Not every owner wants to give up everything at once. A partial sale can bring capital for growth, bring an experienced partner on board or spread your own exit over several years. For this to succeed, control, valuation and exit rules must be structured carefully. This article shows what matters when selling company shares. For a full sale, read our guide Selling a business.
Why do owners sell only part?
| Motive | Typical solution | Example |
|---|---|---|
| Liquidity and risk diversification | Minority sale | Owner secures part of their wealth but remains majority owner |
| Financing growth | Minority or majority to an investor | Capital for acquisitions or expansion |
| Staged succession | Majority sale with an option on the rest | Owner remains on board for a few years |
| Gaining a partner | Strategic partner acquires shares | Access to markets or technology |
| Retaining management | Equity participation for executives | Preparing a later MBO |
Minority or majority: what is the difference?
| Criterion | Selling a minority (below 50%) | Selling a majority (above 50%) |
|---|---|---|
| Control | Remains with the owner | Passes to the buyer |
| Price per percent | Usually at a discount | Usually with a control premium |
| Interested buyers | Fewer, often financial investors, family offices | Strategic buyers, private equity, family offices |
| Your role afterwards | Entrepreneur as before | Managing director with a partner, or transition |
| Future | Further sales remain open | Often an option on the remaining shares |
Why is a stake not simply worth its pro rata share?
If you sell 30 percent, you usually do not receive 30 percent of the business value. The reason is control. As Rödl & Partner explains, the pro rata value of a majority is higher than that of a non-controlling stake (control premium). Conversely, minorities are valued with a discount for lack of control. In Rödl’s example, a buyer of 20 percent of a company with an equity value of €10 million does not pay the arithmetical €2 million.
| Factor | Increases the value of a minority stake | Reduces the value |
|---|---|---|
| Say in decisions | Veto rights on important decisions | No consent requirements |
| Distributions | Fixed distribution policy | Profits stay in the company |
| Exit opportunity | Tag-along, put option | No route to a sale |
| Information | Regular reporting | Little insight |
The more rights a minority stake carries, the smaller the discount. These rights are negotiated in the shareholder agreement. For the methodology, see Business valuation.
Which rules belong in the shareholder agreement?
A partial sale creates a new partnership. The most important rules at a glance:
| Clause | Meaning | Who benefits |
|---|---|---|
| Tag-along (co-sale right) | Minority may sell alongside on the same terms if the majority sells | Minority shareholders |
| Drag-along (co-sale obligation) | Minority must sell alongside in a full sale | Majority shareholders, investors |
| Pre-emption right | Shareholders may acquire shares first | Existing shareholders |
| Call option | Buyer may later purchase the remaining shares at a set price | Buyer |
| Put option | Seller may later tender the remaining shares | Seller |
| Leaver rules | Rules for departure, e.g. upon termination | Both sides |
| Reserved matters | Important decisions require everyone’s consent | Minority |
According to Rödl & Partner, co-sale rights give shareholders the opportunity to join a planned sale. The co-sale obligation, by contrast, makes a full sale possible if no agreement is reached. Founders and owners should negotiate high consent thresholds and minimum valuations for this.
What does a staged exit look like?
A proven model for succession is selling in stages:
| Phase | Owner’s stake | Owner’s role |
|---|---|---|
| Today | 100% | Owner and managing director |
| Stage 1: majority sale | e.g. 30% | Managing director, know-how transfer |
| Stage 2: exercise of the option | 0% | Advisory board or complete withdrawal |
The advantage: the buyer gets to know the company alongside the owner, and the owner benefits from further development through the remaining stake. The price for the second stage should be set as a formula, for example as a multiple of earnings at the time of exercise. With financial investors, rollover equity is common, see Selling to investors.
What applies legally depending on the legal form?
The following overview refers to German law.
| Legal form | Transfer | Special feature |
|---|---|---|
| GmbH | Notarised assignment under § 15 GmbHG | Transfer restriction (Vinkulierung) possible in the articles |
| AG | Assignment or delivery of the shares | For registered shares, entry in the share register |
| GbR, OHG, KG | Assignment of the partnership interest | Consent of the other partners under § 711 BGB |
For the GmbH, the University of Erlangen-Nuremberg describes the principle of free transferability, which can be restricted by the articles of association. For partnerships, since the German Act on the Modernisation of Partnership Law (MoPeG), the consent of fellow partners has been governed by § 711 BGB. Details on selling a GmbH can be found under Selling a GmbH.
How are partial sales taxed?
The following rules apply in Germany.
| Sale of | Tax treatment |
|---|---|
| GmbH shares held privately (from 1%) | Partial income method: 60% taxable |
| GmbH shares held via a holding company | § 8b KStG: 95% tax-exempt |
| An entire interest in a partnership | § 16 EStG, from age 55 allowance and reduced rate possible |
| Part of an interest in a partnership | Ordinary income under § 16 (1) sentence 2 EStG, no tax relief |
Sources: Lohnsteuer kompakt, steuertipps.de. Particularly with partnerships, a partial sale can be more expensive in tax terms than a full sale. It is often worthwhile converting into a GmbH beforehand. Your tax advisor should review this at an early stage.
Partial sale or full sale: which suits you?
| Question | Rather a partial sale | Rather a full sale |
|---|---|---|
| Do you want to remain active as an entrepreneur? | Yes, for a few more years | No, withdrawal planned |
| Do you see further potential for value creation? | Yes, achievable with a partner | Largely exhausted |
| Can you work with a co-shareholder? | Yes, partnership desired | Prefer to decide alone or hand over completely |
| How important is immediate liquidity? | Partial liquidity is sufficient | Full proceeds desired |
| Is succession already secured? | No, the partner should prepare it | Yes, or the buyer takes it over |
Typical mistakes in a partial sale
- No exit rules: Without tag-along, drag-along and options, you will later be trapped in a minority position.
- Unclear price for the second stage: Without a formula, negotiations start all over again, often from a weaker position.
- Too little say: Without a list of reserved matters, the new partner decides alone on budget, distributions and personnel.
- Overlooking taxes: With partnerships, selling part of an interest can be considerably more expensive than expected.
Conclusion
A partial sale is a powerful instrument: it brings capital, a partner and time for an orderly succession. Its success depends on the shareholder agreement. If you clearly define control, exit rights and the price for later stages from the outset, you avoid conflicts and secure the value of your remaining shares.
Sources
- M&A Vocabulary: Discount for Lack of Control und Control Premium, Rödl & Partner, February 2026
- Tag-along und Drag-along: Exit-Regelungen im Beteiligungsvertrag, Rödl & Partner, September 2019
- Veräußerung und Vinkulierung von Gesellschaftsanteilen, Friedrich-Alexander-Universität Erlangen-Nürnberg, 2026
- Kommentierung zu § 711 BGB: Übertragung und Übergang von Gesellschaftsanteilen, bgb.kommentar.de
- § 16 EStG: Veräußerung des Betriebs, steuertipps.de
- Veräußerungsgewinn: Freibetrag und Teileinkünfteverfahren, Lohnsteuer kompakt, 2025
Frequently asked questions
Can I sell only part of my business?
Yes. You can sell a minority (below 50 percent) or a majority and keep the rest. The later sale of the remaining shares is often agreed from the outset via options.
Do I get 30 percent of the business value for 30 percent of the shares?
Usually not. Minority stakes without control are generally valued at a discount, majority stakes with a control premium. The size of the discount or premium depends on the industry, the rights in the shareholder agreement and market conditions.
What is a tag-along right?
A co-sale right: if one shareholder sells their shares, the others may sell their shares alongside on the same terms. It protects minority shareholders from being left behind alone with a new majority shareholder.
What is a drag-along right?
A co-sale obligation: if the majority wants to sell the entire company, the minority must sell its shares too. This makes a later full sale possible. Minorities should negotiate minimum prices and thresholds for this.
Do I need the consent of my fellow shareholders?
For a German GmbH, only if the articles of association provide for a transfer restriction (Vinkulierung), which is often the case. For German partnerships such as a GbR, OHG or KG, the consent of the other partners is generally required under § 711 BGB, unless the partnership agreement provides otherwise.
How is a partial sale taxed?
For GmbH shares held as private assets, the partial income method applies (60 percent taxable). If you sell only part of your interest in a partnership, under § 16 (1) sentence 2 EStG this is ordinary income, and the allowance and reduced tax rate no longer apply.
What is rollover equity?
The owner sells the majority, for example to a financial investor, and reinvests part of the proceeds in the company. This allows the owner to benefit from a later increase in value at the next sale.