Complete notes covering Workshop 6 of the University of Law's M&A Elective.
- Asset Acquisitions
- Protection of Employees (TUPE Regs 2006)
- Reasons for Dismissals.
ACQ6
Asset Acquisitions (Transferring Assets and Employees)
Transfer of Assets
What should be transferred?
Aim to have a COMPREHENSIVE DEFINITION OF “BUSINESS” to cover all the assets you want
Not unusual to have separate provisions for certain types of assets (e.g. goodwill)
Include a list of assets which are explicitly excluded (if any)
Sometimes a formal transfer of an asset is not possible at completion (e.g. because consent is required by a
3rd party). In these circumstances, the SPA should provide that the SLR will HOLD THE ASSET ON TRUST for the
benefit of the BYR and that the BYR has the right to use the asset pending the formal transfer, so effectively
enabling the entire operation of the target business to transfer.
The assets that are generally considered necessary to continue the running of a target business are:
Customer contracts
Supplier contracts
Hire purchase and leasing agreements
Debts (money owed to the business by customers)
Employees
IP rights
Premises
Motor vehicles
Plant and machinery
Fixtures and fittings
Office furniture and equipment
Stock of raw materials
WIP and finished goods
Investments
Method of transferring individual assets
General considerations
Land and premises Any freehold and leasehold premises which are to be transferred will normally be listed
in a schedule to the sale and purchase agreement
The buyer will assume risk on the premises as from exchange of the agreement and
should take out insurance from this date, or, in the case of leasehold property where the
lease obliges the landlord to insure, have its interest noted on the landlord’s policy
On completion of the acquisition, suitable transfer arrangements will be put in place for
the formal transfer of the premises to the buyer
License to assign
Requesting consent: Leases are assigned using a formal licence to assign
Seller should request consent from landlord to assign as early as possible (as
often considerable delay to obtain)
s.19 LTA 1927 = gives seller redress against a landlord acting unreasonably (where
lease contains covenant not to assign without landlord’s consent, s.19 states that
landlord cannot unreasonably withhold consent)
Guarantees: Landlord will usually want equivalent guarantees from buyer as he had from
the seller
Conditional contract: Acquisition agreement may be conditional on obtaining landlord's
consent if not given by signing
Rare for seller to pass on landlord's cost of license to buyer
1
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller izalpcnotes. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $8.01. You're not tied to anything after your purchase.
