Contracts, licenses and leases that have to transfer

The short version

A buyer is paying for contracts, licenses and a location that keep working after the sale.
Many need someone's permission to transfer: a landlord, a customer, a supplier or a government agency.
Some licenses and permits cannot transfer at all. The buyer has to apply for their own.
Whether you sell the company or its assets changes which ones need consent.
Find out now. A consent that arrives late can delay closing, and one that never arrives can end the sale.

Why this matters

Your business runs on agreements: the lease, customer contracts, supplier terms, equipment leases, software licenses and government permits. If a key one does not survive the sale, the buyer does not get what they paid for, and their lender may not fund the loan.

What usually needs attention

Your lease. Most commercial leases need the landlord's consent to transfer. Lesson 4.7 covers leases.
Customer contracts. Some can be passed to a new owner freely. Others need the customer's written consent.
Supplier and distribution agreements. Especially exclusive territories or special pricing.
Equipment and vehicle leases.
Software and technology licenses. Some are tied to the original company or user.
Franchise agreements. The franchisor usually must approve a new owner.
Government contracts. These often need the agency's approval.
Business licenses and professional licenses. Many cannot transfer. The buyer must qualify and apply on their own.
Permits, such as environmental, health or operating permits.
Bonding and insurance. Surety bonds and insurance policies are usually issued to a specific owner. The buyer typically needs their own.

Selling the company or selling its assets

The structure of the sale changes the work. Lesson 8.6 covers the two structures.

In an asset sale, the buyer forms their own company and buys the assets. Each contract and lease has to be assigned to the new company, and many need consent.

In a sale of the company itself, the contracts stay with the company. But many contracts contain a change of control clause, which requires consent, or allows the other party to end the contract, when ownership changes.

Your M&A attorney can tell you which clauses apply to each agreement.

Build a transfer list

For each major agreement, record:

Who the other party is.
Whether it can transfer, and under which sale structure.
Whose consent is needed, and what they will likely ask for.
When the agreement expires or renews.

Keep this list in your data room.

Timing the requests

You do not need to ask for consents now. Many owners wait until after a [letter of intent](/learn/reference#letter-of-intent "The offer document. It sets out the price, the structure and the main terms, and starts diligence.") is signed, to keep the sale confidential. Lesson 5.7 covers who finds out and when. What you need now is to know which consents you will need, so none of them surprises you.