What happens to existing contracts when business ownership changes?

Which contracts should you review?

Some agreements are more likely than others to contain restrictions on ownership changes. Key contracts include:

• Customer agreements.
• Supplier and vendor contracts.
• Commercial leases.
• Loan and financing agreements.
• Employment agreements.
• Software, intellectual property, and licensing agreements.

Look for assignment, transfer, or change-of-control provisions that explain what happens if ownership changes.

What should you do before completing the ownership change?

Planning ahead can help avoid disruptions after the transaction closes. Consider:

• Identifying contracts that require approval before they can be transferred.
• Reviewing notice and consent requirements.
• Confirming which agreements remain in effect after the ownership change.
• Updating business records where required.
• Notifying customers, vendors, or lenders if appropriate.
• Keeping copies of all amendments and approvals.

Taking these steps can help ensure important business relationships continue after the ownership transition.

What to do next…

1. Make a list of the business's key contracts.
2. Review each agreement for transfer or change-of-control provisions.
3. Obtain any required approvals before completing the ownership change.
4. Keep updated copies of all contracts and related documents.

What to consider in your specific situation

While many contracts continue after an ownership change, the outcome depends on the transaction and the agreements involved.

• Whether you're transferring ownership of the business entity or selling its assets.
• The wording of assignment or change-of-control clauses.
• Whether customer, vendor, landlord, or lender consent is required.
• Industry-specific licensing or regulatory requirements.
• The structure and timing of the ownership change.
• State laws that may affect contract transfers.

Since every situation is different, consider getting more information through Rocket Copilot or an attorney review to move forward more confidently.