In a share purchase, you buy the company itself, including everything in it: its assets, contracts, staff and all its liabilities, known and unknown. In an asset purchase, you buy selected parts of the business, such as its goodwill, equipment, stock and premises, and choose which liabilities to take on.
Share purchase
- Everything comes with it, including past liabilities, so due diligence and the seller's warranties matter more. See What due diligence will a lender expect when I buy a business?.
- Contracts usually carry on, though some include change-of-control clauses.
- Staff stay employed by the same company, so TUPE generally doesn't apply.
- Stamp duty on shares is usually due. Property owned by the company isn't separately taxed.
Asset purchase
- You choose what you buy and leave behind liabilities you don't want.
- Contracts and leases may need transferring, which can need the other party's or the landlord's consent.
- Staff usually transfer to you under TUPE on their existing terms. See Does TUPE apply when I buy a business?.
- Property can bring stamp duty land tax, and VAT can apply unless the sale is a transfer of a going concern.
Which do lenders prefer?
It depends on the deal. Lenders look at what security is available, which liabilities come with it, and how cleanly the business can carry on trading.
Get advice
The choice affects tax for both you and the seller. Speak to your solicitor and accountant before agreeing the structure.
Last reviewed: 8 October 2026