Legal Procedures for Selling Your Company in Germany

When it comes to selling a company in Germany, focusing solely on finding a buyer is insufficient. The transaction is based on multi-layered regulations such as the German Commercial Code (HGB), Civil Code (BGB), tax laws, and competition law at every stage. For international investors and entrepreneurs, this scenario represents both an opportunity and a serious compliance obligation.

In this article, I will address the key legal procedures you need to follow when selling your company in Germany, step by step, along with points that global-minded investors and founders should pay attention to. Additionally, I will organically explain where Corpenza’s support in mobility, corporate structuring, payroll, and tax optimization can come into play for those who want to carry out a similar process in other European countries or in multiple countries simultaneously.

1. Strategic Preparation: Planning the Sale from a German and Global Perspective

1.1. What type of sale? Share or asset?

First, clarify the sale structure:

• Share sale (Share Deal): You transfer shares of GmbH or AG; all assets, contracts, and liabilities of the company pass to the buyer.
• Asset sale (Asset Deal): You sell specific assets (brand, customer portfolio, machinery, real estate, etc.); the legal entity remains in place.

From an international perspective, share sales generally progress faster; however:

• The buyer assumes past tax, labor law, and contractual risks.
• Large multinational buyers typically request detailed legal and financial due diligence.

At this point, working with a team experienced in international company formation and restructuring, like Corpenza, to devise a global exit scenario that provides “minimum tax, minimum risk” not only for Germany but also for other countries where you operate is very valuable.

1.2. Preparing the company for sale: Documents and compliance

A serious buyer in Germany will want to see the following files from the very beginning:

• Last 3–5 years financial statements (balance sheet, income statement, cash flow)
• All significant customer and supplier contracts
• Employee list, salaries, benefits, and union arrangements
• All licenses, patents, trademarks, and software rights
• Tax returns and any audit/objection files

An incomplete and inconsistent set of documents not only reduces the sale value but also increases the risk of legal disputes. If you have offices outside Germany or remote working teams, you also need to clarify the status and contracts of these employees. Corpenza helps you manage payroll for employees in different countries with its international accounting and payroll services, ensuring the transparency required by the buyer.

1.3. Global corporate structure: Holding, subsidiaries, and tax chain

If you have positioned your company not only in Germany but also across Europe, clarify the following questions before the sale:

• Is the structure under a European holding, or are there separate independent companies in each country?
• How do profit distributions and license fees flow; are transfer pricing rules applied?
• If the buyer wants to establish a global structure, how conducive is your existing structure to this?

At this stage, with Corpenza’s company formation, restructuring, and tax optimization services; simplifying your holding and subsidiary structure before the exit lightens both the legal procedure and the tax burden.

2. Legal Framework: Basic Rules for Selling a Company in Germany

2.1. Applicable laws and limits of contractual freedom

Most company sales in Germany are based on the following regulations:

• BGB (German Civil Code) – the general framework of contract law
• HGB (German Commercial Code) – provisions for commercial enterprises and merchants
• GmbHG / AktG – rules for share transfers in GmbH and AG
• German Tax Laws – corporate tax, income tax, VAT
• Competition Law – Federal Cartel Office (Bundeskartellamt) and EU competition rules

You can create a share purchase agreement in English with the buyer, and the parties can choose foreign law; however, German mandatory provisions (labor law, data protection, competition, consumer rights, etc.) cannot be overridden. International investors often overlook this fact and later face surprises.

2.2. Share transfer formalities: Differences between GmbH and AG

The two most common types of companies in Germany are:

• GmbH (Limited): Share transfer is done in the presence of a notary; the transfer agreement must be written and notarized. Notification to the commercial register is required.
• AG (Public Limited): In publicly traded or privately held companies, share transfer occurs through the delivery of shares and registration in the share register. Notarization may be required in special cases.

In a global sale, if the main agreement includes clauses such as pre-emption rights, approval conditions, lock-up periods, these can slow down the sales process. Be sure to identify these restrictions during due diligence.

2.3. Employee protection and collective transfer (similar to TUPE rules)

The “business transfer” principles applicable at the European Union level also seriously protect employees in Germany:

• If the business is transferred as a whole, employees’ employment contracts continue unchanged.
• The buyer assumes all labor law risks related to the acquired business (seniority, annual leave, past claims, etc.).
• Employee representatives and works councils (Betriebsrat) demand information and negotiation throughout the process.

Similar principles apply to remote teams globally. Corpenza, being well-versed in posted worker and payroll for remote workers according to European standards, enables you to present a legally clean and traceable workforce structure to the buyer.

3. Due Diligence and Documents: Transparency, Risk Management, and Value Enhancement

3.1. Buyer-side review: What areas do they focus on?

A serious buyer or fund conducts a detailed review in at least the following five areas:

• Legal due diligence: Contracts, shareholder structure, licenses, litigation and enforcement files, data protection, intellectual property.
• Financial due diligence: Revenue quality, profitability, cash cycle, debts, off-balance sheet liabilities.
• Tax due diligence: VAT, corporate tax, withholding taxes, transfer pricing, specific tax risks.
• HR and payroll: Employee rights, types of contracts, payroll practices, social security reporting.
• Operational and technical: IT infrastructure, SaaS licenses, data storage, cybersecurity.

If you have assets in multiple countries, the buyer will conduct this analysis separately for each country. Corpenza, with its expertise in international accounting and multi-country payroll, standardizes reports to expedite the process.

3.2. Non-disclosure agreement (NDA) and letter of intent (LoI)

In initial contacts with the party wishing to purchase your company, two documents play a critical role:

• Non-Disclosure Agreement (NDA): Protects financial and commercial secrets.
• Letter of Intent (LoI): Provides consensus on matters such as price range, payment structure, share/asset structure, exclusivity period.

Especially for global buyers, cross-border elements such as jurisdiction, arbitration, currency, and exchange rate are added to the LoI content. Corpenza can assist you in drafting this multinational LoI in a compliant manner, as it works with company sale agreements in different European jurisdictions.

3.3. Structuring the data set you will share

When creating a professional data room, apply the following principles:

• Organize documents by topic: legal, financial, tax, HR, operations, technology.
• Add a short summary and explanation to each document; foreign investors may struggle to understand German documents.
• Pay attention to data protection (GDPR) rules; anonymize employee data or share it at a minimum level.

In sales covering multiple countries, preparing a standardized data room format facilitates process management. Corpenza, with its experience in European residence permits, work permits, and workforce compliance, helps you present HR and mobility data in a legally compliant manner.

4. Sales Agreement and Closing: Legal Steps for Share/Asset Transfer

4.1. Share purchase agreement (SPA) and asset transfer agreement

The main agreement changes according to the type of sale:

• Share Purchase Agreement (SPA): You use this if you are selling shares; it regulates the conditions of the share transfer.
• Asset Purchase Agreement (APA): You use this if you are transferring specific assets.

Headings that must be included in these agreements:

• Subject of sale (share percentage or asset list)
• Sale price, payment structure (lump sum, installments, earn-out, escrow)
• Warranties and representations (reps & warranties)
• Indemnification mechanisms (indemnities)
• Non-compete and non-solicitation commitments
• Dispute resolution (court or arbitration; choice of country and city)

If you are curious about the practice in Turkey, the IBA’s Turkey investor guide details similar structures: Corporate M&A Minority Turkey – IBA.

4.2. Approvals, notifications, and competition law thresholds

In Germany, depending on the size of the company sale:

• Bundeskartellamt and, if necessary, EU Commission merger notification may be required.
• In certain sectors (finance, energy, telecom, defense), special permits and licenses regulations come into play.
• If a foreign investor is involved, Foreign Direct Investment (FDI) review may come into question.

Similarly, in Turkey, approval from the Competition Authority is required depending on the size; GÜN+Partners’ M&A summary explains this well: Private Mergers & Acquisitions in Turkey – Overview.

4.3. Closing day: Practical steps

In many transactions, closing steps proceed as follows:

• You sign share/asset transfer documents in the presence of a notary.
• The buyer usually releases the sale price through an escrow account.
• Board of directors/general assembly decisions are signed and reported to the commercial register.
• Authorization documents, signature circulars, and bank instructions are updated.

In multi-country sales, transfers in some countries may need to occur simultaneously (simultaneous closing). Corpenza can provide operational support for such coordinated closings, as it manages company formation, payroll, and personnel leasing processes simultaneously in different countries.

5. Tax, Workforce, and Residency: Managing the Side Effects of Global Exit

5.1. Tax planning: Where will the profit flow, how will it be taxed?

The profit you earn from the sale of the company requires planning from the following perspectives:

• In which country is the tax incurred? – Germany, the country of residence, or both?
• Are double taxation treaties coming into play?
• Does selling shares or assets reduce the overall tax burden?

In the case of Turkey, tax advantages can be obtained with conditions such as holding shares for a certain period; Bıçak Hukuk’s assessment touches on similar issues: Buying an Existing Business in Turkey – Bıçak Hukuk.

Corpenza, with its expertise in tax optimization and international accounting, helps you analyze the tax implications in Germany, Turkey, and other European countries together, assisting you in establishing the most advantageous structure before the exit.

5.2. Employees, payroll, and “remote-first” structures

The most sensitive issue when selling your company is often the workforce:

• The buyer may want to retain certain employees; often, retention bonuses for key personnel are offered.
• For remote international teams, the labor laws and social security rules of each country come into play.
• The buyer is not keen on gray-area freelance relationships and the risk of false self-employment.

Corpenza offers two critical solutions here:

• Payroll: You manage the salaries of your employees in different countries in accordance with local regulations; you present “clean” HR data to the buyer.
• Personnel leasing / posted worker: With a temporary employment model, you can “lease” certain personnel through Corpenza, softening the transition period.

5.3. Post-exit mobility: Residency, work permits, and citizenship

After the sale of the company, you will also redesign your career and life plan:

• If you want to live permanently in Europe, you will look at options for residency permits, work permits, or golden visas.
• Investment-based citizenship programs become attractive, especially for entrepreneurs looking to settle in a new country after the exit.
• You may want to position your new venture in a jurisdiction that is more tax-efficient.

Corpenza manages processes for golden visas, investment-based citizenship, residency/work permits, and new company formation in an integrated manner in Europe and globally. Thus, while selling your company in Germany, you can simultaneously plan your new life in another European capital.

6. Multinational Sale Scenarios: Integrated Approach with Corpenza

6.1. Selling a company in multiple countries simultaneously

A typical scenario for technology and service companies now looks like this:

• Main GmbH in Germany,
• Software development team in Turkey,
• Support office in Eastern Europe,
• Global remote network supported by freelancers.

An investor looking to buy such a structure typically wants a single contract, a single closing, and a legally compliant structure. In this scenario, Corpenza:

• Analyzes the company formation and workforce status in each country,
• If necessary, consolidates some operations through payroll or personnel leasing models,
• Designs a pre-cleaning process that reduces tax and compliance risks before the sale.

6.2. Regulatory trends and the upcoming period

As of November 2025, the key trends affecting company sales in Europe are shaping as follows:

• As digital and remote workforce increases, employee status reviews and payroll audits are tightening.
• Data protection and cybersecurity obligations are becoming separate risk headings in M&A contracts.
• Many countries are offering advantages in residency and citizenship for those investing in high-tech ventures.
• The global minimum corporate tax initiatives by the EU and OECD are making tax optimization schemes more technical.

In this environment, you need to sell your company not only based on its “current value” but also through the regulatory climate that will be valid in the next 5–10 years. Corpenza helps you design an exit plan that encompasses not only today but also tomorrow by following both regulatory trends and workforce mobility dynamics.

6.3. Actionable steps: What can you do now?

If you are considering selling your company in Germany or another European country within the next 12–24 months, here are concrete steps you can initiate today:

• Create an “exit readiness” checklist to make your company sellable.
• Review the contracts, payroll, and tax status for everyone you employ globally.
• Aim for the simplest corporate structure for offices and subsidiaries outside Germany.
• With your tax advisor and international mobility/company formation experts like Corpenza, design your post-exit life, residency, and new business plan.

As a result, if you manage the legal procedures correctly when selling your company in Germany, you will not only achieve a higher valuation but also make a strong start to your second career in a new country with a more flexible tax and residency regime. Corpenza positions itself alongside you to make this journey both legally compliant and strategically smart in Europe and globally.