The Miller Law Firm, P.A. can help buyers and sellers draft and review the asset sales agreements, and can help finalize the terms of sale.  Also, in the event that there is a dispute over the sale, we can help represent parties in court to obtain the proper legal remedy.

What is a “sale of assets?”

A “sale of assets” refers to a sale in which a business entity sells some or all of their assets. These may include the sale of tangible items such as merchandise or property. More often, a sale of assets involves the sale of non-physical goods, such as copyrights, patents, licenses, and stock holdings.
A business organization may choose to sell only some of their assets in a separate sale instead of selling all of the assets together. However, most sales of assets occur as a part of the business merger and acquisition process. For example, one business may purchase another business in an acquisition. The acquisition process implies that all of the assets of the business being sold are being transferred in whole to the purchasing company.

What Types of Business Assets Can Be Sold?

Generally, any type of asset held by a business can be sold, so long as the sale itself is legal. Depending on the type of business form, the consent of the owners and/or shareholders of the business selling the assets may also be required for a sale of assets. The following are usually the subject of a sale of assets:

  • Real property such as the building where the business is located
  • Other kinds of physical property, such as equipment, fixtures, furniture, and machinery
  • Non-physical items, including business names, patents, copyrights, trademarks, permits, insurance policies, contracts, and future interests
  • Stocks, trust funds, and other types of securities

Are There Any Special Considerations for a Sale of Assets?

Yes. A sale of even a few assets can be extraordinarily complex, especially if the assets have a high market value. Whenever a sale of assets is to take place, the businesses involved will usually come up with a “sale of assets” agreement.  This type of agreement is a business contract stating:

  • How the sale will be organized and conducted
  • Which assets will and will not be transferred
  • How the buyer will fund the payments
  • Details regarding shareholder approval, if necessary
  • Provisions regarding the debts and liabilities of the selling company

If the sale of assets is occurring through an acquisition, the agreement is usually known as a “broad transfer” agreement or provision. This type of agreement states that the company being acquired is transferring all of their assets in full to the buying company. Some other considerations that the parties must keep in mind during a sale of assets include: tax and gift tax laws, shareholder laws, and rules regarding non-sale clauses. Call the Miller Law Firm, P.A. today at (864) 527-0413.