Business sales / TUPE transfers

The existence of pension arrangements can add complexity and risk to even the most straightforward of corporate transactions. The levels of risk and difficulties involved will depend on:

•
the nature of the transaction (eg whether it is a share or business sale), and
•
the nature of the target company's pension arrangements

What is a business sale?

Business sales (also known as asset sales) involve a buyer acquiring all or part of the seller's physical business. This means that the buyer assumes ownership of the contracts specified in the business sale agreement. These contracts will typically include business contracts and the employment contracts for some or all of the seller’s employees as well as any plant, machinery, property, goodwill etc.

Considerations for the buyer and the seller

When it comes to dealing with pensions issues on a business sale, the key stages of a business sale can be divided up as follows:

•
where the target company participates in a trust-based occupational pension scheme, the seller must, as part of its preparations for the business sale, consider issues relating to conflicts of

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