Asset Transfers

Transferring assets between companies can be required or desired for a number of reasons. If you are planning to carry out a transfer of assets, it is important to ensure that adequate preparation is carried out beforehand, to identify the assets properly, to consider any registration formalities, to address any restrictions on transfer and releases that might be needed, and that any transfer document is properly and appropriately drafted, so that the correct process is followed and seen to be followed for carrying out the transfer.

It may be necessary for the tax implications of an asset transfer to be accommodated, and we can ensure that your accountants’ recommendations are followed so that any transaction is suitably structured.

At CWJ, we represent companies and other businesses across a wide range of sectors in asset transfer transactions. We have a strong commercial understanding and our advice to you will be based on your business needs and aims. We will ensure that appropriate and detailed due diligence work is carried out as necessary and that your rights and interests are safeguarded.

Looking for more information? Please take a look at our asset transfer FAQs.

To discuss how our experts can help you, please contact us on 01689 887887 or fill in our enquiry form.

Our corporate and commercial lawyers can assist with…

• Asset transfers on sale or purchase of a business
• Asset transfers between companies in the same group
• Setting up a new company and transferring assets
• Transferring assets out of a company prior to sale

Our asset transfer expertise

Our Corporate and Commercial team advise company directors and business owners on the best way to transfer assets, to include ensuring that the right company and group structures are in place.

Our solicitors have a high level of experience in relation to asset transfers, to address the impact of potential liabilities arising. We are based in Orpington and work with clients in London, Bromley and across the South East and beyond.

We also advise on business sales and acquisitions, management buy-outs and buy-ins, share restructures and the acquisition of business assets from administrators and liquidators.

We are ranked for corporate and commercial work by the UK’s leading legal directory, Chambers & Partners, as one of the best in the Bromley region.

The team is headed by partner Ben Madden who is recognised by Chambers & Partners as a leading practitioner in Bromley and Sussex for corporate finance work, including in the areas of investments and acquisitions.

Our fees

We offer outstanding value for money, with an exceptional level of corporate and commercial expertise provided to our clients. Our pricing reflects the level of experience of our team members and we will ensure that you have the right lawyer for your needs. We provide a clear cost estimate at the outset with no hidden fees or charges.

Asset transfer FAQs

What is an asset transfer?

An asset transfer is the transfer in ownership of an asset such as a financial instrument, commercial property, stock, equipment or intellectual property.

Asset transfers can be a way of transferring ownership of a business. The advantage of an asset transfer when selling or transferring a business is that ownership may pass without some of the liabilities that would automatically transfer in the case of a share transfer.

By way of example, when a share transfer takes place, it is not possible to select what assets are included. With an asset transfer, the buyer can choose what they wish to purchase, and what might be left with the original owner.

With a share transfer, all of the company’s liabilities will also be transferred, which can be a disadvantage for the purchaser.

Why are assets important to a company’s value?

Assets will be used within your business to generate profit as well as increasing its ability to produce goods or services. As well as supporting the functioning of a business, assets are included on a company’s balance sheet. This can be important if a business is to be valued for sale or if it is seeking a loan for investment.

How does an asset transfer work?

The work involved in transferring an asset will depend on whether the transfer is a sale to a third party or to another company within the same group, and the transfer of certain categories of asset may require special treatment.

Asset transfer on sale to a third party

Assets may be sold because a business is being closed or because the assets are no longer needed by the business.

A buyer may want to carry out due diligence to satisfy itself as to various aspects of the asset, such as whether the seller has proper ownership of the asset.

A transfer document will be drafted and may contain a number of rights and obligations, including warranties and indemnities.

The seller needs to consider whether corporation tax will be payable if there is a chargeable gain or profit on the sale of the assets. A chargeable gain is the amount of profit made on the sale of an asset.

Calculating the size of a chargeable gain can be complex and will likely require the assistance of an accountant, to take into account valuation of the asset and allowances for inflation which might be made by HMRC. Where the disposal of business assets gives rise to a loss, these losses might be offset against capital gains on their sale, but specific advice should be taken on this.

Asset transfer company to company

Businesses sometimes want a transfer of assets from one company to another within the same company group. This could be to work within a parent-subsidiary structure to protect assets from liabilities that could be incurred by the part of the business that is involved in trade or commerce.

Assets can also be transferred to a new company that is being created, for example, to start an enterprise with different products or services.

Where assets are transferred within a group structure, there may be tax implications or benefits to consider, and specific advice should be taken on this.

Can you transfer money from one limited company to another?

Where the asset to be transferred is money, this can be done by way of a loan or by one company subscribing for and acquiring shares in the other company. If the arrangement is between one company that owns the other company, the subsidiary company (the one that is owned) can transfer money by way of dividend payments to the owner (parent).

How much do solicitors charge for asset transfers?

The amount charged for an asset transfer will depend on whether it is within a group company structure or whether it is a purchase by an outside individual or entity.

Where the asset is to be transferred within a group structure, less due diligence work is usually required.

If the asset sale is to a third party, a robust asset transfer agreement will need to be drafted protecting the seller and buyer. The solicitor representing the buyer will also need to carry out investigations into the assets, to include verifying their legal ownership.

You will generally pay an hourly rate for a solicitor with the right level of experience for the transaction, against an estimate for the work.

Do I need a solicitor for an asset transfer?

You are strongly advised to take the advice of a solicitor when dealing with the transfer of business assets. It is crucial not only to ensure that the assets are sound and that they are correctly transferred, but also that sufficient warranties, indemnities and obligations are included to protect your interests.

You should also take tax advice before proceeding with any transfer of assets, as the situation can be complex and any errors could result in tax penalties.

What does a solicitor do in an asset transfer?

A solicitor dealing with the transfer of assets will carry out due diligence work in advance of the purchase to establish that the assets are as expected. They will then draft a suitable agreement to deal with the sale.

They can manage the exchange of any funds and also deal with the registration of new ownership where necessary.

If company restructuring is involved, they will be able to draw up the necessary paperwork and ensure that the correct steps are followed, and so that correct filings are made at Companies House.

Speak to our asset transfer lawyers in Orpington, Bromley

If you are considering transferring assets from one company to another or to a third party, we can provide comprehensive advice.

To discuss how our experts can help you, please contact us on 01689 887887 or fill in our enquiry form.