Title: A Comprehensive Guide: Puerto Rico Checklist of Matters to be Considered in Drafting Agreement for Sale of Corporate Assets Introduction: In Puerto Rico, drafting a proper agreement for the sale of corporate assets is crucial for a smooth transaction. This checklist will provide an overview of the key matters that need to be taken into account when formulating such an agreement. These considerations apply to various types of corporate assets sales, such as real estate, intellectual property, equipment, and more. Let's delve into the details. 1. Corporate Asset Identification: Clearly identify the assets to be sold, including physical and intellectual property, inventory, customer lists, contracts, licenses, and any other relevant items. Provide a detailed description of the assets' condition and specify any restrictions, encumbrances, or necessary approvals. 2. Purchase Price and Payment Terms: Outline the agreed-upon purchase price and ensure clarity on how and when the payment will be made, including any installments, contingencies, or financial guarantees. 3. Representations and Warranties: Include representations and warranties from both the buyer and the seller regarding the accuracy of information provided, title and ownership, absence of legal disputes, intellectual property rights, environmental compliance, and more. 4. Due Diligence: Define the scope and extent of due diligence to be performed by the buyer. Outline the access to books, records, and relevant information to be provided by the seller. 5. Conditions Precedent: State any conditions that must be satisfied before the agreement can be executed or the sale can be completed. This may include regulatory approvals, consents from third parties, or any necessary internal corporate approvals. 6. Employee Matters: Address the status of employees affected by the sale, including their transfer, redundancy, severance payments, pensions, and benefits. 7. Closing Process: Specify the date, time, and location of the closing, as well as the required documentation to be delivered by both parties. Define the allocation of risks and liabilities during the transition period. 8. Governing Law and Jurisdiction: Determine the governing law under which the agreement will be interpreted and any agreed-upon jurisdiction for dispute resolution or arbitration. 9. Confidentiality and Non-Compete: Include provisions on maintaining confidentiality of sensitive information and any non-compete restrictions applicable to the seller or key personnel. 10. Indemnification and Limitation of Liability: Establish the extent of indemnification rights for the buyer and seller, including any limitations on liability for breaches or disputes that may arise after the sale. Conclusion: When drafting an agreement for the sale of corporate assets in Puerto Rico, it is essential to consider these key matters. By addressing these issues comprehensively, both parties can ensure a seamless transaction that safeguards their interests.
Puerto Rico Checklist of Matters to be Considered in Drafting Agreement for Sale of Corporate Assets
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Asset Sale ChecklistList of Assumed Contracts.List of Liabilities Assumed.Promissory Note.Security Agreement.Escrow Agreement.Disclosure of Claims, Liens, and Security Interests.List of Trademarks, Trade Names, Assumed Names, and Internet Domain Names.Disclosure of Licenses and Permits.More items...?
Generally, in an asset purchase, the purchasing company is not liable for the seller's debts, obligations and liabilities. But there are exceptions, such as when the buyer agrees to assume the debts, obligation or liabilities in exchange for a lower sales price, for example.
Under General Corporation Law, a foreign corporation or a limited liability company must register with the State Department of Puerto Rico before conducting business locally.
In an asset purchase, the buyer will only buy certain assets of the seller's company. The seller will continue to own the assets that were not included in the purchase agreement with the buyer. The transfer of ownership of certain assets may need to be confirmed with filings, such as titles to transfer real estate.
A U.S. company that wishes to do business in Puerto Rico may choose to either form a new subsidiary entity or register an existing company. In order to determine the best option, the company should consult an attorney familiar with tax laws and the company's business activities and structure.
An asset purchase involves just the assets of a company. In either format, determining what is being acquired is critical. This article focuses on some of the important categories of assets to consider in a business purchase: real estate, personal property, and intellectual property.
Puerto Rico offers businesses the security and stability to operate in a US jurisdiction, while providing an unmatched variety of tax incentives that make it an attractive destination for businesses, large and small.
Commonwealth taxesAll federal employees, those who do business with the federal government, Puerto Rico-based corporations that intend to send funds to the US, and some others also pay federal income taxes (for example, Puerto Rico residents who earned income from sources outside Puerto Rico.
Parts of an Asset Purchase AgreementRecitals. The opening paragraph of an asset purchase agreement includes the buyer and seller's name and address as well as the date of signing.Definitions.Purchase Price and Allocation.Closing Terms.Warranties.Covenants.Indemnification.Governance.More items...
In an asset sale, a firm sells some or all of its actual assets, either tangible or intangible. The seller retains legal ownership of the company that has sold the assets but has no further recourse to the sold assets. The buyer assumes no liabilities in an asset sale.