Asset Purchase Agreement Template: Price, Assets & Closing

ASSET PURCHASE AGREEMENT FAQ

What is an Asset Purchase Agreement?

An Asset Purchase Agreement (APA) is a contract that governs the sale and transfer of specific business assets, such as equipment, intellectual property, inventory, or goodwill, from a seller to a buyer. Unlike a stock purchase, it does not transfer ownership of the entire company.

Why is an Asset Purchase Agreement important?

It protects both parties by specifying exactly what is being sold, the purchase price, representations and warranties, and liabilities assumed. This minimizes disputes and ensures a smooth transfer of ownership.

When should you use an Asset Purchase Agreement?

Use it when acquiring or selling part of a business rather than the entire company, particularly when both parties want to limit liability and control the scope of the transaction.

What should an Asset Purchase Agreement include?

It should include identification of the parties, a description of the assets, purchase price and payment terms, representations and warranties, closing conditions, and indemnification provisions.

How is an Asset Purchase Agreement different from a Stock Purchase Agreement?

In an APA, only selected assets are transferred, and liabilities may be excluded. In a stock purchase, the buyer acquires the entire company — including all assets and liabilities.

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