Business readiness

Asset Ownership Agreements

What are Asset Ownership Agreements?

An asset ownership agreement defines your company’s level of control and ownership over its business assets.

An asset ownership agreement outlines your company’s ownership rights over a business asset. This company contract provides information on:

  • Asset Sale or Purchase Contracts: Outlines the terms and conditions related to the sale or purchase of assets by your company
  • Instalment Sale Agreements: Enables your company to manage the asset payment in installments
  • Property Deeds: Allows for transfer of property ownership to your company
  • Sale and Leaseback Arrangements: Allows your company to sell an asset and lease it back from the buyer for a fixed tenure

Why are Asset Ownership Agreements important for business today?

Having an up to date and comprehensive set of asset ownership agreements enables your company to:

  • Assess your company’s rights to own, use, operate and transfer an asset
  • Mitigate the risk of third party ownership claims
  • Determine the assets required to operate your business efficiently
  • Safeguard against arbitrary increases in costs such as rent or maintenance charges

Why is it important for an event tomorrow?

Having an up to date and comprehensive set of asset ownership agreements is important for an event tomorrow, as it helps:

  • Assess information on the assets owned, sold and leased to accurately value your company
  • Budget for any instalments sale and leaseback agreements
  • Determine the key revenue generating company assets
  • Evaluate the terms and conditions related to ownership and lease asset rights required to operate your business

Pros of addressing Asset Ownership Agreements

  • Improvement in financial decision-making by accounting for pending payments under installment sale agreements of your company
  • Accurate forecasting as cost of leased assets are fixed in advance
  • Better internal governance as the agreement pre-defines the costs associated with use and ownership of an asset
  • Improvement in financial accuracy by accounting for depreciation and amortization of the owned assets

Cons of not addressing this topic

  • Increased staff time locating these documents for presentation to authorities or other third parties as part of the ordinary course of business
  • Increase time and cost of due diligence for both internal company management and potential investors

Learn more about company contracts

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