Selling, merging or restructuring a business: what happens to the company car leases

Share sale, asset sale, merger, a move from partnership to limited company or insolvency: what each means for your business car and van leases, and what funders ask for.

A business contract hire agreement is with one specific legal entity: the company or partnership that signed it. When a business is sold, merges, changes its legal structure or runs into trouble, the first question is simple: will that entity still exist, and does it still want the cars?

Selling the shares: usually nothing to transfer

If the buyer buys the shares in your company, the company that signed the leases carries on. The agreements normally stay where they are. Still read each agreement for anything about a change of ownership, and tell the funder, because it may want to update its records or review the account.

Selling the business or merging into another company

If the business and its assets move into a different company, the leases don't follow automatically. Each agreement has to be transferred to the new company with the funder's approval. This is called novation. Alphabet, BMW Group's fleet funder, lists a merger or acquisition as one of the main reasons for a novation.

Build the leases into the deal timetable. Alphabet says a novation takes 8 to 10 weeks on average, counted from the date it has received all the documents it asked for.

Changing from a partnership to a limited company

Converting an LLP or partnership into a limited company creates a new legal entity. Alphabet explains that the new company has to enter its own agreement, so the leases need novating to it, even though the people and cars are the same. Some funders won't move a sole trader's agreement into a limited company at all, so ask yours early.

What funders ask for

Requirements vary, but Alphabet's published process is a useful guide to what to have ready:

• Time left and a clean account. At least six months remaining on the agreement, with any arrears paid.
• Accounts. The latest full accounts for the company taking over, or an opening balance sheet for a new company. Alphabet won't accept bank statements instead.
• Director details. Name, date of birth and home address of a director for fraud and credit checks, and possibly a director's guarantee.
• A fee. Alphabet charges £250 + VAT for the first vehicle and £25 + VAT for each additional vehicle on the same request.

Until the novation completes, the original business stays responsible for the invoices, so keep paying the rentals.

If the business is insolvent

Insolvency narrows the options quickly:

• Neither Alphabet nor Arval will transfer a lease from a company that has been dissolved.
• Arval won't accept novation requests in a liquidation. In other insolvency procedures it may consider one if at least six months remain; otherwise the vehicles are collected.
• At Alphabet, a novation from an insolvent business needs approval from its Recoveries team.

If you can see trouble coming, deal with the leases before a liquidation or dissolution, while a transfer is still possible.

When the new owner doesn't want the cars

Sometimes the buyer only wants the business, not the fleet. You then have two routes for each lease: pay the funder's Early Termination Charge, or transfer the lease to another business. Our guide to lease transfer or Early Termination Charge compares the two.

On Swap-a-Lease you list each lease for £39.99, and a success fee is only due if a transfer completes: two months' rental if 12 or more months remain, or one month's if fewer. Interested businesses contact you through Swap-a-Lease, and your details stay hidden until they register interest.

Next step

Check what your funders say about transfers in our Funder Fees table, read lease novation explained, or if you're the buyer and need vehicles, post a Wanted request or browse our New Lease Deals.

Based on Alphabet UK's published novation guidance and Arval UK's guidance on business insolvency, checked in November 2026. This is general information, not legal, tax or financial advice. Take advice on the sale itself, and confirm the current rules with each funder.