Asset purchase agreements are used to transfer all of a business’s assets without transferring the ownership of the entity itself. This agreement will finalize all the terms and conditions related to the purchase and sale of a company’s assets. With an asset only sale, the buyer only obtains the assets of a company, but not the legal entity or the liabilities of the business. You can structure an asset sale so buyer picks and chooses which assets the buyer wants to obtain. You can do this to avoid depreciable assets or high-risk properties that may be subject to future liability. A business lawyer working with asset purchase agreements can help you easily. At Riviere Advocacy Group, we have a team of business lawyers to solve your queries related to asset purchase agreement. Talk to our lawyers now!
In this type of sale, the aim is to take all of the good working components of the business and leave all of the negative components behind. Hence, the seller usually will maintain ownership of the long-term obligations of the company. Asset sales can equal higher taxes for the seller. Intangible assets (intellectual property) are taxed at capital gains rates and tangible (trucks, office equipment etc) assets can be subject to higher ordinary income taxes. For buyer an asset sale is attractive because tax benefits may include allocation values for assets based on their depreciation.
Issues in Transferring Assets
Certain assets can be difficult to transfer due to issues of ownership issues, assign-ability, and third-party consents. Mostly, it includes intellectual property, corporate contracts, certain leases, licenses, and permits. While in most cases an asset sale will include the trade name of the previous business. It is important to make sure it is present and that the seller’s name brand recognition will not lost in the sale.
This is just three paragraphs of information about an asset only purchase agreement. A call to one of our lawyers, should be in short order when considering such an agreement. Just below we have provided a sample Contract for the sale of business in New Jersey. This is just a template to show how you can structure a transaction. You will still need to contact a business law attorney to help you structure your specific business sale or purchase.