Purchased Assets
Essential Question:
What is being bought and sold?
In Brief:
The list of what’s being bought and sold.
Could be a laundry list of everything associated with the business or a targeted, specified list of assets.
Review to ensure that what’s included is what you mean to sell.
Category: Explaining the Deal
What is it?
Fundamentally, all of the stuff that’s being bought and sold in the transaction. Depending on the particular business, this section could include accounts receivable, inventory, certain contracts, intellectual property, real and personal property, permits, certain rights held by the Seller, the Seller’s accounting-related books and records, and the goodwill of the Business.
When does it matter?
From the beginning. A major deal driver, the purchased assets listed form the foundation for a great deal of the rest of the purchase agreement, including the purchase price, seller consents, and beyond.
What to look out for?
If a buyer is buying everything, the purchased assets section will be a laundry list trying to capture everything associated with the business. That may mean broad definitions of assets to try to capture as much as possible. If the transaction is a carve-out deal or the buyer is only buying a portion of the assets of a business, the list should be extremely specific and targeted regarding what’s included and what’s not. Review this section carefully to ensure that the assets included are those you intend to (and are able to!) sell.
