In a merger or acquisition transaction, asset purchase agreements have a number of advantages and disadvantages in relation to the use of a share purchase agreement or a merger agreement. In the event of a share acquisition or merger, the buyer receives all the assets of the target, without exception, but also automatically assumes all the liabilities of the target. An asset acquisition contract not only allows a transaction that transfers only a portion of the assets (which is sometimes desired), but also allows the parties to negotiate what liabilities of the target are explicitly borne by the buyer and allows the buyer to leave behind liabilities that he does not want (or does not know). One of the drawbacks of an asset sale contract is that it can often result in more control changes. For example, contracts entered into by a target company and acquired by a buyer often require consideration in an asset contract, when it is less common for such consent to be required in the context of a share sale or merger agreement. An asset repurchase agreement (APA) is an agreement between a buyer and a seller that concludes the terms and conditions for the purchase and sale of a company`s assets. [1] [2] It is important to note in an APA transaction that it is not necessary for the buyer to purchase all of the company`s assets. Indeed, it is customary for a buyer to exclude certain assets in an APA. The provisions of an APA may include payment of the purchase price, monthly payments, pawn and asset charges, closing condition, etc. [3] An APA is different from a share purchase agreement (SPA) in which business shares are also sold, ownership of assets and ownership of liabilities. [2] In an APA, the buyer must choose certain assets and avoid redundant assets.

These facilities are broken down according to an APA schedule. The buyer in a SPA buys shares in the company. In this case, there is no need to revalue the transfer of ownership of the company. The APA is the legal mechanism for merging or acquiring businesses. [1] The agreement may also mention that all disputes arising from the agreement fall within the exclusive jurisdiction of a particular jurisdiction. These agreements are non-refundable and non-transferable. If you need changes or questions, please contact us before you download. By clicking on the button below, I agree with the terms and conditions of sale. The oil and gas industry does not distinguish between an asset and the purchase of shares when it designates its corresponding sales contract. In this sector, whether it is the purchase of assets or shares, the final agreement is called the Purchase and Sale Contract (PSA).

The transfer of businesses (employment protection) (TUPE) protects the rights of workers in the event of a transfer of assets from a company. The basic principle of TUPE is that when a seller buys the company`s assets as a “current business,” the employees of that company are automatically transferred to the buyer. On this basis, the buyer and seller must contact the relevant staff at an early stage. An asset transfer contract, also known as an asset acquisition contract, a capital transfer contract, is a contract that concludes the terms of the purchase and sale of assets of a company. In the case of an asset sale, the company`s assets are transferred to a new owner without the actual ownership of the business being transferred. Instead of acquiring all the shares of a company, and therefore both its assets and liabilities, a buyer very often prefers to take over only certain assets of a company.