Company acquisitions are part of the day-to-day business of corporate law advice. Two forms of structuring dominate practice: asset deals and share deals. Both are established, but differ considerably in their legal structure, risk distribution and tax effects.
While the share deal is aimed at the transfer of company shares, the asset deal concerns the selective transfer of individual assets. For buyers and sellers, the choice of structure is not a mere formality, but strategically important – both in terms of transaction security as well as liability, financing and tax optimization.
This article highlights the differences between the two models, with a particular focus on an often overlooked but practically relevant provision: § 311b para. 3 BGBwhich also requires notarization for asset deals in certain constellations.
Basics: Asset deal vs. share deal
Share Deal
In a share deal, shares in a corporation or partnership are transferred – usually GmbH shares (Section 15 (1), (3) GmbHG) or shares (Section 67 AktG). The acquirer assumes the legal status of the shareholder and thus takes over the company in its entirety – including all assets and liabilities, contracts, employees and potential inherited liabilities.
Advantages:
- Simple transferability through a single legal act
- Maintaining existing contractual relationships and licenses
- Fast implementation (with clear ownership structure)
Risks:
- Assumption of all liabilities
- Possible tax burdens for the seller
- Notarial form is mandatory (Section 15 (3) GmbHG)
Asset Deal
The asset deal leads to singular succession. The object is individual assets or entire business operations, e.g. machines, customer contracts, inventories or intangible rights. The operational shell (e.g. the GmbH as a legal entity) remains in place, it is merely “cannibalized”.
Advantages:
- Selective acquisition: targeted exclusion of risks and liabilities
- Better tax structuring options
- No direct acquisition of shares
Risks:
- Individual transfer of each asset required (third party consent if necessary)
- Complexity of the transaction structure
- Possible consent of the works council in the event of a transfer of business (Section 613a BGB)
Important: While the share deal always requires notarization, this is only exceptionally the case with the asset deal – but it is precisely this exception that is important.
Notarization for asset deals – focus on section 311b (3) BGB
What does Section 311b (3) BGB regulate?
“If an entrepreneur undertakes to sell all of his current assets, the contract must be notarized.
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The purpose of the standard is to protect the seller: the complete sale of his assets should not be made lightly and without legal control. Notarization serves not only as a formal requirement, but also as a legal clarification and safeguard.
When is an asset deal affected by the notarization requirement?
The notarization requirement does not apply if the economic effect is equivalent to the sale of a company. The decisive factor is whether the seller expressly undertakes to transfer all of his assets.
Indications of the obligation to notarize:
- Catch-all clauses such as: “The seller transfers all assets owned, whether listed or not.”
- Disposal without explicit restriction to individual assets
- Lack of an asset reserve or intention to continue as a going concern
However, notarization is not required:
- The transfer of expressly designated individual items (even if they in fact make up the entire assets)
- The sale of a clearly defined business area
- The sale of a certain fraction or percentage share, unless the entire assets are involved
Examples from practice
- ✅ Not subject to notarization: A company sells all machines, patents and trademark rights – but only if these are listed in Annex 1. No “catch-all” clause.
- ❌ Requires notarization: “All assets and receivables belonging to the seller are sold.” No restriction, comprehensive transfer of assets – Section 311b (3) BGB applies.
Legal consequences of a breach of form
If a contract requiring notarization pursuant to Section 311b (3) BGB is concluded without notarization, it is null and void (Section 125 BGB).
In practice, this can lead to considerable reversal and liability risks:
- No effective transfer of ownership
- Reclaiming the assets already transferred
- Reversal of purchase price payments
- Liability of the advisor for lack of information
Strategic tips for drafting contracts
- No blanket clauses: avoid indefinite formulations (“all assets”)
- Exact list of the assets to be transferred in the notes
- Definition of a residual asset or continuation purpose for demarcation purposes
- Clarify in the contract that no complete divestment is intended
- Preparation of an asset overview to document the remaining assets
Conclusion: Notarization in asset deals – often overlooked, but highly relevant from a legal perspective
Drafting contracts for company acquisitions requires care – not only in terms of content, but also form. § 311b para. Section 3 of the German Civil Code (BGB) is a little-noticed but potentially serious standard: a supposedly simple asset deal can quickly lead to formal nullity if the wording of the contract is unclear.
If you want to act with legal certainty, you should:
- Specify contractual objects precisely
- Do not use general clauses
- always check (or have checked) whether a notarization obligation exists
The extra effort is worth it – because in many cases it is not possible to cure an invalid contract retrospectively.