Asset Acquisition and Disposal
This term is used to describe the purchase or sale by one commercial enterprise – from or to another – of certain assets used in the operation of a business. The transaction can relate to the acquisition or disposal of an operational business as a going concern, or it can describe the sale and purchase of assets only, from one party to another.
It is important not to confuse an asset transaction with the acquisition or disposal of the entire issued share capital in a limited company or partnership. We can assist with the latter too, however, that would be a different type of transaction than is covered in this section.
Asset Acquisition and Disposal
An asset-led transaction usually relates to the acquisition or disposal of business assets by one party from another.
The purchaser will make a choice as to whether they are acquiring a whole operational business as a “going concern” from the vendor, or alternatively, if they are simply acquiring the moveable assets only.
We can assist and advise upon either approach. Generally speaking, the acquisition and disposal of assets relates to the purchase by one party from another of the equipment, the employees (if any), the goodwill, the stock and any property interest of a business. From fish and chip shops and takeaways, to bars, cafes, garages, hairdressers, hotels, manufacturing, restaurants, retail shops, salons and workshops – this firm oversees a wide variety of business concerns.
In addition to the moveable assets – chairs, computers, cutlery, desks, tables, tools and all other “bits-n-pieces” – it is crucial to consider preserving and having transferred the relevant property interest at the heart of the business’ goodwill.
How We Can Help With Acquisition and Disposal in Commercial Property?
Central to all asset-led transactions is the asset sale agreement. We will take your detailed instructions in respect of your personal and business objectives and negotiate, agree and advise you upon a suitable contract.
We can also establish the nature of the freehold or leasehold property interest of the business and advise you on the legal documentation that will be required in the purchase, sale or transfer.
Buying Commercial Assets
You need to establish that the vendor has full ownership of all assets (free of third-party claims and contract hire or lease arrangements).
You must procure assurances that the assets are in good condition and full working order – and that they are fit for purpose.
Where there is commercial property involved, it is especially important to establish that unencumbered title will be transferred to you, free of all third-party interests and/or mortgages.
Particularly in respect of leasehold property, there will by third-party landlord requirements that must be identified and upon which you should receive early advice as to costs and liability (both for the business and to your personally).
Selling Commercial Assets
It is important to ensure that the buyer is not only capable of affording the purchase price, but of continuing to meet the liabilities of the business post-completion. Certain indemnities (legal promises) must be sought that the buyer will reimburse you against any losses that you suffer after you have parted with ownership of the business assets and as a result of any purchaser’s default.
It is crucial that you have a “clean” and straightforward exit from the business in terms of liability. As above, it is necessary to make sure that any property interest (whether freehold or leasehold) is dealt with appropriately as part of the disposal.
