In practice, it is not uncommon in the real estate market for the owner of real estate (apartments, residential buildings, land plots, including rights to land shares (shares), commercial real estate objects) to be a legal entity rather than a natural person — a private enterprise, limited liability company, financial institution, bank, or other legal entity.

In such cases, the transaction may be formalized as an asset deal—that is, the purchase of the real estate property itself, owned by a legal entity.

In addition, transactions are concluded on the market for the acquisition of a business (company) that owns or uses (leases) real estate. In such cases, the relevant property is transferred to the buyer indirectly — together with the acquisition of corporate rights, with all the rights, obligations, and legal consequences arising in connection with the company’s activities. This type of transaction is referred to in legal practice as a share deal.

In this regard, buyers and investors have legitimate questions:
Are asset deal and share deal agreements risky?
Is it safer to purchase real estate exclusively from sellers who are natural persons?
Is it possible to completely avoid risks when purchasing real estate or a business?

The answer to these questions is clear: risks always exist, regardless of whether we are talking about an asset deal or a share deal, the primary or secondary market, new construction, a purchase from an individual, the acquisition of real estate from a company, or the purchase of a company that owns or leases real estate.

Legal nuances, subtleties, and potential problem areas are present in every transaction.
The difference lies solely in whether they will be identified, analyzed, and taken into account before the contract is concluded, or whether they will become the basis for disputes and losses after the transaction is completed.

When concluding asset deal or share deal transactions, a comprehensive legal review is conducted, the scope and content of which depend on the specifics of the particular property, the company structure, the history of asset acquisition, and the terms of the planned transaction.

The list of checks is not exhaustive and is tailored individually for each customer (buyer/investor). Below are the main areas of verification that are applied in practice.

(especially relevant for share deals)

This section involves analyzing the company’s financial, tax, and personnel documentation in order to identify potential risks that may be transferred to the buyer along with corporate rights.

In particular, the following shall be subject to analysis:

• financial statements, company balance sheet;

• tax returns and attachments thereto;

• recording tax liabilities;

• documents confirming payment of taxes, fees, and mandatory payments;

• personnel records, labor relations;

• compliance of reporting with actual economic activity.

(key block for Share deal)

The following are checked:

• statutes, resolutions, minutes, appointment orders;

• powers of management bodies;

• corporate structure and ownership structure;

• founders and ultimate beneficial owners.

A separate check of the company is carried out using the Unified and State Registers, including the use of more than 40 verification databases (register of court decisions, register of debtors, enforcement proceedings, seizures, mortgages, sanctions lists, etc.).

(applicable to both asset deals and share deals)

This section checks:

• ownership of real estate;

• history of acquisition of the property;

• existence of encumbrances, seizures, prohibitions;

• judicial and enforcement proceedings relating to property;

• related parties (founders, owners, beneficiaries).

Particular attention is paid to objects acquired through:

• participation in electronic auctions (Prozorro, SETAM);

• satisfaction of the mortgagee’s claims;

• sale of mortgaged or pledged property.

(Asset transaction / Share transaction)

This unit includes:

• negotiations with the seller, notary, lawyers, and the seller’s accounting department;

• control over the formation and changes in the authorized capital;

• drafting real estate purchase and sale agreements or corporate rights agreements;

• preparation of transfer and acceptance documents;

• drafting decisions, minutes, statements, ownership structures;

• preparation of documents for state registration of changes;

• organizational issues (accounts, currency equivalent, deadlines).

Lawyer / attorney:

• participates in the signing of contracts at a notary public;

• performs a final check of documents;

• monitors the legality of settlements;

• checks the transfer of corporate and accounting documents;

• controls changes to the Unified State Register and the registration of ownership rights in the State Register of Property Rights.

Conclusion

Regardless of whether the format chosen is an asset deal or a share deal,
purchasing real estate from a company or acquiring a company with real estate is a complex, multi-level legal procedure that requires professional legal assessment at every stage.

It is precisely a comprehensive legal review that allows you to minimize risks, identify problematic aspects in a timely manner, and make an informed decision about the advisability of concluding a transaction.

If you are planning to purchase real estate from a company or acquire a business with real estate, it is recommended that you seek professional legal (attorney) review before signing any documents.

We provide legal (attorney) services for checking companies and real estate throughout Ukraine, taking into account the specifics of each particular transaction.

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