Buying a business in Singapore: share purchase or asset purchase?

What changes hands

In a share purchase, you buy the shares from the existing shareholders. The company itself does not change: it keeps its assets, its contracts, its employees and its debts, and simply has new owners.

In an asset purchase (often called a business purchase), you buy the business's assets from the company that owns them. Each kind of asset is transferred in its own way. Stock and equipment can pass by delivery, while land needs a formal transfer registered with the Singapore Land Authority, and contracts and intellectual property need their own assignments.

Singapore firms report that most private deals are done as share purchases, because they are usually simpler. An asset purchase tends to be chosen when the buyer wants only part of a business, or wants to leave its past liabilities behind.

Liabilities

This is often the deciding point. When you buy shares, you take on the company's liabilities along with it, including ones nobody told you about. That is why due diligence, and the warranties and indemnities in the sale agreement, matter so much in a share deal.

When you buy assets, you generally take on only the liabilities you agree to take.

Consents

In a share deal, the company's own contracts stay in place, but check them for change-of-control clauses: a lender, landlord, supplier or customer may need to consent, or may be able to end the contract, when the company changes hands. Pre-emption or tag-along rights in the company's constitution or shareholders' agreement may also need to be waived.

In an asset deal, contracts and leases usually have to be assigned or novated to the buyer, which needs the other party's agreement. Some government licences cannot be transferred at all, and the buyer must apply for its own.

If a company is selling all or substantially all of its business, its shareholders must approve the sale at a general meeting under section 160 of the Companies Act.

Employees

In a share deal the employer stays the same, so employment contracts simply continue.

In an asset deal that is a transfer of the business as a going concern, section 18A of the Employment Act moves the employees it covers to the buyer automatically, on their existing terms and with their length of service intact. The seller must tell affected employees (and any union) about the transfer beforehand so that consultation can happen. Employees outside the Employment Act usually move by having their old contract ended and the buyer offering a new one.

Tax and costs

Stamp duty on a transfer of shares is 0.2% of the higher of the price and the net asset value of the shares, and the buyer usually pays it. It must be paid within 14 days of signing if the transfer is signed in Singapore, or 30 days if signed abroad, and in practice it is paid before completion. (Rates as reported by Singapore firms in 2026.)

A transfer of shares is not subject to GST. An asset sale may attract GST at 9% unless it qualifies as the transfer of a going concern.

An asset deal also needs more paperwork after signing: transfers, assignments or novations for each class of asset, and updates to registers such as intellectual property records.

Which one is right for you

It depends on what you are buying and why. A buyer who wants the whole business, its licences and its contracts with as little disruption as possible will usually prefer shares, and protect itself with due diligence and a well-drafted agreement. A buyer who wants only part of a business, or who is wary of its history, may prefer assets. Speak with a lawyer about your own deal before you agree a structure.