What is an Asset Purchase Agreement?
An asset purchase agreement (APA) is a document that lays out the framework for selling a business, company, or company assets. APAs are important during sales transactions because they establish the terms on how and when the purchase shall be completed. Before jumping into APAs, it’s important to get a good idea about what is involved.
Understanding Business Assets
Business assets are items that a company owns in order to make the business run. This could be machinery, property, office furniture or company vehicles, which are examples of tangible assets because you can actually see them. Types of intangible assets are a business’ goodwill and customer list.
You can’t necessarily touch these things, but they’re extremely valuable to a business. When a business owner decides to sell, the owners can choose to sell the business’ assets or it’s shares/membership interest (assuming that the business is a legal entity).
The difference between shares sale and assets sale is that when a share is bought, the new owner is buying an entire all of the business, including its liabilities and debts. When assets are sold, the buyer is able to pick and choose what parts of the business they want, usually leaving the liabilities and debts with the original owner.
Asset Purchase Agreement Attorney
With a good understanding of your business and what assets are being sold, you can have an APA that goes very smoothly. The agreement describes the reason for the sale, establishes guidelines for the sale, such as payment and price, and transfers the ownership of the assets from the seller to the buyer. Essentially, an APA is an extremely detailed receipt for your company assets.
For something as important as selling your business, your company, or your company’s assets, it’s critical to have a clear and thorough agreement created. Having an experienced lawyer like Dan Burke draw up your APA will strengthen the integrity of your asset sales.
Dan has the intangible assets of honesty and precision when working for his clients, and making sure that their small business dealings are fair and sound. Contact Dan to handle your asset purchase agreement, and put your mind at ease.