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Asset Purchase Agreement
I need an asset purchase agreement for acquiring a small business's tangible and intangible assets, including inventory and intellectual property, with a focus on ensuring clear transfer of ownership and addressing any existing liabilities. The agreement should include a detailed payment schedule, representations and warranties, and a clause for dispute resolution under Dutch law.
What is an Asset Purchase Agreement?
An Asset Purchase Agreement is a legal contract where one company buys specific business assets from another company, rather than purchasing the entire business itself. Under Dutch law, these agreements let buyers carefully select which assets they want - from equipment and inventory to intellectual property and customer contracts - while leaving behind unwanted liabilities.
Dutch businesses often use these agreements to structure cleaner acquisitions, especially when they want to avoid taking on the seller's debt or legal obligations. The contract must clearly identify each asset being transferred, set the purchase price, and outline any conditions that need to be met before closing. It's particularly important in Dutch transactions to address employee rights under TUPE regulations and VAT implications.
When should you use an Asset Purchase Agreement?
Use an Asset Purchase Agreement when buying specific parts of a Dutch business without taking on the entire company. It's especially valuable when targeting particular assets like machinery, patents, or client lists while avoiding the seller's debts or problematic contracts. This approach works well for expanding your business strategically without inheriting unwanted risks.
Many Dutch companies choose this route during partial acquisitions, restructuring deals, or when purchasing assets from distressed businesses. The agreement becomes crucial when you need precise control over which assets transfer, how employees are handled under TUPE regulations, and managing VAT implications. It offers more flexibility than buying shares and better protection against hidden liabilities.
What are the different types of Asset Purchase Agreement?
- Share And Asset Purchase Agreement: Combines both share and asset acquisition, useful for complex transactions involving partial business transfers
- Software Asset Purchase Agreement: Specialized for tech acquisitions, focusing on intellectual property rights and software licenses
- Equity Interest Transfer Agreement: Used when purchasing ownership stakes alongside specific assets, common in joint venture scenarios
- Share Purchase Agreement: For situations where asset purchases are combined with share transfers in Dutch companies
Who should typically use an Asset Purchase Agreement?
- Buying Companies: Dutch businesses or international corporations seeking to acquire specific assets, represented by their board of directors and legal teams
- Selling Companies: Organizations divesting assets, often working with financial advisors to structure the deal under Dutch law
- Corporate Lawyers: Draft and review Asset Purchase Agreements, ensure compliance with Dutch regulations, and negotiate terms
- Financial Advisors: Value assets, structure payment terms, and advise on tax implications
- Notaries: Required under Dutch law to authenticate certain asset transfers, especially for real estate
- Works Councils: Must be consulted when employee interests are affected by asset transfers
How do you write an Asset Purchase Agreement?
- Asset Inventory: Create a detailed list of all assets to be purchased, including physical items, contracts, and intellectual property
- Due Diligence: Verify ownership, encumbrances, and any third-party rights attached to the assets
- Valuation Details: Gather recent appraisals, financial statements, and agreed purchase prices for each asset category
- Employee Information: Document which employees will transfer under TUPE regulations and their employment terms
- Regulatory Requirements: Check for needed permits, licenses, or Dutch authority approvals
- VAT Implications: Determine the tax treatment for each asset category under Dutch law
- Documentation Review: Use our platform to generate a compliant agreement that includes all required elements
What should be included in an Asset Purchase Agreement?
- Parties' Details: Full legal names, registration numbers, and addresses of buyer and seller
- Asset Description: Precise identification of all assets being transferred, including registration numbers and locations
- Purchase Price: Clear payment terms, methods, and any earn-out or adjustment mechanisms
- Transfer Timing: Specific closing date and conditions precedent under Dutch law
- Employee Provisions: TUPE compliance details and employee transfer arrangements
- Warranties: Seller's guarantees about asset ownership, condition, and liabilities
- VAT Treatment: Clear statements on tax handling for each asset category
- Governing Law: Explicit choice of Dutch law and jurisdiction for disputes
What's the difference between an Asset Purchase Agreement and a Share Purchase Agreement?
An Asset Purchase Agreement differs significantly from a Share Purchase Agreement in how it handles business acquisitions under Dutch law. The key distinction lies in what exactly changes hands and the associated risks and responsibilities.
- Transaction Scope: Asset Purchase Agreements transfer specific assets individually, while a Share Purchase Agreement transfers ownership of the entire company through shares
- Liability Transfer: Asset purchases typically leave historical liabilities with the seller, while share purchases transfer all company liabilities to the buyer
- Tax Implications: Asset deals often trigger Dutch VAT on individual assets, whereas share transfers usually involve different tax treatment
- Employee Rights: Asset purchases require specific TUPE considerations for transferred employees, while share deals automatically maintain all employment relationships
- Third-Party Consents: Asset transfers may require individual contract assignments, but share transfers typically preserve existing contracts automatically
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