Excluded Assets
Essential Question:
What’s not part of the deal?
In Brief:
It’s not just everything not listed in Purchased Assets.
Don’t assume that you’ll still have access to anything after close – specify what you want excluded.
Let your attorney know what’s important to you.
Category: Explaining the Deal
What is it?
This is all of the stuff that’s not included in the deal. The lazy way to think about it is “If it wasn’t included in the purchased assets…” – but that doesn’t capture the full picture.
When does it matter?
You don’t want to accidentally sell anything you didn’t intend to sell. And while it may seem obvious on the surface what’s included with the business and not, especially if you’re selling everything, it’s usually more complicated than that. For example, perhaps the company has been buying your personal vehicle. Or perhaps there’s real estate that’s owned by the company that’s not part of the purchase.
What to look out for?
Identifying assets to be excluded in the purchase agreement is a critical place to be in contact with your counsel. Let them know what’s important to you, any assets that may look like they’re part of the business but actually aren’t. Walk through an inventory of your business, of your office. Think about the knickknacks, the personal effects, the painting on the wall, everything that has some meaning to you or that you expect to be able to continue to have access to after close. Make sure those things are explicitly excluded.
