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LPC Law Notes Private Acquisitions Notes

Asset Sales Notes

Updated Asset Sales Notes

Private Acquisitions Notes

Private Acquisitions

Approximately 339 pages

A collection of the best Mergers and Acquisitions* notes the director of Oxbridge Notes (an Oxford law graduate) could find after combing through dozens of LPC samples from outstanding students with the highest results in England and carefully evaluating each on accuracy, formatting, logical structure, spelling/grammar, conciseness and "wow-factor".

In short, these are what we believe to be the strongest set of Mergers and Acquisitions notes available in the UK this year. This collection is f...

The following is a more accessible plain text extract of the PDF sample above, taken from our Private Acquisitions Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:

Asset Sales


= in its most basic form, a pension is simply a pot of money saved up over an e’ees working life, into which the e’ee and/or the e’er make contributions to provide the e’ee (or their estate if they die) w/income during retirement

Why use a pension to save?

  • tax efficient way of saving, good for e’ee because sum invested is ‘gross’ amount (this is become money is not taxed on its way into the pot)

  • contributions from both e’er and e’ee

  • investment gains

  • tax-free lump sum in the end

  • annuity (or income drawdown)

Types of pension scheme

  1. Personal (contract between individual and pension scheme) =

-> Always money purchase (basically a pot of money) eg. stakeholder (just a tightly regulated money pension scheme) [see below]

  1. Occupational (ie. thr/ your job and set up by e’er - may be for a group of cos or for a single e’ee scheme)=

-> money purchase scheme (pot of money - you can get lump sum and annuities)

-> final salary pension scheme (you get a percentage of your final salary) [see below]

Money purchase

  • known as a defined contribution scheme

  • here, defined from eyes of e’er

  • from e’er’s point of view, their liability is fixed

  • e’er agrees in advance what level of contribution it is prepare to make on behalf of e’ees that join the scheme and liability is fixed to this amount

  • on retirement, the post isn’t just handed over to e’ee as lump sum

  • instead, the money is used to buy retirement benefits - usually in the form of a financial product called an annuity

  • annuity = an insurance product that provides e’ee w/income till death

  • GR - e’ers prefer money purchase because their liability is certain

Final Salary Schemes

  • also known as defined benefit scheme

  • here, defined means from eyes of e’ee

  • a good scheme will provide 1/60th of e’ees final salary for each yr of e’ent

  • this is great for e’ees but terrible for e’ers because liability is not fixed as e’er has no idea how long e’ee will be w/company and how high their salary will be in final yr of employmeny

  • consequently, due to loads of co’s not having enough in their pension pot to pay these out as a result of recession these don’t really exist anymore apart from for execs/fat cats

  • an old school corporate scheme which is not popular w/e’ers

Group schemes vs single e’er schemes

  • this will be done on whichever is more tax beneficial for the specific co

E’ers obligations

Pensions Act (‘PA’) 2006 introduced new obligations on e’ee to provide access to, and contribute towards, pensions for their e’ees. Therefore, contemporary and important issue

s.75 PA liability -

nb. doesn’t apply to money purchase schemes

Personal and Occupational pension schemes - obligations on asset sale

Share sale - under s.75 PA the co ceasing to participate in a group co occupational scheme will be liable for their proportion of any deficit - concern for B. If a co participates in a single e’er occupational then liability remains w/T.

There are particular issues w/final salary schemes (or other defined benefit schemes) because if the scheme is in deficit @ time of sale then “e’er cessation event” [aka leaving the scheme] makes the co liable for a huge “e’er” debt to the S group

Therefore for both sales it is essential that during DD full deets of pension schemes obtained. Nb. a

Asset sale - concern for S because they keep liability of any occupational pension scheme.

Nb. s75 liab could also arise if selling co participated in a group final salary scheme and all of its e’ees passed to B and therefore S co is ceasing to participate in scheme. Here though, liability would remain w/selling co and wouldn’t pass to B

What transfers under TUPE?

Reg 10 transfers

  • rights in relation to personal pension schemes

  • NOT occupational pension rights

.... but

Pensions Act 2004 and Transfer of E’ent (Protection Regs) 2005:

... where S provides occupational pension scheme, B must make some but not the same contributions to:

  • a final salary scheme; or

  • a money pension scheme; or

  • a stakeholder scheme

(nb. a B doesn’t even need to set up occupational pension scheme particularly, just any pension scheme so not too onerous)


TUPE = Transfer of Undertakings (Protection of E’ent) Regulations 2006. For purpose of PA module, business sale as a going concern will always constitute a ‘relevant transfer’ for purposes of TUPE

Key TUPE points

  • only applies to business sales

  • transfer of an undertaking or part of undertaking

  • reverses old CL position

  • no ‘dismissal’

  • automatic transfer of contracts to B

Relevant transfer

Reg 3(1) - TUPE applies to relevant transfers - on PA module all business sales will satisfy this

Which e’ees are affected?

Botzen and Duncan Webb tests

Limb 1 Reg 4(1)

  • e’ees will transfer if they’re in the business which is being sold - trickier to ascertain if eg. HR of T is S’s group HR

  • What if only part is being transferred?

  • Botzen test - court looks at e’ee’s function rather than terms of their contract

  • Duncan Webb test - court considers following factors: amount of time spent working in one part of the business over the other, value given to each part of the business by the e’ee, contractual terms set tin out what the e’ee’s job compromises, and allocation of cost for e’ee’s service

Limb 2 Reg 4(3) includes reference to e’ees employed immediately before transfer and those dismissed just before transfer. Covers:

  • e’ees employed immediately before transfer; or

  • those dismissed just prior to transfer to exclude Reg 4(3) as this will be unfair dismissal

Unfair dismissal

Reg 4(3) says those dismissed just prior to transfer will automatically count as unfairly dismissed if the sole/principal reason for it was:

  • the transfer itself; or

  • a reason connected w/ transfer that is not an ETO reason

Effect will be that TUPE will operate to transfer the e’ent contract/any liability to B in respect of such an automatically...

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