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Accounts Receivable Assignment Agreement for Hong Kong

Accounts Receivable Assignment Agreement Template for Hong Kong

This document governs the transfer of accounts receivable from one party (the Assignor) to another (the Assignee) under Hong Kong law. It establishes the legal framework for the assignment of receivables, whether as an absolute transfer or as security for financing. The agreement includes detailed provisions for the transfer mechanism, representations and warranties, perfection requirements, and ongoing obligations of the parties. It complies with Hong Kong's Law of Property Ordinance and other relevant legislation, incorporating necessary provisions for registration and perfection of security interests where applicable.

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What is a Accounts Receivable Assignment Agreement?

The Accounts Receivable Assignment Agreement is a crucial document used in Hong Kong's financial and commercial landscape when businesses seek to monetize their receivables or obtain financing against them. This agreement is commonly utilized in factoring arrangements, supply chain finance, and general corporate financing transactions. It must comply with Hong Kong's legal requirements, particularly the Law of Property Ordinance (Cap. 219) and Companies Ordinance (Cap. 622). The document typically includes detailed schedules of the assigned receivables, mechanics for perfection of the assignment, and provisions for notice to debtors. It's essential for businesses looking to improve their working capital position or engage in receivables-based financing structures in Hong Kong's jurisdiction.

What sections should be included in a Accounts Receivable Assignment Agreement?

1. Parties: Identification of the Assignor and Assignee with full legal names and addresses

2. Background: Context of the assignment, relationship between parties, and purpose of the agreement

3. Definitions and Interpretation: Definitions of key terms including Receivables, Debtors, Related Rights, and interpretation clauses

4. Assignment: Core provision effecting the transfer of receivables from Assignor to Assignee

5. Consideration: Details of payment or other consideration for the assignment

6. Representations and Warranties: Assignor's warranties regarding ownership, existence and validity of receivables

7. Perfection Requirements: Actions required to perfect the assignment including notices to debtors and registration requirements

8. Covenants: Ongoing obligations of the Assignor regarding the receivables

9. Powers and Rights of the Assignee: Scope of Assignee's authority to deal with receivables and enforce rights

10. Further Assurance: Obligation to execute further documents and take additional steps if needed

11. Governing Law and Jurisdiction: Specification of Hong Kong law and jurisdiction

12. Execution: Signature blocks and execution formalities

What sections are optional to include in a Accounts Receivable Assignment Agreement?

1. Security Provisions: Additional provisions if the assignment is by way of security rather than absolute

2. Reassignment: Provisions for reassignment of receivables in specific circumstances

3. Collection Account Arrangements: Required when specific account arrangements are needed for collecting assigned receivables

4. Data Protection: Specific provisions dealing with personal data handling where relevant

5. Tax Provisions: Specific tax-related provisions where relevant, including stamp duty arrangements

6. Confidentiality: Detailed confidentiality provisions if not covered in existing agreements

7. Power of Attorney: Optional appointment of Assignee as Assignor's attorney for dealing with receivables

8. Notice and Communications: Detailed notice provisions if not covered in existing agreements

What schedules should be included in a Accounts Receivable Assignment Agreement?

1. Schedule 1 - Assigned Receivables: Detailed list and description of receivables being assigned

2. Schedule 2 - Form of Notice to Debtors: Template notice to be sent to debtors informing them of the assignment

3. Schedule 3 - Form of Acknowledgment: Template acknowledgment to be signed by debtors

4. Schedule 4 - Existing Security Interests: List of any existing security interests or encumbrances over the receivables

5. Schedule 5 - Excluded Receivables: List of specifically excluded receivables if any

6. Appendix A - Related Contracts: Copies or details of underlying contracts giving rise to receivables

7. Appendix B - Completion Requirements: Checklist of actions required to complete the assignment

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Hong Kong

Document Type

Account Agreement

Sector

Banking

Cost

Free to use

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