Asset Purchase Agreements
Our commercial property solicitors deal with all aspects of asset purchase agreements (APAs). Whether you need advice, you want a solicitor to draft an agreement, or you want to negotiate the terms, we can help. We act for both buyers and sellers of commercial property.
For a free quote, call us on 0191 567 7244 and we’ll be happy to help you.
What is an asset purchase agreement UK?
An asset purchase agreement sets out the terms and conditions relating to the sale or purchase of a company’s assets. It details exactly what assets are to be sold and at what price. This might include tangible assets, such as land, machinery, buildings, equipment and stock. It might also include intangible assets, such as goodwill, intellectual property and customer lists.
The assets and liabilities not included in the agreement remain with the seller. This means that an asset purchase agreement may be used to sell all or part of a business.
Asset purchase agreement vs share purchase agreement
An asset purchase agreement is different to a share purchase agreement. A share purchase agreement sets out the terms and conditions relating to the sale or purchase of a company’s shares.
Each option has its own advantages and disadvantages. With an asset purchase, the buyer can pick and choose which assets and liabilities they wish to take on. However, some assets may not be up for sale, or may require the consent of third parties.
On the other hand, a share purchase is more straightforward and may incur a lower tax liability. However, the buyer assumes responsibility for the company’s debts. It also comes with less flexibility.
The right option for you and your company depends entirely on the circumstances. We deal with both asset purchase agreements and share purchase agreements.
Is an asset purchase agreement legally binding?
An asset purchase agreement is legally binding, so it’s vital to get the terms and conditions right. The buyer’s solicitor drafts the asset purchase agreement, but the seller may instruct their solicitor to negotiate on certain points. It should only be signed once both parties are confident that the commercial, tax and legal elements have been properly addressed.
What should be included in an asset purchase agreement?
Typical provisions in an asset purchase agreement include:
The agreement to sell and purchase assets
The price at which assets will sold and purchased
How and when the purchase price is to be paid
Whether regulatory or third party approvals are needed
Arrangements for completion
Matters relating to employees
Every asset purchase agreement should be tailored according to the circumstances. The exact assets to be sold – and their purchase price – will obviously be unique. The disclosure process may also shed light on potential issues that require careful consideration. For example, there may be a risk of a potential future liability. If so, the seller should request indemnities to ensure they are reimbursed for any losses by the buyer.
Because of these nuances, it is essential to get an asset purchase agreement drafted by a legal professional.
Who prepares the asset purchase agreement?
The buyer’s solicitor prepares an asset purchase agreement. The seller’s solicitor revises the agreement and advises their client on the terms and conditions. Both sides may then negotiate on the terms until a final agreement is reached.
How can we help you?
Our commercial property solicitors represent both buyers and sellers wishing to enter into an asset purchase agreement.
We act on a fixed fee basis. This starts with a free initial consultation. Contact us to discuss your requirements. Afterwards, we provide a fixed fee quote with no hidden charges.
We can discuss the pros and cons of both asset purchase agreements and purchase share agreements with you, helping you determine the right fit. If you want to proceed with an asset purchase, we can carry out due diligence to uncover the risks, using this information to draw up a comprehensive agreement that protects your best interests.
As the seller, we can help you negotiate the terms and conditions. These transactions are associated with legal, tax and commercial risks. You need to be fully aware of these before committing to the sale.