the consent of the counterparties. Employment relationships are unaffected because the employer remains the same. Exceptions arise from change of control clauses (change of control), which give counterparties a right of termination or adjustment on a change of owner. They are often found in licence, distribution, financing and major customer contracts and are specifically searched for in due diligence, the review of the company before the purchase. At the same time, the buyer economically assumes all legacy risks of the company, including unknown ones.

Purchase price, warranties and indemnities

Shares are sold, so what is paid is the equity value (equity value), the value that accrues to the shareholders after deducting debt. The usual starting point is the value of the operating business (enterprise value), negotiated on the assumption that the company is transferred free of cash and financial debt (cash-free/debt-free). Financial liabilities and debt-like items are deducted from this, and cash is added. The purchase price mechanism determines the reference date for this bridge. Either a fixed price applies on the basis of a balance sheet drawn up before signing (locked box), or the price is adjusted on the basis of accounts at closing (completion accounts).

Because the buyer takes over the company with its past, the buyer demands warranties concerning corporate matters, financial statements, material contracts, intellectual property rights, employment law, taxes and litigation. They are formulated as independent guarantee promises (selbständige Garantieversprechen), that is, as separate undertakings whose conditions and consequences the contract regulates exhaustively; the statutory warranty law is largely excluded. Deductibles, liability caps, limitation periods and the question of whether the buyer's prior knowledge excludes its claims are set out in the contract. For known risks, above all taxes for periods before the reference date, the parties agree indemnities that apply irrespective of a breach of warranty. They are secured by a retention, an escrow account or a warranty and indemnity insurance.

Taxes in a share deal

Seller

How the capital gain on disposal is taxed depends on who holds the shares:

• Individual holding at least 1%: If the seller held an interest of at least 1% within the last five years, Section 17 of the German Income Tax Act (Einkommensteuergesetz, EStG) applies with the partial income method (Teileinkünfteverfahren). Under it, 60% of the gain is taxed at the personal tax rate. At the top rate of 45%, including the solidarity surcharge, this amounts to an effective rate of just under 28.5%.
• Individual holding less than 1%: The gain is investment income and is subject to the flat-rate withholding tax (Abgeltungsteuer) of 25% plus solidarity surcharge.
• Corporation, such as a holding GmbH: Under Section 8b(2) of the German Corporation Tax Act (Körperschaftsteuergesetz, KStG) the gain is tax-exempt, but 5% is treated as non-deductible business expenses. The effective burden is around 1.5% (as at 2026).

The holding structure brings about a deferral, not a final exemption: if the holding distributes the proceeds, they are taxed at shareholder level. If the holding is created only shortly before the sale by a contribution of the shares, a lock-up period of seven years applies. If the holding sells the shares during this period, the hidden reserves at the time of the contribution (the difference between the book value and the then value of the shares) are retroactively taxed at shareholder level. The amount falls by one seventh with each year that has elapsed (Section 22(2) of the German Reorganisation Tax Act, Umwandlungssteuergesetz, UmwStG).

Buyer

The buyer capitalises the shareholding at its acquisition cost. There is no scheduled depreciation, and the hidden reserves in the company are not uncovered. If the buyer is a corporation, write-downs to a lower value of the shareholding (Teilwertabschreibungen) and disposal losses also remain disregarded for tax purposes under Section 8b(3) KStG. This disadvantage compared with the asset deal feeds into the purchase price negotiation.

Tax loss carry-forwards and real estate transfer tax

Tax loss carry-forwards are tax losses of earlier years that may be offset against future profits. If more than 50% of the shares pass to one buyer within five years, they lapse in principle entirely under Section 8c KStG; the same applies correspondingly to trade tax. Exceptions apply to transfers within a group (group clause) and to the extent that the losses are covered by taxable hidden reserves of the company (hidden reserves clause). Under narrow conditions, the loss carry-forward is retained on application under Section 8d KStG if the business operations are continued unchanged.

If the company holds real estate, that is, its own land or buildings, real estate transfer tax (Grunderwerbsteuer) is payable when at least 90% of the shares come into the hands of one buyer. For corporations, it is also sufficient that at least 90% of the shares pass to new shareholders within ten years. Rented office space does not count as real estate.

Worked example: share deal with an individual and a holding

Two founders each hold 50% of a GmbH with share capital of EUR 25,000. Founder A holds the interest privately, Founder B through a holding GmbH. A buyer acquires all shares on the basis of an enterprise value of EUR 11 million. Net financial debt, that is, financial debt less cash, amounts to EUR 1 million. For A, the calculation is simplified using the top tax rate of 45% plus a 5.5% solidarity surcharge, for the holding using 30% income taxes (as at 2026). Church tax and transaction costs are disregarded.

• Purchase price for all shares: 11,000,000 minus 1,000,000 = EUR 10,000,000, or EUR 5,000,000 per founder
• Capital gain per founder: 5,000,000 minus EUR 12,500 acquisition cost = EUR 4,987,500
• Founder A: 60% of 4,987,500 = EUR 2,992,500 taxable; tax rate 45% × 1.055 = 47.475%; tax 2,992,500 × 47.475% = EUR 1,420,689 (rounded)
• Net proceeds of A: 5,000,000 minus 1,420,689 = EUR 3,579,311, an effective burden on the gain of around 28.5%
• Holding of B: 5% of 4,987,500 = EUR 249,375 taxable; tax at 30% = EUR 74,812.50
• Net proceeds of the holding: 5,000,000 minus 74,812.50 = EUR 4,925,187.50
• Difference: 4,925,187.50 minus 3,579,311 = around EUR 1.35 million in favour of the holding, as long as the proceeds stay there

If the holding distributes the entire amount to B, flat-rate withholding tax of 26.375% including solidarity surcharge is payable on it, around EUR 1,299,018. B is then left with around EUR 3,626,169, barely more than A. The advantage of the holding therefore lies mainly in the fact that the proceeds can be reinvested without taxation at shareholder level.

Distinctions: share deal, asset deal, secondary sale and merger

• Asset deal: The seller is the company, and the object of the sale is individual assets. The differences follow from this: contracts require the consent of the counterparties, the buyer can depreciate the hidden reserves that are uncovered, and the gain is initially taxed in full in the company.
• Secondary sale: Sale of individual shares without a change of control, often to new or existing investors as part of a financing round.
• Capital increase: New shares are created, and the money flows into the company rather than to the shareholders.
• Merger (Verschmelzung): The target company ceases to exist, its assets pass to the acquiring company, and its shareholders receive new shares there instead of a purchase price.

Common mistakes

• Scope of certification underestimated. Ancillary agreements that are not certified together with the contract make the obligation formally invalid. The defect is cured only by the certified assignment.
• Change of control clauses not identified in advance. If the buyer finds them only in due diligence, it uses them as an argument for price reductions or additional closing conditions.
• Holding established too late. A contribution shortly before the sale triggers a proportionate retroactive taxation within the seven-year lock-up period.
• Loss carry-forwards included in the purchase price. After a majority acquisition they generally lapse and have no value for the buyer.
• Consent requirements overlooked. Transfer restrictions, rights of first refusal and investor consents must be satisfied or waived before closing.

Frequently asked questions

Is a share deal a transfer of business?

No. The employer remains the GmbH, the employment contracts continue unchanged, and Section 613a of the German Civil Code (BGB) does not apply. Participation programmes are settled, transferred or terminated in accordance with their plan terms.

Does every shareholder have to consent to the sale?

Not to the sale of other people's shares, but to the sale of their own. Without a contractual drag-along obligation, nobody can be compelled to sell; buyers who wish to acquire all shares therefore rely on a drag-along clause. If the articles of association provide for a transfer restriction, the shareholders or bodies named there must also consent to the assignment.

How long does a share deal take?

The entire sale process often takes 6 to 12 months, of which the negotiation of the share purchase agreement takes several weeks. Between signing and closing, the decisive factor is mainly whether merger control, investment screening or third-party consents have to be awaited.

What is a share deal in real estate?

The purchase of the company that owns a plot of land or a building, rather than the property itself. The company remains the owner, and the land register is not amended. Real estate transfer tax is payable only if the 90% thresholds are reached; on a direct purchase of the property in an asset deal it is always payable.

Does a buyer pay less in a share deal than in an asset deal?

Not necessarily. From the buyer's perspective, the lack of depreciation and the legacy risks assumed argue for a discount, while the seller saves considerable tax. Where the price settles is a matter of negotiation.

The Roemer Capital view

In our sale mandates, the share deal is the rule, and the preparation aims to ensure that a buyer finds no reason for a change of structure. This includes a complete list of contracts with change of control clauses, a cleaned-up shareholder list and a data room that is ready within 24 hours.

For the purchase price negotiation, we build the bridge from enterprise value to equity value with all debt-like items. With the client's tax adviser, we clarify how the holding, lock-up periods and loss carry-forwards are to be assessed. The law firm is responsible for the certification, the warranty catalogue and the indemnities; we negotiate their economic effect alongside.