Asset Purchase Agreement Intra-Group Reorganisations

Since the decision in Aveling Barford (Aveling Barford Ltd v. Perion Ltd[1989] BCLC 626), there has been no uncertainty as to whether an intragroup asset transfer could be made by reference to the book value of the asset and not its market value. In Aveling Barford, it was found that the company made an illegal distribution when a company did not have distributable profits and transferred an asset to a shareholder at a lower market value. The company`s distributable profits are increased by the amount (if it exists) that exceeds the book value of the asset. Intra-group transactions are often implemented and documented less formally than arm-length transactions. However, for corporate governance reasons, it is advisable to follow the process properly (for example. B seek third-party approval if necessary, meet bank requirements and comply with TUPE) and properly document restructurings. The uncertainty was corrected by the introduction of provisions of the 2006 Companies Act which provide that when a company whose profits are available for distribution transfers a non-solvent asset to a shareholder, the amount of the distribution of the transfer of non-solvency assets must be given special attention: special attention must be paid to VAT, the tax status of assets, vat group agreements and the possibility of dealing with businesses. An intra-group asset transfer to a parent company or subsidiary at book value must comply with in-kind benefit rules. Transfers at market value are outside these rules. Following a buyback transaction, the acquiring group may need to transfer the assets acquired around its group to ensure that they are in the most appropriate subsidiary.

This may include, for example. B, the transfer of companies to other companies in the group (commonly known as the hive or hive) or the target group or entity transferred to a holding company of the group if it was not the acquirer. Intragroup restructuring may apply to a large or minor transfer of assets or to the purchase or sale of a business within a group. The sale of shares or assets as part of a restructuring may occur. This includes taking steps in advance to simplify their balance sheets for companies that are supposed to strike. Typically, this is equity (where companies have a substantial share premium), dividend reporting and/or measures to deal with intra-group balances. The due diligence procedure also determines which assets must be transferred by all companies selected for the companies on strike. Intragroup restructuring is usually the transfer of assets within a group of companies that is carried out for the purpose of reorganizing the group`s structure and business activity. There are a number of reasons why restructuring can be undertaken.

The frequent reasons for the group`s restructuring are the main reasons: our professional team assists you and your company in the full range of internal restructurings within the group, including transfers and splits. Appendix 1 of the ICAO Profit Guidelines under the Companies Act 2006 provides some elaborate examples of asset transfer under the Companies Act.

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