By Bill Anderson, FCCA, Chief Executive Officer, Assetica — 2026-08-03
In an asset deal the buyer picks specific assets and liabilities; in a share deal the buyer takes over the whole legal entity, history and all. The two structures rarely produce the same tax outcome or the same net proceeds for the same underlying business, and choosing between them, or pricing the difference correctly, is one of the highest-stakes decisions in any sale or acquisition.
An asset deal transfers specific assets and named liabilities out of the seller's company; the seller's legal entity remains. A share deal transfers ownership of the company itself, so the buyer inherits the entire entity, including every historic liability, contract and licence, disclosed or not.
Buyers can select which assets and liabilities to assume, avoiding unknown historic risk, and asset purchases often create a fresh, higher tax base for depreciation and amortisation going forward.
Sellers typically face a single layer of tax on a share sale, often at a capital gains rate, rather than corporate tax on the gain followed by a further tax on extracting proceeds. The exit is also cleaner, with no need to reassign contracts and licences one by one.
A share deal buyer inherits every liability the company has ever incurred, known or not, which is why share purchase agreements rely on extensive warranties and indemnities. An asset deal buyer generally only assumes the specific liabilities named in the agreement.
Because tax and risk allocation differ materially between the two structures, buyers and sellers frequently adjust the headline price to compensate whichever party the chosen structure disadvantages, so the same business can carry a different agreed price depending on the route used.
What is the main difference between an asset deal and a share deal?
An asset deal transfers specific assets and named liabilities to the buyer while the seller's legal entity remains. A share deal transfers ownership of the company itself, so the buyer inherits the entire entity, including every historic liability, contract and licence.
Which structure is better for the buyer?
Buyers generally prefer asset deals because they can select which assets and liabilities to assume and often secure a fresh, higher tax base for depreciation. Where licences cannot be reassigned, a share deal may be the buyer's only practical option.
Which structure is better for the seller?
Sellers generally prefer share deals because they typically face a single layer of tax on the sale rather than corporate tax on the gain followed by a further tax on extraction, and the exit is cleaner.
Does the structure change the price of the business?
Yes, often. Because tax and risk allocation differ materially between the two structures, buyers and sellers frequently adjust the headline price to compensate whichever party the chosen structure disadvantages.
Can a trading licence be transferred in an asset deal in the UAE?
Generally not directly. UAE trading licences are usually tied to the legal entity that holds them, so an asset deal buyer typically needs to obtain its own licence, whereas a share deal transfers the existing licensed entity and its licence intact.
Why do buyers ask for warranties and indemnities mainly in share deals?
Because a share deal buyer inherits the whole company's history, warranties and indemnities are the buyer's main contractual protection against liabilities that existed before completion but had not yet surfaced.