(For general information only. Please seek professional advice for actual tax implications.)

• May be subject to Capital Gains Tax on gains from the disposal of unlisted shares (if the Seller is a company, limited liability partnership, trust body or co-operative society).
• May trigger Real Property Gains Tax (“RPGT”) (if it’s shares in a real property company).
• Stamp duty may apply on share transfers.
• No stamp duty on individual assets (because no change in asset ownership).

• Ad valorem stamp duty may apply per transfer of asset (land, property, etc.)
• Gains from disposal may be taxable depending on the type of asset:
  • Real property → RPGT
  • Plant & Machinery / Equipment → Balancing charges (A balancing charge is added when an asset is sold above its tax written-down value.)

• Pre-emption rights or tag-along rights may apply
• Change-of-control clauses in contracts may require consent.

• May require third-party consents, novations, assignments and approvals.
• Board/shareholder resolutions may be required if a “substantial portion” of the business is disposed of (Section 223 Companies Act 2016).

• No automatic transfer of employees. Employee’s consent will be required.
• Employment procedures, notice periods and termination benefits under the Employment Act 1955 and Employment (Termination and Lay-Off Benefits) Regulations 1980 may be applicable (mainly for employees earning ≤ RM4,000 or manual labour).

* Note: Employees who reject equally favourable terms may lose entitlement to termination benefits.

• Review corporate records and governance compliance.
• Check litigation, regulatory compliance, and tax filings.
• Investigate related-party transactions and contingent liabilities.

• Verify title and ownership of assets.
• Assess encumbrances or security interests.
• Review assignability of contracts and licences.
• Perform physical inspection of assets.

• Warranties generally cover all aspects of the target company.
• Indemnities typically for tax, litigation and contingent liabilities.

• Warranties limited to specific assets sold.
• Indemnities are narrower, depending on the asset type and exposure.

• Continuity of business and operations.
• No need to reassign contracts or employees.
• Maintains existing licenses and permits.
• Preserves goodwill and the company’s brand reputation.

• Inherits all existing liabilities (both known and unknown).
• Potential exposure to historical or ongoing litigation or statutory breaches of the company.
• Extensive due diligence is required to uncover potential risks.

• Potentially higher sale price, as the buyer acquires the whole company.
• Clean exit from the business.
• Fewer transfer formalities (i.e. no individual transfer of assets).

• Buyers may demand extensive warranties or indemnities to mitigate risk.
• Potential liability from post-completion claims if warranties/indemnities are triggered.
• Negotiations may be complex due to liability concerns.

• Can selectively acquire assets and liabilities.
• May avoid unwanted or unknown assets or liabilities.
• Lower risk of inheriting historical or existing litigation or regulatory non-compliance.

• Asset-by-asset transfers can be time-consuming.
• Higher legal, registration, stamp duty and potential tax costs

• Can sell specific assets while retaining core or strategic parts of the business.
• Allows monetisation of certain assets for reinvestment or restructuring.
• Warranties, indemnities and terms can be tailored for each asset.

• The sale price may be lower due to a selective asset purchase.
• Asset-by-asset transfers can be time-consuming.
• Employees don’t automatically transfer — possible claims.
• May retain certain liabilities not assumed by the buyer.
• Tax implications vary by asset.