Retained assets: Overview, definition, and example
What is retained assets?
In contracts—especially in business sales or partnerships—retained assets are the things the seller or original owner keeps, even though other parts of the business are being handed over. These could be physical items, intellectual property, cash, or anything else the seller decides not to include in the deal.
Think of it this way: if you’re selling your house but keeping the fancy chandelier, that chandelier is a “retained asset.” In business deals, the concept is the same.
Why is retained assets important?
Knowing what stays and what goes is key when selling or transferring parts of a business. If you don’t clearly spell out what’s being retained, it can lead to confusion or even legal disputes down the road.
For example, if the contract doesn’t list certain equipment as retained, the buyer might assume it’s included in the deal. That can create tension—or worse, land both sides in court. A retained assets clause keeps everyone on the same page about what’s not part of the transaction.
Understanding retained assets through an example
Let’s say you own a small food delivery app and decide to sell the business. The buyer wants the brand, the code, and the customer list. But you want to keep your original company name, your office furniture, and the cash currently in the business bank account.
Those items—the name, the furniture, and the cash—are all retained assets. They’re clearly excluded from the sale and will remain under your ownership after the deal is done.
Without identifying these as retained assets in the agreement, the buyer could think they’re included, leading to a messy disagreement.
An example of a retained assets clause
Here’s what a retained assets clause might look like in a contract:
“Notwithstanding anything to the contrary in this Agreement, the following assets shall be retained by the Seller and shall not be included in the sale: (a) all cash and cash equivalents; (b) accounts receivable outstanding as of the Closing Date; (c) office equipment located at Seller’s headquarters; and (d) rights to the trade name ‘QuickEats Ltd.’”
Conclusion
Retained assets are the things that don’t change hands in a business deal. They help define the boundaries of what’s included and what’s not, protecting both sides from misunderstandings.
Whether you’re buying, selling, or restructuring a business, always list retained assets clearly in your contract. That way, there’s no confusion about who keeps what—and no surprises after the deal is done.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.