Ireland: Preparing For A Hotel Sale – Share Sale Or Asset Sale? Part 1

A hotel deal may be structured as a share sale, with a buyer acquiring ownership of the company which owns the hotel, by purchasing all of the issued shares of the company. The sellers will be the individual shareholders of the company and the key transaction document will be a share purchase agreement.

However, in practice, hotel deals are typically structured as an asset sale. This involves a buyer instead choosing the specific assets and liabilities of the company that it wishes to purchase. The seller will be the company itself and the key transaction document used to transfer ownership will be a business transfer agreement.

A share sale may initially appear the more attractive and straightforward option. However, legacy tax issues including other potential claims, and tax issues arising from a share sale may make an asset purchase a far more attractive proposition from a buyer's perspective.

Assets and liabilities

A buyer has the ability to choose the specific assets and liabilities of the company that it wishes to acquire in an asset sale. This gives a buyer a degree of flexibility as well as protection from any known or unknown liabilities of the company, which it can opt to leave behind. A buyer should ensure that full details and listings of all assets that it is acquiring are inserted as a schedule to the business transfer agreement. Similarly, the business transfer agreement should list the excluded liabilities which the buyer will not be acquiring. This ensures that the contract reflects the deal as commercially agreed between the buyer and seller. The business transfer agreement should include an apportionment of the value between each of the various assets.

All assets and liabilities of the company pass automatically to a buyer on a share sale. They are not required to be specifically listed in the share purchase agreement. In a share sale, the buyer takes on all liabilities, including unknown liabilities (including potential tax liabilities and penalties). As a result, this generally requires a buyer to carry out a lengthier, more comprehensive and consequently more expensive due diligence process.


Under the TUPE Regulations, the general rule is that employees automatically transfer to a buyer in an asset sale. A buyer is required to ensure that the employees enjoy the same terms and conditions of employment that applied to their previous employment, with the exception of pension entitlements. A 30-day notification and consultation period must be carried out by the seller in advance. This can impact on the timing of completion of the deal. Therefore, engagement with employees should happen at an early stage. The task of issuing TUPE notices and engaging with what can sometimes be a large number of employees may be administratively burdensome on the person appointed with carrying out that task. In light of this, sufficient resources should be dedicated to this key action point by the seller.

In contrast, employees pass automatically to a buyer in a share sale and the TUPE protections mentioned above will not apply to the transfer.

Commercial contracts

Existing contracts will need to be assigned or novated in an asset sale as the identity of the parties to those contracts will change. This process requires a review of the assignment and notice provisions in existing contracts. In addition, negotiation with third parties in relation to obtaining consent to the novation of the contracts may be required. This can be time-consuming and may require input from legal advisors.

In a share sale, contracts do not need to be assigned or novated. Instead, consent must be obtained for contracts which contain a "change of control" clause. The "change of control" clause may give the other party to the contract the right to terminate the contract on the basis of the change of control or ownership of the seller. Therefore, it is imperative that the sellers engage with the counterparties and satisfy the consent requirements. This process will necessitate a review of the change of control clauses in the existing contracts, which again can be time-consuming and may require input from legal advisors.

Post Completion

The selling company will continue to exist following completion of an asset sale. The shareholders of the seller will need to consider what steps are needed in respect of its corporate existence going forward. The shareholders may, for example, opt to liquidate the company or to change its name.

In a share sale, the buyer becomes the shareholder of the target entity, which continues to exist as it did before the deal and the previous shareholders simply exit.

Real Estate

There will be a real estate element involved in all hotel deals and specialist real estate advice should be sought from your legal advisors.


In part two of Preparing for a Hotel Sale – Share Sale or Asset Sale? we will look at the mechanisms available to buyers and sellers to determine the sale price. We will also set out the various taxation issues that need to be considered.

We recommend that buying and selling parties take time in advance to consider the legal, financial and tax pros and cons involved in structuring a hotel deal as a share sale or asset sale. Specialist advice should be sought from your legal, financial and tax advisors on the implications of both structures, which will assist in making this decision.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
20 Jan 2019, Conference, Dublin, Ireland

We are delighted to sponsor Airline Economics Growth Frontiers 2019 Conference taking place in the Shelbourne Hotel in Dublin from 20 to 23 January 2019.

22 Jan 2019, Seminar, Dublin, Ireland

We are delighted to invite you to our first Employment Law Top Tips seminar of 2019 on Tuesday 22 January in our offices on Barrow Street, Dublin 4.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions