The essence of this agreement is that seller gives no warranties so the buyer has little protection. What he sees is what he gets. The reason for the sale is not relevant.The document is not the sale of a business as a going concern but of assets in a "break-up" situation.For example, it might be used to sell:plant and equipmentintellectual property such as a customer list or copyrightstockExamples of use might be:for a “hive-down” or any other sale by a liquidator or administrator or trustee in bankruptcya private sale where the seller will not give any warrantyto record an inter-company transfer within a group of companies - to distribute profit where you want it to arise or where a subsidiary is merging with its holding company.where a business owner is closing a business
Purchase of business assets or hive-down
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About this document
The most important feature of this agreement is that the seller gives no warranties. Risk for the assets bought is taken entirely by the purchaser.
It can be used for the sale of any type or combination of types of assets including machinery and equipment, stock, and work in progress. The only type of asset which it cannot transfer is real property (land and buildings), for which the involvement of a solicitor is required by law.
The document could be used in many situations, including the following:
- A hive-down, where assets are disposed to a company, possibly a shell, in order for the shares in that company to be subsequently sold. It may be more tax efficient for the ultimate buyer to purchase the assets within a company structure rather than as assets by themselves, yet he or she may not want the obligations or the history of the original business.
- A hive-up, where assets are bought by a parent business in order for the subsidiary to be sold separately or liquidated.
- A sale by a liquidator or administrator or trustee in bankruptcy.
- The owner of an unincorporated business wishes to sell assets so that he or she can move to another area, close the business or change the strategic direction of the business.
- The owner of insurance re-claimed or fire-damaged goods wishes to sell them as seen.
- A person is declared insolvent and the receiver is selling the assets as per order of the court.
- The counter party – the acquirer – may be any person, business or other organisation.
Features
This agreement is written in plain English, and is drawn for maximum flexibility and ease of use.
Key features are:
- one step completion - buyer makes payment and take possession of goods
- is not specific to any particular industry
- can include sale of intellectual property
- includes only the most basic warranties
- provides options for payment
- allow you to construct commercial terms to suit your exact business needs
- includes practical and commercial help and suggestions
Alternative documents for slightly different situations
If you are only selling heavy physical assets then use this agreement for the purchase of used plant or physical assets. It provides for transportation and delivery.
If the assets are intellectual property, an IP sale agreement may be more suitable.
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Recent reviews
Just what I needed as a starting point or template to adapt to suit my needs.
Dean Bennellick
Review of the United Kingdom version
Good!
John Cipollone
Review of the Australian version
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