Asset Purchase Agreements

An Asset Purchase Agreement (APA) is a primary form of acquiring a business or part of it, distinct from a Share Purchase Agreement (SPA). In an APA, the buyer purchases specific company assets (real estate, machinery, intellectual property, client lists) and generally does not assume the company's old liabilities and risks. This form is particularly attractive to buyers as it allows them to "cherry-pick" only desired parts and avoid the seller's past tax or legal problems. However, transferring assets individually is a legally more complex process than transferring shares. It requires identifying each asset, registering the transfer of title, and obtaining consents from third parties (contractors, employees). Specialists on Legal.ge ensure that the APA is detailed, accurate, and protects your investment from hidden risks.

What Does Asset Purchase Agreement Service Cover?

Lawyers on our platform offer full legal support for asset transactions:

• Asset Identification and Description: Precisely listing in the agreement what is being sold (tangible and intangible assets) and what remains with the seller (Excluded Assets).
• Liability Allocation: Clearly defining which liabilities transfer to the buyer (e.g., current contracts) and which remain with the seller (e.g., old tax debts).
• Representations & Warranties: Seller's guarantees regarding the quality, clean title, and fitness of the assets.
• Due Diligence: Checking assets for liens, pledges, and other encumbrances in the Public Registry and "Sakpatenti."
• Employee Transfer: Legal mechanisms for "transferring" employees (new contracts), as employment relationships do not automatically transfer during an asset purchase.
• Closing Procedures: Registration of title, asset handover, and secure payment methods (Escrow).

Real-World Scenarios When You Need This Service

An APA is the best choice in the following scenarios:

• Buying Assets of a Distressed Company: If a company has large debts or tax issues but owns a valuable factory or software, it is better to buy only the factory/code rather than the company share.
• Acquiring a Spin-off: When you want to buy only one division of a company (e.g., just one branch of a restaurant chain).
• Buying Intellectual Property: Purchasing a patent, trademark, or software code from another company.
• Risk Minimization: When the buyer wants to avoid the seller's "skeletons in the closet" (unknown litigation).

Georgian Legal Framework and Regulations

Buying and selling assets is regulated by the Civil Code of Georgia (general rules of sale). For real estate, registration in the Public Registry is mandatory, while for movable items (machinery), transfer of possession suffices. Transfer of intellectual property is regulated by the Law on Copyright and Related Rights. It is also important to consider the Law on Entrepreneurs: if a significant part of the company's assets (more than 50%) is being sold, partner meeting consent is required. A professional lawyer ensures all these formalities are met.

Service Process

An asset purchase transaction on Legal.ge includes:

1. Structure Selection: Consultation on whether APA is better than SPA.
2. Asset Audit: Legal verification of target assets.
3. Drafting Agreement: Listing assets in detail and outlining transfer conditions.
4. Signing and Registration: Notarizing documents and registering title in relevant registries.

Why Choose Legal.ge?

Asset purchase is a technically complex process where a mistake (e.g., incorrectly described asset or missed license) can cause significant loss. Specialists on Legal.ge are transaction experts who ensure the deal is clean and your ownership rights are untouchable.