Business Asset Purchase
A purchase of business assets is often the purchase of a whole business or one or more units of a business “as a going concern” and will include the goodwill of the business Depending on the nature and structure of the business or business unit being purchased you may also be taking on staff and or premises as well.
In fact in most situations where a business that includes staff is purchased as a going concern the Transfer of Undertaking (Protection of Employment) Regulations (“TUPE Regulations”) will mean that the staff are entitled to move with the business to the new owner. These regulations bring with them some detailed and complex procedures to be followed in order to avoid claims from the relevant employees.
Where the seller has run the business either as a sole trader or a partnership an asset purchase of this type will be the only way for you to buy the target business. However, even where the seller is a company it may be advantageous for you to make an asset purchase of the relevant business. This will usually be described as a purchase of the business and its assets “as a going concern”. One of the advantages of this approach for you as a buyer is that you generally take on very few of the pre purchase liabilities of the business or its previous owner, and in particular you will not take on any tax situations relating to the seller. This tends towards a shorter and simpler due diligence process.
As mentioned above, you will be required to accept the transfer of relevant employees, though in practice there will be a number of factors which impact on whether and how many employees will in fact transfer with the business, such as: your location; whether the seller wishes to retain some of the employees and whether or not the individual employees in that case prefer to stay or to transfer with the business.
One issue on which an Asset Purchase is not quite as “neat” as buying the whole company is that you and the seller will need to arrange appropriate transfers or replacements of all of the relevant supplier and customer agreements. Sometimes this involves getting the consent of suppliers or customers. This can be an important issue to explore in the due diligence part of the process, to ensure that no supplier or customer has an effective power of veto over your deal.
Why Choose Huntley Legal?
Our clients tell us that they value our supportive and straightforward service and particular the fact that we manage delivery times well. We have the expertise to ensure that you are made aware of and advised on the various legal issues and risks involved in a business asset purchase. You can also be reassured that we know the importance in this type of deal of working effectively with our clients’ financial and tax advisors.
We understand the importance of managing this process efficiently and effectively with a keen eye on the time and the costs. We make sure that wherever possible our service is supported by the proper use of technology to keep costs down and keep the transaction moving along.
If you would more information about how we can help you to structure the right deal when you are looking purchasing business assets, (whether as a “going concern” or just a selection of assets) please do get in touch with us today.
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To discuss your legal needs, please call Marie Huntley on 020 3609 8764.
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