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Asset Purchase Agreement Template
What Is an Asset Purchase Agreement?
An Asset Purchase Agreement is a document that outlines the details surrounding either a business being bought out completely, or a large part of it. This will include the buying party to take on some of the liabilities associated with running the business. An asset purchase could also include but is not limited to properties, machines, specific equipment and even licensing.
Alternate Names:
- Assets Purchase Agreement;
- Business Purchase Agreement;
- Asset Sale Agreement;
- APA.
An Asset Purchase Agreement template can be downloaded by clicking the link below.
In order to commence proceedings, a business (the buying party) must first notify the company selling their assets by submitting a Letter of Intent. This document can trigger negotiations.
There are several advantages of drafting an Asset Purchase Agreement which include:
- Outlining how the exchange will be organized;
- Prevents issues with minority investors;
- Resources can be sold at a fair and honest price;
- Prevents time wasters and draws in genuine sellers and buyers.
How to Write a Purchase Agreement for a Business?
Depending on what asset the buying party is purchasing, the Asset Purchase Agreement will vary. However, a simple Asset Purchase Agreement will include all of the following points:
- The date of the agreement . This should be the date when everything will be signed and finalized.
- Identifying the buying party . The buying party must be identified as the buyer. Usually, they will also submit a fee for the assets in question for an agreed price. Include the name of the company with any legal names along with their full address.
- Identifying the selling party . The party that holds the right to sell assets must be identified as the seller. The name of the company with any legal names and their full address must be included in this section.
- Assets can be tangible (physical) or intangible . The buying party must outline all the assets being purchased and indicate the type of assets. All of these assets must be noted down and a full description of each asset must be written out.
- Include the price of the assets sold in full . This is the total sum that the buying party will pay in order to gain rights to the assets outlined in the agreement.
- Information regarding deposits . Sometimes this is compulsory to act as a reservation. This section must state whether or not a deposit is required. If required, the agreement must state whether this deposit is refundable or not.
- Inspection period . If assets need to be inspected, this should be specified along with the time period in which the inspection will last. If inspection is not required, this should also be specified.
- Financial agreement . This section of the agreement needs to include the agreed date for the financial transaction. If the purchase is not paid in full but rather than installments, an installment plan with the dates, duration, and fee (along with any interest rates) should be included.
- Approve, sign, and date.
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