Share sale or asset sale
A share sale transfers the company itself: every contract, employee, debt and skeleton comes with it, which is why buyers respond with heavy warranties and indemnities. An asset sale lets the buyer pick assets and leave liabilities — but each contract may need consent to transfer, employees transfer with statutory protection under the transfer-of-undertakings regime, and the tax outcomes for the seller can differ sharply. Structure is a commercial, tax and legal decision taken once, at the start, with advice on all three.
The anatomy of the agreement
- Price and adjustment — fixed, completion accounts, or locked-box; plus earn-outs where price depends on future performance (draft the metrics like the litigation clauses they are)
- Warranties — the seller's statements about the business: accounts, tax, contracts, employees, litigation. For buyers, the diligence net; for sellers, the exposure
- Disclosure — the seller's safety valve: what's fairly disclosed against a warranty can't found a claim, which is why the disclosure letter deserves the same care as the agreement
- Limitations — caps, thresholds, and time limits on warranty claims: the seller's liability architecture
- Specific indemnities — euro-for-euro cover for identified risks diligence found (tax, a live dispute, an environmental issue)
- Restrictive covenants — the seller's non-compete, enforceable more broadly in this context than any other
- Completion mechanics — conditions, what happens between exchange and completion, and who controls the business meanwhile
For sellers: prepare before the buyer arrives
The best warranty position is a clean company: contracts written and assignable, the shareholders' agreement aligned so minority holders can't hold up the sale, disputes resolved, and the data room built before diligence starts. Sale preparation done a year early routinely pays for itself several times over in price and speed — and in the warranties you can give without flinching.
How our fees work
You get a fixed quote in writing before any work starts — no hourly-rate surprises and no meter running while you think. If the scope changes, the quote is revised in writing before we continue. In contentious business, a solicitor may not calculate fees or other charges as a percentage or proportion of any award or settlement. How contract solicitor fees work in Ireland →
Frequently asked questions
What are warranties in a business sale?
Contractual statements of fact about the business — if untrue and not disclosed against, the buyer can claim damages for the difference in value. They are the mechanism that converts diligence findings and seller's knowledge into price and risk allocation.
How long is a seller on the hook after completion?
Whatever the agreement says: commonly a negotiated period of one to three years for general warranties, longer for tax. Unlimited exposure is neither standard nor necessary — the limitations schedule is where sellers earn their sleep.
Do employees transfer when a business is sold?
On an asset sale of a business as a going concern, employees generally transfer automatically with protected terms under the European Communities transfer of undertakings regulations — dismissals connected to the transfer are restricted. On a share sale nothing changes: the employer company is the same. Factor it into structure early.
Talk to a solicitor who reads contracts for a living. Call Mary Molloy Solicitors today.
Whether you are drafting terms for your business, handed a contract to sign, or unsure what a clause commits you to, an early conversation costs little and prevents a lot.
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