Corporate Resolution To Sell Assets Template for England and Wales

It's a board resolution recording the decision to dispose of one or more company assets (equipment, intellectual property, a business division, or investments) and authorising named individuals to execute the sale documentation. In England and Wales it provides the legal authority chain required by buyers, their solicitors, and Companies House where filings are triggered.

Section 190 of the Companies Act 2006 requires shareholder approval for substantial property transactions: disposals to a director or connected person valued above the lower of 100,000 pounds or 10% of net assets (minimum 5,000 pounds). Sales to unconnected third parties at arm's length are generally within the board's authority, unless the articles specifically restrict them.

The resolution should describe the assets being sold, identify the buyer, record the agreed sale price or the basis for determining it, confirm that the price represents fair value, specify the completion date, and authorise named signatories to execute the sale agreement and any transfer instruments. Noting that no director has a material interest in the transaction is also good practice.

If the company later becomes insolvent, a liquidator can apply to set aside transactions at undervalue made within two years under section 238. A board resolution that records the commercial rationale, confirms that independent valuations were obtained, and documents how the price was negotiated significantly reduces the risk of a successful undervalue challenge.

Selling individual assets is generally a standard-rated VAT supply if the company is VAT-registered. However, if the sale is of assets forming a business as a going concern, a TOGC election may apply, removing the supply from the scope of VAT. Directors should confirm the VAT position with the company's advisers before proceeding and ensure the resolution reflects the agreed VAT treatment.

Yes. Gains or losses on asset disposals are recognised in the profit and loss account, and chargeable gains are subject to corporation tax. The company may also need to derecognise the asset and associated depreciation from the balance sheet. Directors should ensure the accounting treatment is agreed with the auditors, particularly for material disposals.

Yes, but with strict safeguards. Section 190 of the Companies Act 2006 requires shareholder approval where the disposal to a director or connected person meets the substantial property transaction threshold. Even below the threshold, the director must disclose and manage the conflict of interest under section 177, and the sale should be at fair market value.

Yes. Even within a group, each company is a separate legal entity and the disposing company's board must formally authorise the transfer. Where the disposal is to a fellow group company at less than market value, the companies should also consider transfer pricing rules and whether the transaction triggers the substantial property transaction provisions.