There are two ways to buy a business. You buy the shares in the company that runs it, or you buy the assets the business is made of and leave the company behind.
Sellers usually want the first. Buyers usually want the second. Where the deal lands is one of the earliest and most consequential decisions in the transaction, and it is frequently made by whoever mentions it first rather than on the merits.
What you are actually buying
A share sale transfers ownership of the company. The company continues, unchanged, with the same name, the same contracts, the same employees, the same licences, the same bank accounts and the same tax history. You have simply become its owner.
That includes everything the company owes, whether or not anyone told you about it. Unpaid tax, an employee claim nobody mentioned, a guarantee given years ago, a dispute that has not surfaced yet: it all comes with the shares.
An asset sale transfers specific things: the premises or the lease, the equipment, the stock, the goodwill, the customer list, the intellectual property. The seller’s company keeps its own liabilities, and keeps existing.
The trade is straightforward. A share sale is cleaner to execute and dirtier to inherit. An asset sale is cleaner to inherit and much more work to execute.
Why an asset sale is more work
Everything has to be transferred individually, and each item has its own mechanics.
Contracts do not simply move. Assignment or novation is required, and many contracts require the counterparty’s consent. Some counterparties use that moment to renegotiate. A business whose value sits in a handful of customer contracts can be difficult to buy as an asset sale for exactly this reason.
The lease requires the landlord’s consent, and landlords are entitled to take their time and to attach conditions.
Licences and permits often cannot be transferred at all, and have to be applied for afresh by the buyer, on the buyer’s own merits and on the regulator’s timetable.
Employees do not transfer automatically in the same way as in a share sale. Where the business itself is being transferred there is a statutory framework governing the position, and where it is not, employees have to be terminated and re-hired, with the cost and the risk that carries. Our employment team advises on which applies.
None of that arises in a share sale, because nothing changes hands except the shares.
The tax question usually decides it
Share transfers attract stamp duty at 0.2%, calculated on the actual price or the net asset value of the shares, whichever is higher. On a $5 million deal that is $10,000.
Property transfers attract Buyer’s Stamp Duty on the property, at rates rising to 5% for non-residential and 6% for residential. On $5 million of commercial property that is roughly $190,000.
So where the business owns real estate, the stamp duty gap between the two structures can be enormous, and this is precisely why the Additional Conveyance Duty regime exists.
Additional Conveyance Duty
ACD applies where equity interests are acquired or disposed of in a property-holding entity whose properties are primarily residential, by a person who is or becomes a significant owner.
The definitions are specific:
- A PHE is an entity where at least 50% of its total tangible assets are prescribed immovable property in Singapore, broadly property on residentially zoned land.
- A significant owner beneficially owns at least 50% of the equity interest or voting power, alone or with associates.
Where it bites, the rates are severe:
| Rate | |
|---|---|
| ACD (Buyer) | BSD at 1% to 6%, plus ABSD at a flat 65% |
| ACD (Seller), interest acquired 11 Mar 2017 to 3 Jul 2025, disposed within 3 years | SSD at a flat 12% |
| ACD (Seller), interest acquired on or after 4 Jul 2025, disposed within 4 years | SSD at a flat 16% |
ACD is charged on the market value of the underlying residential property, pro-rated by the beneficial interest transferred.
The point to take from this is that buying a residential property through a company is not a way around ABSD. That was the mischief the regime was designed to stop, and it stops it.
Note the limit as well: ACD targets entities holding primarily residential property. A company whose assets are offices, shops or industrial premises is a different question, which is one reason commercial property is bought through corporate structures far more often than residential property is.
GST
An asset sale is a supply of assets and will generally attract GST where the seller is registered, unless it qualifies as a transfer of a going concern. A share sale does not. See GST on commercial property.
Due diligence looks completely different
In a share sale, due diligence has to cover the whole company and its entire history: corporate records, tax filings, litigation, employment, contracts, guarantees, regulatory compliance, everything. You are inheriting it all, so you need to know about it all. Warranties, indemnities and a retention or escrow do the work that diligence cannot finish.
In an asset sale, diligence is narrower: title to the assets you are buying, encumbrances over them, and whether they can be transferred. Anything you do not buy is not your problem.
That difference in scope shows up in cost, and it is a poor place to save money in a share sale.
How the choice is usually resolved
Sellers prefer a share sale because it is a clean exit, and because the tax outcome for them is frequently better.
Buyers prefer an asset sale because it leaves the history behind.
The usual compromise is a share sale with a well-drafted warranty and indemnity package, a disclosure process that is taken seriously, and part of the price retained or escrowed against the risks diligence identified. Where a specific liability is known and quantified, a specific indemnity is worth far more than a general warranty.
Where the business holds property, run the stamp duty numbers on both structures before you decide. The gap is frequently larger than everything else being negotiated.
Where this sits
Our mergers and acquisitions page covers how we run these transactions, corporate and commercial covers the underlying agreements, and commercial conveyancing covers the property leg where the deal has one.
Stamp duty and GST rates change at Budget and sometimes between Budgets. Rates above are those published by IRAS and current as at August 2026; confirm the position on the IRAS website before relying on a figure. We are not tax advisers, and the structure of a transaction of this size should be modelled with an accountant.