Asset Purchases

Borneos has considerable expertise in guiding our clients through both company share and business asset transactions, all the way from small owner-managed businesses up to multimillion pound group companies. We understand the commercial realities that you face, as well as the legal issues that complex corporate transactions entail.

The first important decision in any transaction is whether the company itself is going to be acquired through the purchase of its shares, or whether the company will remain with the existing shareholders and instead sell the assets it uses to operate its business, often to another newly formed company. The choice depends on numerous factors, not least the tax implications for both parties.

In theory purchasing the assets of a business rather that the shares of a company allows the purchaser to select the parts it wants, such as the name, goodwill and contracts, and to leave liabilities behind. There are however a number of issues and different areas of law which need to be considered.

Firstly, there is the effect of the TUPE legislation regarding the transfer of employees. Where a business is transferred as a going concern, the employees will transfer with it on their existing employment contracts. They must be properly consulted about the changes. It is important for both the vendor and the purchaser to take advice about the employment law issues in the early stages of the transaction.

It is also vital to establish the validity of the contracts the vendor is proposing to transfer. Very many commercial contracts, particularly lease hire agreements, require the written consent of the other party before they can be assigned. Where freehold or leasehold premises are transferred as part of the business, both sides will also require specialist property law advice.

It is usual to include some restrictive covenants, preventing the vendor from setting up in competition with the purchaser. The sale and purchase agreement will also usually contain warranties, but these will not necessarily be as extensive as with the purchase of a company.

 

 

If you would like to discuss how we might help you, please:

 

• call any of our office numbers listed at the bottom of this page;
• contact one of our specialists direct by clicking on their name below; or
• complete our enquiry form
  

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Members of our team specialising in this area:

Ken Borneo, Antony Hopgood, Andrew Kerr, Kirsten Rimmer, Mark Thompson

Ian Jenkinson, David Pilgrim