Corporate & Commercial · Sale of Business or Shares

Selling or buying a business in South Africa? Get the structure right first.

A share sale, a going-concern sale, and an asset sale are three different legal transactions with three different tax bills and three different sets of risk. lawvero tells you which one you're actually doing, then drafts and closes it, for one fixed fee.

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  • Drafted for your deal, not templated
  • Fixed fee, agreed upfront
  • Companies Act · Labour Relations Act · Tax Act compliant

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Most deals don't fail at signature. They fail in the gap between what a seller thinks they're selling and what the buyer thinks they're buying.

"Selling the business" means something different depending on which of three legal transactions you're actually running: a sale of shares, a sale of the business as a going concern, or a sale of specific assets. Each one changes hands differently, carries different liabilities to the buyer, and triggers a different tax bill.

Get this wrong and the consequences show up later, not on signing day: a buyer who inherits a lawsuit they didn't know about, a VAT bill that should have been zero-rated, an insolvency-law notice that was never published, or a s197 employee dispute nobody saw coming.

lawvero starts every instruction by working out which of the three transactions you're actually in, then builds the agreement, the compliance steps, and the closing checklist around it.

Three ways to sell a business. Only one is right for your deal.

The legal form the business trades in, and what you actually want to transfer, decides which path applies.

Path 01

Sale of Shares

You sell the company itself: same registration number, same history, same contracts. The buyer steps into your shoes entirely.

  • Buyer inherits all liabilities, known and unknown
  • No VAT: Securities Transfer Tax at 0.25%
  • Contracts continue automatically, no consent needed

Path 02

Sale as a Going Concern

The operating business (assets, contracts, staff, goodwill) moves into the buyer's entity. Your company shell stays behind.

  • Buyer takes only what's expressly assumed
  • Can qualify for 0% VAT if structured correctly
  • Staff transfer automatically under s197 of the LRA

Path 03

Sale of Assets

Specific equipment, stock, debtors, or IP change hands, not the operating business as a whole.

  • No automatic staff transfer
  • Standard-rated VAT (15%) applies per asset
  • Each asset class needs its own transfer step

Where deals actually go wrong

The three things most sale agreements miss

Not because the parties are careless, because these sit outside the sale agreement itself, in separate statutes most people never open.

Insolvency Act, s34

The Gazette notice nobody publishes

Selling a business outside your ordinary course of trade can require a Government Gazette and newspaper notice before transfer. Skip it, and creditors can unwind the sale after the fact, buyer and seller both exposed.

VAT Act, s11(1)(e)

The zero-rating that quietly falls away

A going-concern sale can be VAT zero-rated, but only if strict conditions are met at signature. Get one wrong and SARS reassesses at 15%, with penalties and interest, well after the deal has closed.

Labour Relations Act, s197

Staff who transfer whether you agreed to it or not

Employees move automatically with a going-concern sale, on their existing terms, by operation of law, not by agreement. What can be negotiated is who carries the liability for pre-transfer claims. Miss this and it becomes a dispute after closing.

How lawvero takes you through it

One instruction, one fixed fee, five stages from first call to registered transfer.

  1. Triage & Structure

    We establish the legal form of the business and confirm whether you're looking at a share, going-concern, or asset sale, before anything is drafted.

  2. Due Diligence

    Legal, tax and contractual review of what's actually being sold, and a disclosure letter that protects both sides from surprises later.

  3. Drafting

    The sale agreement: warranties, price mechanism, conditions precedent, restraint of trade, built for the specific structure you're using, not a generic template.

  4. Compliance

    Insolvency Act notices, Competition Act filings, s197 employee process, VAT and transfer duty positioning, FICA, run in parallel, not left until closing week.

  5. Closing & Registration

    CIPC filings, share or asset transfer, CIPC or Deeds Office registration, and a closing checklist confirming every step has actually happened.

What's actually in the fixed fee

No hourly clock, no surprise invoice for "urgent" work. You know the cost before you instruct us.

Worth knowing

The fee depends on which of the three paths applies and the size and complexity of the deal: a straightforward asset sale and a multi-party share sale with Competition Act notification are not the same job. We confirm the fixed fee after the triage call, before you commit to anything.

  • Structuring advice: which of the three transaction types fits your deal, and why
  • Sale agreement drafted for your structure: shares, going concern, or assets
  • Disclosure letter and warranty schedule
  • Insolvency Act s34 notice, where required
  • s197 employee transfer process and documentation, for going-concern sales
  • CIPC filings: share transfers, beneficial ownership register, director changes
  • A closing checklist matched to your transaction type, so nothing is assumed done

Questions people ask before they instruct us

Should I sell shares or sell the business itself?

It depends on what the buyer wants to take on. A share sale is usually simpler for the seller and keeps contracts intact automatically, but the buyer takes on every liability the company has, known and unknown. A going-concern sale lets the buyer choose exactly what to take on, but requires more work upfront: contracts have to be individually assigned, and staff transfer automatically under s197 of the Labour Relations Act. We'll tell you which one actually fits your deal once we understand what's being sold and to whom.

Will I have to pay VAT on the sale?

A pure share sale carries no VAT: it's an exempt financial service, but Securities Transfer Tax of 0.25% applies instead. A going-concern sale of the business can qualify for 0% VAT if strict conditions are met (both parties VAT-registered, all necessary assets included, the business capable of separate operation): get this wrong and SARS can reassess at the standard 15% rate later. A sale of individual assets is generally standard-rated at 15% per asset. We confirm the correct position for your specific deal before the agreement is signed.

What happens to my staff if I sell the business?

If the business is sold as a going concern, employees transfer automatically to the buyer on their existing terms and conditions, with continuity of service preserved: this happens by operation of law under s197 of the Labour Relations Act, not by agreement between the parties. What the sale agreement can and should deal with is which party carries liability for claims relating to the period before transfer. In a pure asset sale, there's no automatic transfer, and new employment contracts are needed if staff are being taken on.

Do I need to advertise the sale anywhere?

Possibly. Section 34 of the Insolvency Act requires certain business sales (those outside the seller's ordinary course of trade) to be advertised in the Government Gazette and local newspapers before transfer. If this isn't done, creditors of the seller can have the sale set aside within a set period after transfer, which exposes both buyer and seller. We assess whether this applies as part of the initial triage.

Does the Competition Commission need to approve this?

If the combined asset value or turnover of the buyer's and seller's groups exceeds the thresholds set under the Competition Act, the transaction is a notifiable merger and can't be implemented before approval from the Competition Commission or Tribunal. This applies regardless of whether you're structuring the deal as a share sale, going-concern sale, or asset sale: what matters is the change of control, not the mechanism. We check this against the current thresholds at the time of your deal.

How is the fixed fee worked out?

After an initial triage conversation to understand what's being sold, to whom, and which of the three structures applies, we quote a fixed fee for the full instruction: drafting, compliance steps, and closing. You'll know the total cost before you commit to anything, and there's no hourly clock running behind it.

Regulatory disclosure. lawvero (Pty) Ltd is a legal services platform and is not itself a law firm. Where reserved legal work is needed, we refer you to attorneys that can assist. This page is general information for the South African market as at the date of publication and does not constitute legal or tax advice on any specific transaction. Rates, thresholds and statutory requirements referenced above (including under the Income Tax Act, VAT Act, Companies Act, Labour Relations Act, Insolvency Act and Competition Act) change periodically, please confirm the current position with us before acting.

Start here

Tell us what you're selling, or buying, and we'll tell you which path applies.

A short conversation is enough for us to identify the right structure and quote a fixed fee. No obligation, no hourly clock for the first call.

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General information only, not legal advice, until you've formally instructed us.