Residencial Mac-Kay Las Condes

Asset Purchase Agreement Tupe

Asset Purchase Agreement Tupe

08/04/2021 • Under: Sin categoría


As a general rule, the transfer of assets does not constitute a TUPE transaction, as the sale of equipment, contracts, shares and WIP, good revalence, etc., is carried out without the transfer of personnel, liabilities and cash, debtors, creditors and bank liabilities/assets. However, the assets for sale are only part of a business staff if they are used exclusively for the work for which the transferred assets were used. In short, no. The litmus test is whether the buying party has control of the asset after the transfer. One of the considerations for selling a business, whether it is a share sale or an asset sale, is to determine first whether TUPE application is applied, and then how this will affect the sales and pre-execution obligations. If you need legal advice from trade and work lawyers on TUPE, call us or if a business is purchased in part or if different businesses are purchased by different buyers, the «economic entity» can be dismantled at the end, so that it does not retain its identity. Under these conditions, TUPE cannot apply, but a careful analysis of how the company is dismantled and whether one of the employees is an economic entity that will retain its identity after transmission must be carried out. In the case of an acquisition of assets transferring assets such as contracts, real estate, goods or goods, etc., employees of the company may be subject to the 2006 «TUPE» regulation, which may be applicable to the protection of workers in certain situations. When TUPE applies to the purchase of a facility, employees automatically transfer with the business assets to the new owner. In determining whether the second requirement is met, it is necessary to consider the position of the entity before and after the transfer.

If, for example, the company has the same customers, names, assets, etc. A strong indicator of the fact that a company has retained its identity is that it has the same business will, that is, it relies on the name, reputation and customers built by the previous owner. When a contract is considered fundamental to the business when buying assets, the purchaser may insist that the closing of the asset sale be conditional on the renewal of the contract. In this case, you can use a novation agreement to ensure that all three parties accept this change.

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