Document Support - Asset Purchase
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08 November 2013
When you are purchasing the assets of a business you want to
ensure that you are adequately protected and you have covered all the
eventualities. This is where your team of accountants and lawyers can
assist you by preparing the documentation to ensure you are adequately
protected and you are buying what you expected.
Typically, when you are purchasing the assets of the business
you want to ensure that the following factors are covered in any
- Listing all the assets being purchased and assets which are
to be excluded.
- Valuation of any stock and clarification on ownership, any
outstanding finance, any retention of title provisions from the
suppliers (romapla clauses), whether the stock is of satisfactory
quality, condition and fit for the purpose intended.
- Restraint of Trade (Non-Compete) clauses.
- Employees that are to be transferred as part of the
agreement and resolving any outstanding employment issues.
- A list of all the machinery that is being purchased.
- A list of all the clients and suppliers.
- Transfer of any contracts to the buyer.
- Obtaining any consent from third parties as well as taking
over any respective liabilities and what shall happen if the third
parties do not give consent to the transfer of the agreements.
- Transfer of any hire purchase or lease hire agreements will
be carried out by a formal assignment.
- Any premises may need to be transferred to the buyer. If
the premises are owned by the seller this can be done by a normal
conveyance of the premises. Where a lease is involved the parties would
usually need to obtain the Landlordís consent and may have to enter
into some form of guarantee agreement with the Landlord should he
withhold consent. If there is not enough time for the lease to be
transferred the seller may issue a licence to the buyer, so as to give
an extension of time in relation to obtaining the Landlordís consent.
- Formal assignment of all Intellectual Property rights will
- Update of the trade mark, patent and design rights register
after completion of the transaction.
- Protection of goodwill.
- Creditors/Debtors - Responsibility for collecting debts and
paying creditors usually remains with the seller. However, the buyer
would usually want to ensure that these creditors are being paid and
the debts are being recovered, to ensure that no damage is done to the
goodwill of the business.
- Any warranties to put the buyer at ease and to extract any
information from the seller which the buyer should know.
- Payment of VAT and any taxes should also be highlighted.
Written by Muhammed Poswall
About the Author
Solicitors offer services and advice for litigation,
commercial contracts, Intellectual Property and IT legal agreements. We
are experts in commercial law with a heavy emphasis on Intellectual
Property, Internet and e-commerce law. Lawdit is a member of the
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Article Published/Sorted/Amended on Scopulus 2013-12-19 09:19:42 in Legal Articles