An asset purchase agreement is an agreement between two parties that clearly outlines and defines the guidelines and terms of a business or assets of a business being sold. These agreements are incredibly important in ensuring transparency and beneficial communication between two parties engaging in the buy/sale of significant business assets.
Assets covered in an asset purchase agreement may include but are not limited to:
- Intellectual property
- Entire businesses
The Dan Burke Law Firm understands that these types of transactions can be daunting and defining terms that everyone involved agrees with can be a time and labor-intensive process. If you are seeking a business attorney that can help you expertly navigate the complexities of purchasing and transferring large business assets, you’ve come to the right place.
Components That Should Be Part Of Every Purchasing Agreement
- Recitals: The recital is essentially the opening statement of any purchase agreement. They include things like the date, names of involved parties and clear acknowledgment of agreement by everyone involved.
- Definitions: To avoid any confusion and ambiguity, any important terms should be clearly listed and defined. This helps everyone involved simplify and make communication more efficient.
- Purchase Price & Allocation: This is the main part of the agreement that lists exactly what is being sold, along with a clear list of the price, terms and any liabilities or exclusions that may come with the specifics of the deal.
- Closing Terms: This part of the agreement clearly defines the conditions in which the agreement and sale will come to a conclusion.
- Warranties: Warranties are essentially legal “promises” that set up a legal record of any claims or guarantees regarding a sale or purchase.
- Covenants: These are agreements made by parties involved in a purchase agreement that are related to the sale but don’t necessarily pertain to what was specifically sold. For instance, a covenant may include an agreement to not operate a competing business within a specified geographic area.
- Indemnification: Indemnification is essentially a type of legal insurance written into a purchase agreement that defines exactly what is expected in the case of a future legal dispute between the two parties.
- Governance: This section of the agreement clearly defines the legal jurisdiction that will define the parameters of any legal dispute that arises.
- Dated Signatures: Dated signatures from each involved party are what make a purchase agreement legal and binding.
Asset purchasing agreements are potentially complicated documents with many small details and working parts. The above list is just a representation of the bare minimum you want to see in any legitimate agreement.
Protect Your Business, Assets And Peace Of Mind, With Dan Burke
When it comes to small businesses, Dan Burke is by far the best in San Antonio law. For the last two decades, Dan has achieved personal success at his own law firm by prioritizing the success of his clients above all else.
If you’re looking for help dealing with the endless details of an asset purchase agreement, or have any other legal questions relating to your small business, don’t hesitate to call today! The free consultation that every potential client receives with Dan Burke could be the first meeting you have with the last small business lawyer you’ll ever need.