Business Sales and Purchases

Asset Purchase

It is only the assets and liabilities which are identified and the buyer agrees to purchase which are transferred. It is often  more complex process than a share purchase.

If the buyer wishes to purchase only part of the business, an asset purchase is often the preferred method. The other advantage is that liabilities which are difficult to quantify or too onerous, do not have to be transferred to the buyer.

Contracts are not automatically transferred with an asset purchase (save employment contracts) so care needs to be taken by both parties that the necessary and desired contracts are in fact transferred to the buyer. The tax treatment of the transfer also needs to be looked into very carefully by both parties.

If you are considering growing your existing business by purchasing the assets of another, please contact our Commercial Team today.