M&A – Main differences between Share Deals and Asset Deals in Austria

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What are the main features of a share transfer agreement in Austria?

Share deal and asset deal are two different ways by which a company can be transferred to a new owner.

Object of purchase - purchase of shares of a company

A share deal is the acquisition of a company or a share of it through the purchase of shares. Either all shares in a limited liability company or stock corporation or only part of them are acquired, hence a majority or minority thereof. The purpose of this kind of transaction is the purchase of the company’s shares, but not its assets.

The share deal does not change the legal entity of the company: the purchaser merely moves into the position of the previous shareholders and gains influence on the formation of the will of the entity. This means that only the shareholder structure changes. The company remains with its previous company name.

Externally, the company, which is known on the market, remains unaffected and the completed share deal is often not even noticed, unless you have a look into the commercial register that is open to the public.

Contract partner

The contract partner of the acquirer is not the company, being the subject of the share deal, but the individual shareholders, since in a share deal the shareholders sell their shareholdings.


In the case of corporate legal entities (GmbH/AG) the acquirer of the shares is generally not liable for potential debts of the withdrawing shareholder(s), because only the corporate assets are liable for its debts.

In the case of partnerships (= a non-corporate legal entity), however, the newly joining partner is personally liable as a general partner in a general partnership (Offene Gesellschaft=OG), or up to the capital paid into the company in a limited partnership (Kommanditgesellschaft=KG).

In the case of a sole proprietorship (Einzelunternehmer) the company owner is a natural person. Hence, the company is not operated in the form of a corporate legal entity such as a GmbH or AG (stock company) nor as a general partnership (Offene Gesellschaft=OG) nor as a limited partnership (Kommanditgesellschaft=KG). A share deal is not possible since the sole proprietorship is not a legal entity and therefore no company shares exist. Only an asset deal can be considered (see under 2).

What are the main features of an asset transfer agreement in Austria?

Object of purchase - purchase of a company

The asset deal is a form of business transfer in which the buyer acquires the individual assets of the business, but not its shares. The company is transferred in its entirety, but the individual legal positions and its assets must be transferred individually. Thus, we talk about an asset deal if individual assets are acquired - such as construction and raw materials, contractual relationships, etc.

Contract partner

The contract partner of the acquirer is the company itself as a legal entity and not the individual shareholders.


The liability of the acquirer for liabilities of the acquired company is regulated as follows: to ensure that the transfer of the business does not result in disadvantages for the creditors and contractual partners, liability is both on the transferor and the transferee (acquirer).

Liability of the acquirer

Unless the seller and acquirer have agreed otherwise, the latter is liable for the assumed debts that arose prior to the time of the transfer of the business. Whether the business will continue to run after the acquisition or be run with a different name is not important for the liability.

However, the seller and the acquirer (transferor and transferee) may also agree that the acquirer will not assume the debts. Even if the parties have agreed that certain debts will not be assumed, the acquirer is still liable unless the seller and the acquirer explicitly agree on an exclusion of liability. Liability can therefore only be excluded if the exclusion of liability is made public by entry in the company register or by a notice to creditors or announcement in the official gazette of the Wiener Zeitung.

There is a mandatory liability provision that must not be excluded: the acquirer shall continue to be liable alongside the seller (transferor) for the debts of which he knew or ought to have known, but only up to the amount of the active (fixed assets) taken over (the break-up value is relevant here). This means that liability of the purchaser remains despite an exclusion of liability.

In any case, the acquirer is liable for debts incurred after the transfer.

Liability of the seller

Unless otherwise agreed the seller (transferor) continues to be liable for the old debts, those that arose prior to the transfer of the business, even if they had been assumed by the byer (transferee). However, this liability is limited in time: the transferor is only liable for old debts that fall due before the expiry of five years after the transfer of the business.

How to transfer the shares of a company in Austria?

Free transferability of shares

The shares of corporate legal entities are freely transferable and inheritable.

This is a characteristic of corporate legal entities, like GmbH (company with limited liability) or AG (stock companies).

With non corporate legal entities a shareholder may only dispose of his share in the company, hence the transfer of shares if the free transferability is provided in the articles of association. That means: if a share is to be transferred, all shareholders must agree.

The transfer of the business share does not affect the existence of the company and no amendment to the articles of association is required (the articles of association do not need to be amended).

Restrictions on transfer

The articles of association may provide for restrictions on transfer, but a general exclusion of transfer is not permitted.

However, in most articles of association, reservations of consent (restrictions on transfer) and pre-emptive rights of the other partners are agreed upon.

If, despite a restriction under company law, the business share is transferred contrary to these, the transfer is invalid.

  • Restriction on transferability (“Vinkulierung”). This means that the transfer of the share is subject to the consent of the other shareholders. The purpose of this to prevent disagreeable persons from joining the company. Unless otherwise stipulated in the articles of association this requires the consent of all shareholders by a resolution adopted at the general meeting = shareholders' meeting.
  • Pre-acquisition rights. If pre-acquisition rights have been agreed in the articles of association, then there is an obligation on the part of the shareholder to offer the shares to that very person to conclude the purchase agreement with the pre-acquisition beneficiary. In case this person does not exercise his or her pre-acquisition rights, the shareholder willing to sell the shares is free to sell it to third parties.

Formal requirements for the transfer of shares

The transfer of a share can only be made in the form of a notarial deed. This means that the contract on the transfer of the share, which can be prepared by a lawyer, qualified in Austria (Rechtsanwalt), must be signed by the parties in the presence of a notary. The personal presence of shareholders and the notary public is not required if a third person (lawyer) is given a special power of attorney. The notarial act can also be concluded with the notary via video conference.

The change of shareholder must then be made public in the commercial register: only the person who appears in the commercial register is deemed to be a shareholder.

Inheritance of a share

Shares can also be inherited: in the case of inheritance these initially fall to the estate (Nachlass). The shares are transferred to the heir by universal legal succession, hence the entire assets are acquired, when the deceased's estate is legally inherited (transfer of the deceased's estate to the heir). No further legal act is needed. The heir must then be registered in the commercial register as a new shareholder.

Yet, the articles of association may provide for further arrangements, such as a pre-acquisition right for the other shareholders against an heir in the event one shareholder passes away.

How to transfer the assets/business of a company in Austria?

An asset deal is quite complex as each individual asset of the company must be transferred. It is therefore necessary to specifically designate each individual asset that is to be sold in the purchase agreement. It is advisable to make a precise and clear list of all the assets that are to be transferred, so as not to forget any assets that are to be transferred to the purchaser.

Thus, the business is not transferred in "one act" (as it is with an inheritance), but must be transferred in detail, except for contractual relations:

  • transfer of property/real estate: if property is to be transferred, the provisions of property law must be observed. The transfer requires a purchase agreement and the transfer of the object of purchase or, in the case of real estate, the entry in the real estate register/land register;
  • intangible property rights: intellectual property rights, like patents, trademarks, or copyrights, are transferred in accordance with the provisions of intellectual property law;
  • contractual relationships: when a company is purchased, the rights and duties arising from the contractual relationship of the company with third parties are transferred to the purchaser. However, third parties (creditors) may object to the transfer of contracts within three months of the announcement of the transfer - in that case, the contracts with the seller remain in force. If third parties object to the transfer of the contract, the contract must be terminated within the deadlines and at the respective times set out in the contract or the laws.

What are the transfer taxes for a share deal in Austria?

The proceeds from the sale of shares are taxable and are included in income from capital assets (Einkünfte aus Kapitalvermögen).

Shareholders who sell their shares are therefore liable to tax on the resulting profit.

The profit is the difference between the proceeds of the sale and the acquisition costs (costs of acquiring the share).

The profit from a share sale is subject to a tax rate of 27.5% by way of capital gains tax: a third party withholds the tax when paying out the amount of money for the recipient and transfers it to the tax authorities.

What are the transfer taxes for an asset deal in Austria?

The profit obtained from the sale of a business is subject to tax.

However, there are tax benefits when selling the entire business:

Distribution of the profit over three years

The profit from the sale can be distributed over three years upon request if the business has existed for at least seven years since its opening.

This reduces the annual tax rate.

Half tax rate for the profit

If the business has existed for seven years and is sold because the taxpayer has died, can no longer continue the business, or has reached the age of 60, the tax rate is reduced to half of the average tax rate.

Tax allowance of € 7.300,00

The tax allowance can be claimed only if the above-mentioned benefits do not apply.

The profit is taxable only to the extent that it exceeds the allowance.

Crediting of real estate transfer tax

If the company was acquired free of charge (e.g., donation), if real estate belongs to the company and real estate transfer tax has been incurred on the real estate, transfer tax attributable to the hidden reserves (increases in value that do not appear in the balance sheet) can be credited against the income tax in the event of a subsequent sale.

Place of residence exemption

If the taxpayer has his main place of residence in the business premises of the company, then in the event of the abandonment of the business, the hidden reserves remain tax-free under certain conditions.

The amount of the profit is the difference between the business assets at book value and the profit from the sale (plus the debts assumed by the buyer).

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