Business Transfer Agreement for New Zealand

Business Transfer Agreement Template for New Zealand

A comprehensive legal agreement governed by New Zealand law that documents the terms and conditions for the transfer of a business from one entity to another. The agreement covers all aspects of the business sale transaction, including the transfer of assets, assumption of liabilities, employee matters, warranties, and post-completion obligations. It ensures compliance with New Zealand legislation including the Fair Trading Act, Employment Relations Act, and Companies Act, while providing mechanisms for price adjustments, warranties, and dispute resolution. The document serves as the primary transaction document in business sale transactions, protecting both parties' interests and clearly delineating their rights and obligations.

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What is a Business Transfer Agreement?

The Business Transfer Agreement is a crucial document used in New Zealand when one entity wishes to sell its business operations to another. It is particularly relevant for transactions involving the sale of business assets rather than share transfers, ensuring a comprehensive transfer of business assets, contracts, employees, and intellectual property. The agreement must comply with New Zealand legal requirements, including the Fair Trading Act 1986, Employment Relations Act 2000, and other relevant legislation. It is typically used in situations where parties prefer to transfer specific business assets and liabilities rather than conducting a share sale, allowing for greater flexibility in selecting which assets and liabilities to transfer. The document includes detailed provisions for purchase price mechanisms, warranties, indemnities, employee transfers, and post-completion obligations, making it essential for protecting both parties' interests in the transaction.

What sections should be included in a Business Transfer Agreement?

1. Parties: Identifies and provides full legal details of the seller and purchaser

2. Background: Sets out the context of the transaction and brief description of the business being transferred

3. Definitions and Interpretation: Defines key terms used throughout the agreement and establishes interpretation principles

4. Sale and Purchase: Core agreement to sell and purchase the business, including the assets and liabilities being transferred

5. Purchase Price: Details the purchase price, payment terms, and any adjustments

6. Conditions Precedent: Specifies conditions that must be satisfied before completion

7. Pre-Completion Obligations: Obligations of both parties between signing and completion, including business conduct requirements

8. Completion: Details of the completion process, timing, and deliverables

9. Post-Completion Adjustments: Mechanism for adjusting the purchase price post-completion based on actual figures

10. Employee Matters: Provisions regarding the transfer of employees and related obligations

11. Warranties: Seller's warranties about the business, assets, and liabilities

12. Limitations on Claims: Limitations on warranty claims and other claims under the agreement

13. Tax Matters: Allocation of tax liabilities and obligations

14. Confidentiality: Obligations regarding confidential information and announcements

15. Restraint of Trade: Restrictions on the seller's competing activities post-completion

16. General Provisions: Standard boilerplate clauses including notices, amendments, governing law

What sections are optional to include in a Business Transfer Agreement?

1. Intellectual Property: Detailed provisions for transfer of intellectual property rights, used when IP is a significant business asset

2. Property Lease Assignment: Provisions for assignment of property leases, included when business premises are leased

3. Earn-out Provisions: Structure for additional payments based on future performance, used when part of purchase price is contingent

4. Third Party Consents: Provisions dealing with obtaining required third party consents, included when material contracts require consent to transfer

5. Environmental Matters: Specific provisions dealing with environmental liabilities, included for businesses with environmental risks

6. Information Technology: Provisions for transfer of IT systems and licenses, used when IT systems are crucial to the business

7. Transitional Services: Framework for post-completion services provided by seller, included when ongoing support is needed

What schedules should be included in a Business Transfer Agreement?

1. Assets Schedule: Detailed list of all assets being transferred

2. Excluded Assets Schedule: List of assets specifically excluded from the transfer

3. Assumed Liabilities Schedule: Details of liabilities being assumed by the purchaser

4. Excluded Liabilities Schedule: List of liabilities specifically excluded from the transfer

5. Employee Schedule: List of transferring employees and their key employment terms

6. Material Contracts Schedule: List of key contracts being transferred

7. Properties Schedule: Details of any real property interests being transferred

8. Intellectual Property Schedule: List of intellectual property rights being transferred

9. Completion Deliverables Schedule: List of items to be delivered at completion

10. Warranties Schedule: Detailed warranties given by the seller

11. Form of Transfer Documents: Pro forma transfer documents to be executed at completion

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

New Zealand

Publisher

Genie AI

Document Type

Service Agreement

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Retail

Manufacturing

Professional Services

Technology

Hospitality

Healthcare

Construction

Agriculture

Transport and Logistics

Education

Real Estate

Financial Services

Mining and Resources

Media and Entertainment

Telecommunications

Relevant Teams

Legal

Finance

Human Resources

Operations

Commercial

Tax

Compliance

Risk Management

Corporate Development

Executive Leadership

Mergers & Acquisitions

Relevant Roles

Chief Executive Officer

Chief Financial Officer

General Counsel

Commercial Director

Business Development Manager

Corporate Lawyer

Finance Director

Operations Manager

Human Resources Director

Company Secretary

Risk Manager

Compliance Officer

Tax Manager

Managing Director

Business Owner

Mergers & Acquisitions Manager

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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