Asset & Business Transfer Agreement (APA)

Legal Basis

CCC (sale of goods & assignment of rights), Revenue Code §77/1(8) on business transfer VAT, Labor Protection Act §13 (employee rights on employer change).

Who Needs This

Buyers cherry-picking assets to avoid hidden liabilities and sellers divesting a business unit without dissolving the company.

Required Documents

• Asset register (fixed assets, inventory, IP, contracts, receivables)
• Counterparty consent letters
• Employee list with tenure and accrued entitlements
• 60-day creditor notice (Bankruptcy Act §74)

Common Pitfalls

• Transferring staff without written consent violates §13 and triggers unfair-dismissal claims
• Entire-business transfer 0% VAT requires 15-day pre-registration or full 7% VAT applies
• Failing to migrate sector permits (Factory Act, FDA, BOI) blocks day-one operations

Typical Use-cases

• Carving out a hotel unit for sale to a REIT
• Buying 12 restaurant outlets as an asset deal to avoid the seller's unpaid rent liabilities
• Migrating IP portfolio and customers from a wind-down entity into a newco

FAQ

How is this different from an SPA?

SPA buys shares (all liabilities included); APA buys selected assets — seller retains legacy debt.

Can employees refuse the transfer?

Yes. §13 requires consent; refusal obliges the old employer to pay severance.

Must we notify creditors?

Yes, to defeat the 1-year clawback risk under Bankruptcy Act §237.

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