Are you looking to buy or sell business property or a company’s assets?
At TV Edwards, we specialise in guiding both buyers and sellers through Asset Purchase Agreements (APA). Our expert commercial solicitors make the transaction process fast, straightforward, and hassle-free, with reduced risk for both parties.
Whether you’re acquiring business property, inventory, machinery, goodwill, or intellectual property, our business asset solicitors provide end-to-end support, from contract drafting to secure payment structuring.
First-class, affordable legal support with award-winning service.
Buying Business Assets vs. Business Shares
Buying Business Assets is fundamentally different from buying business shares. In a business asset purchase, the buyer only acquires the specific assets they choose (such as equipment, stock, leases, or contracts) from the seller’s company.
Crucially, the buyer does not automatically inherit the seller’s historical liabilities, such as unknown tax debts or legal claims. This allows for a clean break and significantly limits the buyer’s risk exposure.
An APA can be advantageous to both buyers and sellers by allowing strategic transactions of assets:
- Seller: Can retain non-core assets (like excess cash or specific investment properties), utilise tax losses within the selling entity, and avoid giving broad legal warranties about the company’s full history. They can also sell only a specific division or product line while keeping their core business intact (e.g., selling the assets of their restaurant franchise while retaining the holding company that owns the original real estate)
- Buyer: Can ‘cherry-pick’ the best assets and legally exclude the seller’s historic liabilities (the core benefit). They can also claim better future tax depreciation on the acquired assets (known as a ‘step-up’ in basis) and restructure the workforce with greater flexibility if desired.
In business asset, property, or corporate transactions, an Asset Purchase Agreement (APA) must be followed. This involves legal drafting to clearly define asset values and what assets are included in the transaction, as well as allocating future liabilities.
Our Step-by-Step Process for Buyers & Sellers
Our commercial solicitors guide you through every stage of the Asset Purchase Agreement (APA), ensuring a quick, compliant, and efficient transaction from initial negotiations to final completion, whether you are purchasing or selling assets.
Initial Consultation and Structuring:
During our initial consultation, our experts work with you and your financial advisors/accountants to confirm that an Asset Purchase Agreement is the most task-efficient and risk-appropriate method for your objectives.
Once confirmed, we assist in drafting the Heads of Terms. This is an initial, non-binding document that sets out the key commercial terms: the purchase price, the payment structure, and the list of core assets to be sold.
Due Diligence
Following this, for our client’s purchasing business assets or property, our solicitors conduct a thorough legal investigation (due diligence) into the selling entity.
This involves a risk assessment that aims to uncover any potential undisclosed or potential risks before buyers are legally committed to a transactional contract.
While specific checks vary depending on the assets in the transaction, we review:
- Lease/Property Status: Confirming the commercial lease is valid and transferable (when buying business property).
- Contract Validity: Reviewing supplier, customer, and trade agreements where contracts are sold.
- Litigation Checks: Identifying any current or pending legal disputes.
Drafting the Asset Purchase Agreement (APA)
Our commercial asset solicitors draft the APA, with a clear asset apportionment outlining the specific assets being purchased (such as goodwill, fixtures, stock, IP).
The APA will detail the value officially apportioned to each asset category, which is important for tax purposes. Our team will negotiate warranties on your behalf and clearly define the indemnities to provide a guarantee that the seller will cover any liabilities that arise before the sale date.
Our contracts will review Deposit and Exchange, and flexible payment factors.
If Employee Matters Are Involved:
If employees are being transferred with the assets, we ensure full compliance with TUPE regulations (Transfer of Undertakings Protection of Employment), protecting employee rights and managing the legal aspects of the transfer for both parties.
This is considered one of the most complex areas of an asset purchase, requiring expert advice to manage employee entitlements, consultations, and potential claims. As award-winning business asset solicitors, we offer straightforward, stress-free support throughout this process.
Completion and Final Transfer
On the agreed completion date, the final funds are transferred, and the legal transfer of asset ownership, including the assignment of the commercial lease and ownership of other assets.
We ensure the seller provides all agreed-upon documents (business accounts, guarantees, warranties, etc.) to guarantee a smooth operational handover.
Get Started with TV Edwards
If you are looking to purchase or sell business assets or company property, we can provide expert support no matter what stage you are at. As an award-winning solicitor business, ranked in The Times Top 100 law firms, we offer first-class, affordable legal support.
Get in touch with our friendly experts to find out how we can help.
What Can Be Bought/Sold in a Business Asset Purchase Agreement?
Tangible Assets:
Physical items required for the operation of the business. The sale includes the physical transfer of the items and title.
This can include business property and leaseholds, fixtures and fittings, machinery and equipment, as well as raw materials and finished goods inventory.
Intangible Assets:
This can include intellectual property such as trademarks, copyrights, trade secrets, as well as goodwill assets, including brand names and digital assets (domains and social media accounts).
The sale of intangible assets through APAs allows buyers to acquire critical brand value and proprietary knowledge and sellers to retain the corporate legal shell without the direct sale of shares.
Contracts and Operational Rights
These are the agreements and rights needed for the continued operation of the business. Contracts such as those with major clients and suppliers can be sold in APAs, along with transferable operating licences and permits.
Why Choose TV Edwards?
Choosing the right legal partner for an Asset Purchase Agreement (APA) is essential to make the purchase or sale process clear and straightforward.
At TV Edwards, we simplify the process, providing fast, practical solutions so you can focus on running your business, not legal paperwork.
For buyers, we conduct forensic due diligence to vet the assets and commercial viability, ensuring you truly get the clean break an APA promises. For sellers, we draft agreements that clearly define your responsibilities, ensuring you achieve a clean exit and are fully protected against future liability.
We have over 95 years of experience handling commercial and business legalities; we are renowned nationwide for the quality of our legal services that are delivered with professionalism, clarity, respect, and care.
Contact Our Business Asset Solicitors
Interested in our business asset legal services? Our large team of expert solicitors has the expertise to support you throughout your acquisition or sale process.
We take time to explain things clearly and take a collaborative approach to ensure the best possible outcomes for every client.
Get in touch with us today to discuss your requirements and find out how we can help.
Purchase Business Assets FAQs
How long does the business asset purchase process usually take?
The timeline varies significantly depending on the complexity and scope of the assets. A straightforward asset sale can take 4 to 8 weeks from initial agreement to completion. More complex deals involving multiple leased properties, extensive Intellectual Property (IP), or intricate employee transfers can take 3 to 6 months.
What categories of assets are typically included in the Asset Purchase Agreement (APA)?
The assets are generally categorised under four main headings: the goodwill of the establishment, its fixtures and fittings/equipment, the lease, and the stock.
Software, intellectual property, social media, and employees will also be subject matter of the contract if applicable.
How is payment for the business assets usually structured?
The consideration payable will be reflected in the contract with reference to a timescale. The usual course will include a payment of a 10% purchase deposit on exchange of contracts and the balance on completion.
However, a single lump sum followed by regular instalments is also a common occurrence that may have been agreed between the parties.
How are existing business liabilities and book debts handled in an APA?
The Seller and the Buyer each will provide an indemnity to the other for business liabilities. The Seller will be responsible for the business liabilities up until the sale date, and the Buyer will be responsible for the business liabilities from the sale date.
The book debt of the business will not ordinarily pass to the Buyer unless agreed otherwise.
Who Can Buy Business Assets or Company Property?
In an Asset Purchase Agreement (APA), the buyer is purchasing specific items, not the corporate entity itself. Therefore, the buyer can be:
- Another Limited Company: This is the most common scenario for strategic acquisition.
- A Sole Trader or Partnership: An individual or partnership purchasing assets to start or expand their unincorporated business.
- A Private Individual: An individual may purchase certain assets for personal use or to start a new venture as a sole trader. For instance, buying machinery, inventory, or the goodwill of a small local shop.
- A New Legal Entity: A company that is formed specifically for the purpose of purchasing the assets.
