What is a partial business transfer and when to use it

A partial business transfer agreement allows one party to sell or transfer an independent part of their business (e.g. a division, unit, service, or location) to another party, including related rights and obligations.

Common use cases:

• selling a business branch or e-shop

• restructuring by transferring a department

• handing over client base, staff and assets

• transferring franchise or regional operations

Legal framework

Based on the Czech Civil Code (Sections 502 and 2175+).
Key features:

• the part must be organizationally independent,

• includes assets and liabilities,

• can involve contract and employee transfers.

Key elements of the agreement

• Identification of parties

• Detailed definition of transferred part

• List of assets, rights, obligations

• Sale price and payment

• Effective date

• Contract and labor transition terms

• Tax and accounting provisions

• Signatures

Common mistakes

• Vague business description

• Not addressing contracts or employees

• Missing provisions on liabilities

• Tax obligations not discussed

• Treating it as a simple asset sale

Recommendations

Seller:

• Define clearly what stays and what goes

• Communicate with employees and clients

• List all obligations being transferred

Buyer:

• Request legal and financial due diligence

• Insist on warranties

• Plan for contract and labor continuity

Practice tip

This is not a simple sale – it’s a transfer of a living business part.
Draft with the same care as an M&A deal.

Business unit transfer contract template – symbolic fee

I offer a Czech-English contract template for the transfer of a business unit.

Ideal for retail, service branches, e-shops, or professional practices.

Contact me via e-mail or contact form for fast assistance.

FINAL THOUGHTS – WHAT NOW?

A business transfer agreement isn’t just a formality – it’s a legal shield, if drafted properly. And a trap, if not.

Do you want to be sure your contract will hold up even in a crisis? Get in touch and let’s schedule a meeting. I am a specialist on contract law – more information here.