One benefit of opting for asset sale and purchase over share sale and purchase is that the buyer gains the flexibility to select the particular assets and liabilities they wish to obtain, while leaving the remaining ones with the selling company.
In Malaysia, the transfer of asset ownership can involve several procedures based on the assets being acquired:
Contracts may need to be renegotiated and transferred from the seller to the buyer (novation).
For vehicles, the buyer must register ownership under their name with the Road Transport Department Malaysia.
Intellectual property rights need to be officially assigned and registered with the Intellectual Property Corporation of Malaysia (MyIPO).
In cases where registration with authorities is unnecessary, the sale and purchase agreement can specify that ownership of plant, equipment, and machinery will be transferred to the buyer through delivery.
If the buyer plans to hire any employee from the business being acquired, they must extend an offer within 7 days of the ownership change. The offer should maintain terms and conditions of employment that are at least as favorable as the employee's previous arrangement before the change occurred.
If the buyer fails to make such an offer for continued employment, the responsibility for paying all termination benefits, as stipulated in the Employment (Termination and Lay-Off Benefits) Regulations 1980, will remain with the employee's previous employer.
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