Jurisdiction(s):
United Kingdom

Key definition

Shares definition

What does Shares mean? In company law practice, a share is a unit of a member’s interest in a company, carrying the rights and obligations attached to its class (for example, voting, dividends and return of capital on a winding up). The Companies Act 2006 simply states that a share is a share in a company’s share capital; the Irish Companies Act 2014 adopts a broadly equivalent approach. Usage and effect are consistent across England & Wales, Scotland, Northern Ireland and Ireland. A company’s share capital comprises the number of shares it allots and issues to investors on or after incorporation. Those...

UK tax in asset versus share sales: VAT/TOGC, stamp taxes (SDLT/LBTT/LTT), capital allowances, loss restrictions, substantial shareholdings exemption, business asset disposal relief, and pre-transaction reorganisations

Published by a LexisNexis Tax expert

Practice notes

The sale of a company's business can be structured as either:

a disposal of assets held by the company (an asset sale), or
a disposal of Shares in the company by its shareholders (a share sale)

In an asset sale, the buyer (or, where appropriate, the seller) can select which assets and Liabilities, and which parts of the target business, it takes on (or, in the seller’s case, only parts it disposes of). This lets parties choose what to include and exclude, tailoring the transfer to parts they wish to trade. In a share sale, the buyer assumes Ownership of the company that owns and operates the target business. The company keeps its assets (and liabilities) and continues to run the business under the buyer’s ownership. Buyers generally favour purchasing assets to avoid inheriting unknown and potentially unquantifiable company liabilities in practice. Sellers usually favour a sale of shares, allowing a Clean break from the company and its business...

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Web page updated on 21/05/2026

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