Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Share purchase definition

What does Share purchase mean? A share purchase is the acquisition of shares in a target company—typically all, or a controlling stake—so the buyer becomes the shareholder exercising control while the company continues to own its business. Because the company remains the legal owner of its assets and bearer of its obligations, the buyer effectively inherits the company with all assets, contracts and liabilities (including unknown or contingent liabilities), managed through due diligence, warranties, indemnities and price adjustments. Used across private M&A, it is usually documented by a share purchase agreement (SPA) and completed by share transfers and corporate approvals, with any required...

UK Asset Purchases: Legal Framework, Deal Stages, Due Diligence, Consents, Tax/VAT and Land Transaction Taxes, TUPE, Key Documents and Completion

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Practice notes

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There are two principal routes to acquire a business: buying its assets or buying its shares. These approaches are intrinsically distinct and call for markedly different procedures and paperwork.

Nature of the transaction

Why an asset purchase?

Through an asset deal, the buyer selects only the assets and specific Liabilities it wants and explicitly agrees to take on. On completion, title to those assets and responsibility for those assumed liabilities pass to the buyer, while any unwanted assets and, crucially, liabilities remain with the seller. This gives the purchaser significant flexibility to cherry-pick and largely sidestep the danger of inheriting liabilities it does not want.

By contrast, a share deal transfers Ownership of the company that operates the target business. Except where the company’s contracts contain ‘Change of control’ clauses, its entire undertaking - assets, agreements, rights and obligations - stays with the company, allowing it to trade on with little disruption from the share transfer. However, the purchaser also takes on, albeit indirectly, all of the target’s assets and liabilities, whether apparent or hidden...

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Web page updated on 27/05/2026

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