Asset Ownership or Interest

What is Asset Ownership or Interest?

Asset ownership or interest documentation encompasses all records of legal ownership of material assets that are held by your business and/or that are necessary to operate your business.

An asset ownership or interest document is a legal document that acts as evidence of your company’s ownership of an asset including real estate, machinery, intellectual property (IP) rights and office buildings. For leased asses, this documentation should include a copy of the lease agreement containing the start and end dates of the contract, the terms and conditions as well as the roles and responsibilities of all parties involved.

It also includes evidence of the results of any screening performed by your company to verify ownership or mortgages prior to asset acquisition or lease.

What’s included:

• Title Deeds: Legal documents transferring asset title ownership to your company or visa versa
• Lease Agreements: Agreements on assets leased by your company, including sub-lease agreements
• Insurance Policies: Insurance policies bought by your company to protect your assets, containing information on coverage amount and conditions, premiums and renewal dates

Why is Asset Ownership or Interest important for business today?

Maintaining an up-to-date and comprehensive collection of asset ownership documents enables your company to:

• Track the assets owned or leased by your company
• Provide internal staff with a single source of truth of key data points in relation to asset ownership
• Understand your company’s rights to ownership, use, operation and transfer of assets
• Comply with asset registration regulations and reporting requirements across jurisdictions.

Why is Asset Ownership or Interest important for an event tomorrow?

Maintaining an up-to-date and comprehensive collection of asset ownership documents is important for an event tomorrow, as it:

• Provides comfort to potential investors that the asset ownership positions conveyed by management is supported by documentary evidence
• Ensures simple due diligence issues such as this can be addressed swiftly thereby providing greater confidence in the management team
• Minimises the time spent by potential investors in chasing these documents so that more time can be spent by them on understanding more important strategic issues

Pros of addressing Asset Ownership or Interest

• Provides easy access to legal proof of ownership of assets
• Encourages proactive management of expiring lease agreements
• Provides confidence in the management team to potential investors
• Facilitates an efficient due diligence process by ensuring this issue is addressed quickly

Cons of not addressing this topic

• Increased time wasted by management tracking down these documents when an event occurs
• Potential source of distraction for potential investors in chasing up this documentation
• Potential investors may form a reduced perception of management capability if these documents cannot be located and delivered quickly.