What an Asset Sale Involves

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An asset saleĀ involves the sale of all of the assets owned by the entity which controls the business.

The assets being sold in the transaction include fixed assets, land, plant and equipment, work-in-progress, stock and intangible assets including goodwill and intellectual property.

The sale will not include Debtors as the debtors and creditors are usually the responsibility of the Vendor. The assets being sold will be identified in the sale agreement. All businesses will be owned by a either a partnership, sole trader, a company or a trust.

In an Asset Sale the purchaser will not be buying the company or the trust, the purchaser will acquire only the business assets. Therefore the purchaser will not be liable for any debts or liabilities that the previous owner, company or trust may have acquired. In an Asset Sale the purchaser will (usually) buy a business that is unencumbered.

The Asset Sale is the most common form of business sale transaction, and the commonly used contract to document the terms of the transaction is the REI Standard Contract.

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