The key decision when buying a business is made before signing the contract: whether to buy the company or its assets.
Purchasing corporate rights — you acquire the legal entity in its entirety: equipment, contracts, licences, as well as debts, legal proceedings, tax arrears and guarantees for third parties, of which you may not have been aware.
Acquisition of a company’s assets — you purchase specific assets: property, equipment, vehicles, and trade marks. The seller’s debts do not pass to you. It is more expensive and takes longer, but is considerably safer.
The difference between these two approaches can amount to the value of the entire transaction.
+38 095 554-54-24 — legal advice
What is transferred and what is not
| Company acquisition (share deal) | Asset acquisition (asset deal) | |
|---|---|---|
| Property | is transferred | is transferred |
| Contracts with counterparties | are automatically retained | require renegotiation |
| Licences and permits | are usually retained | are usually not transferred |
| Employees | remain | require re-employment |
| Debts and loans | are transferred to you | remain with the seller |
| Tax assessments | are transferred | remain |
| Legal disputes | are transferred | remain |
| History and reputation | is transferred | is not transferred |
Key point: if the value of the business lies in licences, permits or long-term contracts, an asset purchase may deprive you of precisely what you are paying for. If the value lies in property, an asset purchase is safer.
Therefore, the choice of structure is made based on the results of due diligence, rather than on the grounds that ‘it’s cheaper’.
Risks not visible on the balance sheet
Guarantees and sureties for third parties. The company has acted as guarantor for a partner’s loan — and this is not always reflected on the balance sheet. It only comes into play after you have made the purchase.
Tax reassessments. An audit may take place years later — covering periods when you were not yet the owner. Along with the company, you inherit its tax history.
Assets not owned by the company. Leased equipment, rented property, a vehicle fleet registered in the director’s name. You buy a ‘business’ — only to discover it has no assets.
Encumbrances. Mortgages, pledges, tax liens, and seizures arising from enforcement proceedings.
Seller’s bankruptcy. The most dangerous risk: a transaction concluded on the eve of bankruptcy may be declared void on the grounds that it was entered into to the detriment of creditors — and the asset may be taken from you even years later. It is therefore essential to check for signs of the seller’s insolvency.
Corporate disputes. A share sold without the consent of other shareholders, the articles of association restricting disposal, or a decision to sell taken in breach of regulations — the transaction may be challenged by co-owners.
AMCU approval. If the indicators exceed the established thresholds, the transaction requires prior approval for concentration. Without it — a fine and the risk of invalidity.
Protection in the contract
A standard ‘model’ contract offers the buyer no protection whatsoever. What should be included:
Seller’s warranties — written confirmation that the company has no hidden debts, guarantees, disputes or tax risks; that the assets belong to it and are unencumbered.
Indemnity — the seller’s obligation to compensate for losses if the warranties prove to be false. Without this clause, the warranties are merely empty words.
Escrow — part of the sum is held in escrow for a specified period and is paid out only if no hidden risks materialise.
Conditions precedent — the agreement comes into force only after certain conditions have been met: repayment of debts, obtaining authorisation from the AMCU, and the removal of encumbrances.
Payment terms — and the point at which title is transferred. The most dangerous arrangement is to pay the full amount before the title is transferred.
When a solicitor is not required
Purchasing a standalone asset with a clean history from a verified seller — a basic check of the registers and a standard contract will suffice.
A solicitor is required when:
- you are buying a company or a share in it;
- the seller has debts, court cases or tax issues;
- the value of the business lies in licences or contracts;
- the assets are encumbered or registered in the names of related parties;
- there are signs of insolvency on the part of the seller;
- the transaction requires approval from the AMCU;
- the transaction amount is substantial.
How we work
- We carry out due diligence — we check what you are actually buying.
- We select the structure — a company or assets, taking into account the tax implications.
- We check whether AMCU approval is required — before the transaction, not after.
- We draft the contract — including warranties, indemnities, escrow and conditions precedent.
- We oversee the settlement and transfer of title — until your rights are registered.
- We provide defence if a risk materialises — recovery from the seller, challenging the transaction.
Cost of services
| Service | Price |
|---|---|
| Consultation | from 1,500 UAH |
| Legal due diligence | from 5,000 UAH |
| Transaction structuring, tax analysis | from 5,000 UAH |
| Drafting or reviewing an asset purchase agreement | from 5,000 UAH |
| Support during negotiations | from 5,000 UAH |
| Preparation of procedural documents | from 5,000 UAH |
| Litigation support | from 10,000 UAH |
| Comprehensive support for commercial cases | from 30,000 UAH |
Full price list · Legal due diligence
Questions and answers (Purchase of company assets)
Why is buying assets safer than buying a company?
The seller’s debts, tax assessments and legal disputes do not pass on to you. When you buy a company, you acquire it along with its entire history — including what you haven’t seen.
Are licences transferred when purchasing assets?
Usually not. If the value of the business lies precisely in its licences or permits, purchasing assets may deprive you of what you are paying for. This is determined during the transaction structuring phase.
What happens if the seller goes bankrupt after the transaction?
The transaction may be declared void on the grounds that it was entered into to the detriment of creditors — and the asset will be taken away from you. Therefore, checking for signs of the seller’s insolvency is essential prior to the transaction.
Is authorisation from the AMCU required?
If the parties’ indicators exceed the established thresholds — yes, and it must be prior. A transaction without authorisation carries a fine and the risk of invalidity.
What are the seller’s warranties in the contract?
Written confirmation that the company has no hidden debts, guarantees or disputes. Together with the clause on compensation for losses, this is the buyer’s main protection.
What is escrow?
Holding back part of the price for a specified period: the money is paid to the seller only if no hidden risks materialise.
What should you do if a risk is identified after the deal has been concluded?
Claim damages from the seller on the basis of breached warranties. However, this is only possible if such warranties were included in the contract — they are not usually found in standard contracts.
Can the price be reduced after due diligence?
Yes, and this is the most common outcome of due diligence: the risk report becomes a bargaining chip in negotiations and usually pays for itself many times over.
What documents are needed to get started?
The company’s details or a list of assets. A preliminary check using public registers can be carried out at this stage.
Consulting a solicitor regarding the purchase of company assets from ‘Svarog’
Before signing, make sure you know exactly what you are buying. Send us the company’s details — we will check for debts, encumbrances, court cases and signs of insolvency, and advise you on how to structure the deal so that someone else’s problems do not become yours.
+38 095 554-54-24 · Kyiv, 7 Khoriva Street (Podil) · Mon–Fri 9.00–18.00