An Asset Purchase Agreement is a legal contract that outlines the provisions of acquiring the entire or even part of the assets of another company. This type of agreement can/will encompass which assets are being acquired, the compensation that will be made for such assets, the date of when the assets have been acquired, the parties involved in the acquisition, the liabilities that will be attached, and any other provisions (i.e. warranties) attached to the assets at the time of transfer.
The whole purpose of this form is to act as a legal binding contract where the buyer obtains the assets outlined and seller obtains a specified amount of compensation for transferring said assets.
There are currently two most commonly used formats of the Asset Purchase Agreement; the basic and descriptive forms.
The basic form is commonly used when you are looking at acquiring the entire business or all of its assets. Making a purchase, such as this, does not require you to specifically outline which assets will be included in the sale. The basic Asset Purchase Agreement will cover all the assets associated with the firm once it is implemented.
The descriptive form is used when you only want to acquire some, but not all, of the assets being sold. For example, you know someone who is liquidating their business and you wish to buy some of their equipment. Well you will need to use a form that lists each asset specifically so you will not be assuming any unwanted liabilities in the overall transaction. The descriptive allows you to list assets specifically and gives specific provisions regarding such assets.
The Asset Purchase Agreement is a legal type form and as with any legal form, the contents can seem like they are written in Greek terms. This can be confusing, so I will just hit some high highlights of what each format of the form encompasses.
The basic format of this form is pretty straightforward in what they are asking you to include for information. The top of the form is asking for the date of the acquisition and the names of the parties involved. Part one is concerned with the business name that is associated with the assets and generality of the assets that will be transferred. The second part is concerned with the compensation that will be received for said assets. The third and fourth parts are informational. The fifth part is concerned with the information on the closing of this transaction, which will include the attorney’s name and address. Part six through nine are informational and part ten is asking for the name of the state where the assets are located. The last part of the form is to be signed under the supervision of a notary.
The descriptive form is more descriptive about the assets being acquired, than the basic form, and this is because only specific assets are being acquired. Part A is concerned with the specific assets being acquired. Part B is concerned with the agreed upon compensation terms and what liabilities are attached to the assets at the time they will be transferred. Part C is concerned with the warranties and other legal documents associated with the assets. Part D is a non-compete agreement that the buyer and seller agree to and certain terms and time limits may be put forth in this section. Parts E through L are pretty self explanatory in their nature and require minimal input of information. Part M is concerned with your specific state laws that govern this type of agreement.
Then of course the last part is to sign the agreement in the presence of a notary public.
Now these are just the high points of the content contained in the asset purchase agreement form, to get a full detailed explanation you will need to consult with an attorney or accountant who holds a special expertise for the legal side of this form.
You can download Asset Purchase Agreement free from several different websites across the internet just by doing a simple search. If you search out the key words “Asset Purchase Agreement free download” or “Asset Purchase Agreement template” you will obtain several websites that will allow you to download, fill out, and print this document for free.
Even though the internet has several opportunities for you to obtain a free form, the best place to obtain and receive help for this form is by visiting an attorney or accountant. These professionals will have extensive knowledge of this form and will be able to make sure that the form is filled out correctly and filed appropriately.