Acquisition Risk in Germany: Asset Deal or Share Deal?

Can you leave the risk behind when you buy a German company? The difference between an asset deal and a share deal, the §613a staff trap, and where protection actually comes from.

An experienced business owner from abroad, weighing an acquisition in Germany, often says the same thing:

“I don’t want the whole company. Let me just take its customers and its know-how and fold them into my own business — and leave the leftover risks behind.”

It sounds shrewd. It even sounds like the reflex of a cautious, experienced investor. Take the value, leave the risk — who wouldn’t?

The problem is that in a cross-border acquisition this instinct is one of the most common and one of the most misleading. Taking a German company “with only its good parts” is technically possible — there’s even a name for it. But that structure usually brings back exactly the risk you were trying to avoid, and in a form the seller will be least willing to accept. This article explains why the instinct doesn’t work, and where protection actually comes from.

The “let’s just take the good parts” instinct

The instinct comes from a sensible place. In front of you is a German business owner with no successor, heading toward retirement: a healthy customer base, settled technical expertise, perhaps a team that’s run smoothly for years. That’s the attractive part. But you don’t know what’s on the company’s invisible side: hidden debts, an unopened lawsuit, underpaid taxes, badly drafted old contracts, employee obligations that land on your neck the moment you take over.

The natural conclusion looks like this: take what’s valuable (customers, know-how) and leave the legal entity and its burdens with the seller. This isn’t a naïve idea — it has a real and legitimate counterpart in German law: the asset deal (Asset Deal, transfer of assets). We’ll see exactly what it is in the next section.

But this instinct rests on a single unspoken assumption: that value and risk can be separated cleanly, like picking a product off a shelf. That’s where the whole thing knots up. Because the line separating customers, knowledge, and risk in a company isn’t as clear as it looks — often it doesn’t exist at all.

There are two basic ways to acquire a company in Germany, and the difference between them is the entire point of this article.

In a share deal, you buy the company itself. More precisely, its shares — for a GmbH, the Geschäftsanteile. The legal entity (Rechtsträger) stays the same; only its owner changes. The company is who it was yesterday: same tax number, same contracts, same employees, same bank account. You simply take the seat. What this means: whatever is inside — machines, customers, licenses, and all the liabilities — comes with you automatically. Known debts and ones that haven’t yet surfaced. Everything changes hands in a single transaction; you don’t sort through it.

In an asset deal, you don’t buy the company itself but selected things from inside it. The machines, the customer list, the brand, the technical know-how, particular contracts — each one individually (in law this is Einzelrechtsnachfolge, singular succession). The old legal entity, the GmbH itself, stays with the seller, emptied of what you took. You move the assets you bought into your own company — newly formed or existing. You decide what to take and what to leave.

Here’s the technical counterpart of the opening instinct: the asset deal seems, in theory, to offer the promise of “take the good parts, leave the bad shell.” It looks as if you could leave the indebted, litigated, burdened legal entity with the seller and take only what’s valuable into your own clean company.

So far it all makes sense. The problem begins with whether that promise holds in practice — and usually it doesn’t. Because “choosing what to take” isn’t as clean a transaction as it sounds: some things can’t be pulled out of the company, and some risks follow the assets you take anyway.

Why “only the good parts” doesn’t hold in an asset deal: three risks

The promise of the asset deal was: take what’s valuable, leave the risk behind. In practice, water leaks through that wall in three separate places. All three say the same thing — value and risk are less separable than you think.

1. If you take the operation, the staff come with it (§613a BGB)

Say you took the customer base and the technical know-how. But who keeps those customers standing, who carries that knowledge? People — the team that runs the operation, the skilled workers, the staff in the field. Without them, the “know-how” you bought often stays on paper.

Here’s the trap: when you take over not just scattered assets but a functioning unit — a whole that keeps its identity through its employees, organization, and function (a Betriebsteil) — German law’s §613a BGB kicks in. In that case the existing employment relationships pass to you by law, with all their rights and seniority; you can’t write “I’m not taking the staff” into the contract to exclude them. (Each employee has the right to object to the transfer within one month of being informed and stay with the old employer — but that’s the employee’s right, not your selection tool.)

The threshold that matters: this rule applies not to disconnected asset purchases but when you take over a functioning whole. Which is precisely when you want the valuable thing — the live customer relationship and the team that carries it. The result is ironic: the staff risk you chose the asset deal to avoid comes back the moment you want to take the operation. Because most of the time, “the customer” and “the team that manages it” are the same thing.

2. A customer portfolio is not a “transferable” asset

The instinct pictures a customer base as a box: take it, move it into your company, done. But a customer isn’t property — it’s a relationship, and that relationship is tied to contracts.

In a share deal this isn’t an issue, because the contracts stay inside the legal entity. In an asset deal, each contract has to be transferred individually — and transferring an entire contract with its counterparty (Vertragsübernahme) requires, as a rule, the counterparty’s consent, unless the contract provides otherwise. So you can’t unilaterally “move” the customer portfolio; each customer decides for themselves whether to continue with the new company. On top of that, when ownership or control changes — whether the structure is asset or share — change-of-control clauses in some contracts may give the counterparty a right to exit.

An example makes the weight of this clear. Picture a logistics company hauling cement or bulk freight: the customer chose that carrier for its capacity, its specialized equipment, years of built trust, and the know-how of its driver crew. You can’t transfer that relationship to a new company — one without a German registration yet — automatically, with a change of signage. The “portfolio” you paid for can start to dissolve at the moment of transfer — because that value was tied to the seller’s person and the existing structure.

3. Some assets can’t be transferred: licenses and permits

The third risk is the quietest, because most buyers notice it last. In some sectors the heart of the business is an official permit granted specifically to the entity.

Stay with the logistics example: in Germany, commercial freight transport requires a Güterkraftverkehrserlaubnis for domestic haulage and a Gemeinschaftslizenz for cross-border. This permit is granted by the authority responsible for the operating base, to a specific entity and tied to ongoing conditions: reliability, the financial standing of the business, and the presence of a Verkehrsleiter (transport manager) with professional qualification (fachliche Eignung). So this permit doesn’t pass to you among the assets you take over like a machine — your acquiring entity has to obtain its own permit from scratch, with its own Verkehrsleiter. What you need most — the authority to run the business and a qualified person to run it — isn’t a purchasable line item but a right tied to the entity and the person.

The same logic holds across many other sectors: licenses, sector permits, and certifications are often tied to the legal entity and can’t be transferred as “assets.” When you leave the company’s shell behind, you often leave behind the very permit that makes the business possible.

So far we’ve looked at everything through the buyer’s eyes. Step back and ask what the seller came to the table for, and the instinct’s final and hardest obstacle appears.

Recall the typical Nachfolge (succession) seller: no successor, heading into retirement, wanting to exit the company they gave their life to cleanly and completely. For them the ideal transaction is to sell all the shares and transfer everything — assets, contracts, employees and all the liabilities — then walk away without looking back. That is, a share deal. What they dream of is what you’re fleeing: transferring the whole.

Your “let’s just take the good parts” offer hands them the exact opposite. In an asset deal the seller is left with a legal entity emptied of the valuable items you bought — a shell (Mantel): the debts you didn’t take, the risks left unclosed, the cost of liquidating the staff you didn’t take over, and (varying by structure and personal situation) often a less favorable tax position than a share sale. So what you call “good parts, no risk” means, in the seller’s eyes, “let me keep all the bad parts.” The two sides’ interests are exact mirrors — pointing in opposite directions.

The practical consequence is a selection effect most buyers miss. The owner of a healthy, profitable company with clean books that can be sold already holds a better card: a clean share deal with a full exit. Such a seller has little reason to accept an asset-only offer that keeps the risk on them. So the sellers most willing to accept this structure are often the ones whose shares are hard to sell whole — and that difficulty is usually tied to exactly the problems you wanted to avoid (weak books, uncertain liabilities, unresolved risks).

The conclusion looks backward at first but is clear: insisting on asset-only doesn’t reduce your risk; it both narrows and lowers the quality of your candidate pool. The good candidates — clean, settled, ready-to-transfer companies — come to the table in the structure the seller prefers, not the one you prefer. So the real question should be: since we can’t leave the risk behind by rejecting the legal entity, where do we get that protection?

How to manage acquisition risk: warranties and the right structure

Every section so far has led to the same place: you can’t leave risk behind by rejecting the company (asset-only) — it either leaks back, or the seller won’t accept it. So where does the protection the buyer wanted from the start come from? The answer is in the exact opposite direction from the instinct: you manage risk not by leaving the legal entity behind, but through the contractual structure of a properly built share deal.

There’s a subtle but decisive fact of German law here: in a share purchase, the statutory defect-of-quality provisions apply only very narrowly — so “the law will protect me anyway” is, in practice, no safeguard at all. Protection isn’t something the law gives on its own, nor is it won by rejecting the legal entity; it arises from the independent warranty undertakings you write into the contract. The point isn’t to “not take” the risk, but to keep it on the seller by contract.

This is a two-step job. First, with due diligence, you see the risk — you surface the hidden burdens in the books, the contracts, the taxes. Then you distribute each risk you saw by contract: the seller guaranteeing representations about the past (for example, balance-sheet and tax warranties), the seller’s specific indemnity undertakings (Freistellungen) for known risks found in due diligence, and on the money side, holding a slice of the price in a blocked account (escrow) or spreading payment over time.

The most elegant example here answers the opening fear directly. The buyer worried, “what if the customers leave and I’ve paid for nothing?” The solution isn’t to reject the legal entity — it’s an earn-out: part of the price is paid only if the customers are still there after a set period. The protection they were looking for lived not in the asset deal’s promise but in the share deal’s contract.

The cap, threshold, and duration of these clauses are the real substance of the negotiation — and all of it is an architecture built not by you but by the Steuerberater and Rechtsanwalt working with you. This article isn’t legal advice; its aim is to show the shape of the decision. Which clause fits your structure can only be determined over a concrete target and concrete books, sitting down with the right specialists.

Conclusion: the right question isn’t “which company?” but “which structure?”

Back to the start. Acquiring a German company “by just taking its customers and know-how and leaving the risk behind” — that cautious-sounding instinct — usually doesn’t hold in practice: the staff come back via §613a, the customer portfolio is tied to contracts, the license is specific to the entity, and the healthiest sellers won’t accept this structure in the first place.

But that doesn’t mean the goal is unreachable. It only means the right question changes. It isn’t “what trick can I find to avoid taking the risk?” — it’s “how do I build the structure to keep the risk on the right side?” The protection you’re looking for isn’t in rejecting the acquisition but inside a properly built transfer contract: seeing the risk through due diligence, closing off the past with warranties and indemnities, securing value and money with earn-out and escrow.

This is a job where three separate disciplines meet: the strategic view that designs the process, the Rechtsanwalt who writes the contract, and the Steuerberater who builds the tax and the structure. None is sufficient alone; what matters is that they come together in the right order and with the right people.

If you haven’t yet decided between building and buying, Buying a Company in Germany can help you start a step further back. If you’ve decided, and it’s time to build the structure, a confidential consultation is always a good way to ask the right questions in the right order.

Frequently asked questions

What’s the difference between an asset deal and a share deal? In a share deal you buy the company’s shares — the entire legal entity, with its assets and all its liabilities. In an asset deal you take selected assets from inside the company (machines, customer list, brand, particular contracts) individually, leaving the old legal entity with the seller.

If I take over an operation in Germany, do the employees automatically transfer to me? If you take over a functioning unit while it keeps its identity, then under §613a BGB the existing employment relationships pass to you by law as a rule; each employee retains the right to object to the transfer within one month of being informed. This is general information; you need to assess your specific situation with a Rechtsanwalt.

Can I buy only the customer portfolio and the know-how? Technically an asset deal is possible. But customer contracts transfer, as a rule, with the counterparty’s consent, some licenses are specific to the entity, and taking over the operation with its staff can trigger §613a. So “only the good parts” usually can’t be separated from one another in practice.

The protection you’re looking for isn’t in rejecting the acquisition but inside a properly built transfer contract. If you’re weighing a specific company in Germany and want to think through the right structure, a confidential consultation is a good place to start.