Depending on the above-mentioned points that are agreed between the parties, the relevant issues must be clearly reflected in the share sale contract. In the event of a sale of shares, the buyer acquires shares in the company and not just the assets. The buyer buys the company – a separate legal entity. As a general rule, the entity retains its assets and liabilities. The transaction will take place between the shareholders of the company and the purchaser of the shares. All operating assets remain in the hands of the company. It is the composition of the company`s ownership that changes. The acquisition of assets does not apply to a tax treatment as a tax-exempt reorganization. Acquisitions can be structured either as an asset transaction or in shares. In the case of an asset transactionAssetAn asset agreement is entered into when a buyer is interested in buying the operating assets of a business instead of shares. This is a kind of M&A transaction.

Legally, an asset agreement is a transfer of a business that does not take the form of an acquisition of shares. A large number of issues need to be taken into account, as the transaction is in fact the sum of the sales of each asset and the assumption of the agreed commitments. In order to prevent the seller and the management of the target company from harming the target company, a buyer will generally use pre-closing covenants to prohibit the target entity, its shareholders, directors and management: the conclusion of an M&A transaction generally makes a successful DD investigation and the underlying provision of complete and accurate documents a critical condition for the conclusion of the acquisition. Now, data spaces are usually digital and law firms and other third parties offer internal server-based or cloud-based platforms, on which all DD documents are uploaded by the seller and its advisors for compilation and consultation by a buyer and its professional advisors (usually lawyers and accountants) where possible…