Insights

When selling or buying a business in Western Australia, one of the first decisions you’ll face is whether to structure the deal as a share sale or an asset sale. While both options transfer business value, they differ in legal risk, tax outcomes, and how the transaction is handled. Choosing the right structure and getting the agreement right is essential to protect your interests.

At West Perth Legal, we help business owners, professionals, and investors navigate this decision with confidence. Whether you’re selling a café, acquiring a medical practice, or investing in a tech firm, we’ll help you choose the right path and draft the right documents.

What Is an Asset Sale?

In an asset sale, the buyer purchases the business, including plant and equipment, stock, goodwill and takes assignment of contracts and the lease, but not the company itself. The seller keeps the legal entity.

This is common for small businesses in retail, hospitality, trades, and services. It’s flexible and allows the buyer to purchase the assets without taking on the liabilities.

Key points:

• Buyer purchases assets of the business
• Seller keeps the company
• Liabilities usually stay with the seller
• Employees may need new contracts
• Assignment of leases, licences and contracts may need landlord or third-party consent

Asset sale can often be finalised through a professionally drafted Business Sale Agreement. Learn more about our Business Sale Agreement drafting services.

What Is a Share Sale?

In a share sale, the buyer purchases the company’s shares. This means they take over the entire business entity, including its assets, liabilities, contracts, employees, and history.

This structure may suit professional practices, medical clinics, tech companies, and businesses with valuable contracts or licences tied to the company.

Key points:

• Buyer takes over the whole company
• Liabilities (known and unknown) “transfer” to the buyer
• Contracts and licences stay in place
• Employees remain employed
• More due diligence is required

Explore our Share Sale Agreement services with an experienced share sale agreement lawyer in Perth.

Key Legal Differences

Here’s how asset sales and share sales compare across key areas:

Legal Area	Asset Sale	Share Sale
Liabilities	Stay with seller (unless agreed)	“Transfer” to buyer
Contracts	May need consent to assign	Stay with company
Employees	Must be re-hired or paid out	Continue automatically
Licences	May need transfer or re-application	Stay with company
Tax	GST, CGT, duty vary by asset class	Different CGT and duty implications
Due Diligence	Focused on assets and contracts	Full company review required

Not sure which one suits you? Speak to a commercial lawyer in Perth.

Which Structure Is Better?

There’s no one-size-fits-all answer. It depends on your goals, risk tolerance, and the nature of the business.

Sellers may prefer share sales because they:

• Transfer all liabilities
• May get better tax outcomes
• Achieve a cleaner exit

Buyers may prefer asset sales because they:

• Take over assets but not liabilities
• Avoid hidden company issues
• Require less due diligence

How West Perth Legal Can Help

We offer fixed-fee, practical legal support for WA business transactions. Our services include:

• Drafting and reviewing Share Sale and Business Sale Agreements
• Legal due diligence and risk assessment
• Advice on employment, leases, PPSR, IP and contracts
• Structuring guidance to protect your legal position

We work with sellers and buyers across retail, hospitality, trades, childcare, professional services and more.

Ready to Sell or Buy a Business in WA?

Whether you’re selling shares or assets, West Perth Legal provides clear, commercial and protective legal advice tailored to WA businesses. Contact us for an obligation free quote.

Disclaimer: the content of this article is provided as general information only and does not constitute legal or other advice on any specific matter and should not be relied upon as such. If you are seeking or require legal advice, please contact our lawyers.