Legal and Operational Hurdles in Asset Deals You Can’t Ignore

While asset deals offer buyers flexibility, they come with their own set of legal and operational challenges that require careful planning.

1. Third-Party Consents

Leases, contracts, and licenses often need landlord, client, or regulatory approvals before transfer.

In some jurisdictions, employees may automatically transfer under labor laws (e.g., TUPE in the UK).

Asset deals can trigger VAT, sales tax, or stamp duties, adding to the cost of the transaction.

Transferring customer or employee data requires strict GDPR or local data privacy compliance.

The APA must clearly list all assets, warranties, indemnities, and closing conditions to avoid disputes.

Pro Tip: Always engage experienced lawyers and tax advisors to draft and review the APA to avoid hidden risks.

In summary, asset deals are excellent for risk control, but require more due diligence and legal work compared to share deals.