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Home Business Documents Purchase Agreement Asset Purchase Agreement

Asset Purchase Agreement Template

If you’re looking to buy or sell the assets of a business then use an asset purchase agreement.

Published June 20, 2022

If your company is in the planning stages or the middle of a merger and acquisition (M&A) with another business, you will need to procure an asset purchase agreement (APA). These contracts are sometimes referred to as business purchase agreements.

An asset purchase agreement serves as a legal contract between the parties. These documents establish all terms and conditions associated with the purchase of another company’s assets.

If this is your first M&A experience as a business owner, you might think it would be far simpler to acquire all the company’s shares in the acquisition. However, that approach could also result in your business taking on that company’s liabilities. Understandably, most businesses seek to avoid this during an asset purchase.

Table of Contents
  • What is an Asset Purchase Agreement?
  • When to Use an Asset Purchase Agreement?
  • What to Include in an Asset Purchase Agreement?
  • Asset Purchase Agreement Sample

What is an Asset Purchase Agreement?

An asset purchase agreement is a legal contract between a buyer and a seller that outlines business assets’ sales. Most asset purchases are made between one company and a business selling off its assets. In some circumstances, you could also deal with the individual shareholders if a share sale is used to make the asset purchase instead.

For a buyer, an asset purchase agreement is preferable to share sales because companies pick and choose which assets they wish to acquire without taking on the other company’s business liabilities (which could be considerable).

However, some deals may require taking on some of those liabilities, so the company making the sale generally prefers to engage in a share sale.

When to Use an Asset Purchase Agreement?

You should use an asset purchase agreement when buying or selling business assets. If you are the purchaser, you will theoretically get a better deal by handpicking the assets that best serve your business. For instance, if you own a concert venue you want to expand, you might purchase all the seats from a shuttered theater but have no interest in taking ownership of its popcorn machine and candy display cases.

All the details of the proposed sale must be hammered out between the two companies’ principals and/or the company’s shareholders before the asset purchase agreement is drawn up.

What to Include in an Asset Purchase Agreement?

Depending on your company’s industry, there will be variances in the agreement. For instance, if you are purchasing the intellectual properties of an internet startup, the intangible assets you acquire will be quite different from those physically involved in a commercial real estate transaction. Therefore, specificity is vital when drafting your asset purchase agreement template.

Below are some general inclusions for most asset purchase agreements:

  • Purchase price
  • Terms of the agreement
  • Exclusions
  • Closing date
  • Patents, trademarks, and/or copyrights
  • Legal descriptions of real estate

The above are just a few samples of valuable information you may want to include when drafting your agreement.

Asset Purchase Agreement Sample

Below you can download an asset purchase agreement in PDF or Word format:

Purchase Agreement

Purchase Agreement screenshot

PDF
Word

Related Business Operations Documents

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  • Business Plan: Create a business plan to guide you through each stage of starting and growing your business.
  • Business Contract: An agreement in which each party agrees to an exchange, typically involving money, goods, or services.
  • Buy-Sell Agreement: A legal contract outlining what happens with the shares of a co-owner or partner if they die or leave the company.
purchase agreement template

Asset Purchase Agreement

Build your asset purchase agreement today!

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