Free Asset Purchase Agreement Template

An asset purchase agreement is a contract under which a buyer acquires specified assets of a business rather than buying the company itself.

The distinction from a share purchase is fundamental. In a share sale the buyer acquires the entire entity, including its history and its liabilities; in an asset sale the buyer picks what to take and generally leaves the rest behind, which changes the risk profile of the whole transaction.

That selectivity is why buyers usually prefer it. Equipment, stock, customer contracts, intellectual property, and goodwill can be bought while known and unknown liabilities stay with the seller.

Sellers often prefer a share sale for the opposite reason, and because the tax treatment can differ significantly. Which structure suits a transaction is a question for advisers on both sides rather than a matter of preference.

The schedules do most of the work in an asset purchase agreement, and vagueness in them causes most disputes.

Assets typically included:

• Equipment, machinery, vehicles, and fixtures.
• Stock and work in progress.
• Customer lists, contracts, and order book.
• Intellectual property, brand names, and domains.
• Goodwill and business records.
• Premises, or an assignment of the lease.

Commonly excluded: cash, receivables, tax liabilities, litigation, and anything the seller retains. Whatever is not listed as included generally stays with the seller, which is why the schedule matters more than the narrative clauses.

Third-party consents are the practical obstacle. Contracts, leases, and licences often cannot be transferred without the counterparty agreeing, and identifying which ones need consent should happen early rather than at completion. A landlord or a key customer withholding consent can delay a deal or change its value materially.

Two areas need advice rather than a template, and both catch buyers out.

Employees may transfer automatically. In many jurisdictions, staff working in a business being sold transfer to the buyer by operation of law, with their terms and service preserved, regardless of what the agreement says. Where that applies, there are usually consultation and information obligations on both sides with real consequences for getting them wrong.

Liabilities do not always stay behind. Although an asset purchase is designed to leave liabilities with the seller, some can follow the assets or the business in defined circumstances, depending on the type and the jurisdiction.

Take advice from a lawyer and an accountant on both points before signing. This page states no rule on employee transfer, consultation, successor liability, or tax treatment.

Tip: Ask your adviser early what happens to the people. Employee obligations frequently have timetables attached, and discovering them a week before completion is a common and expensive mistake.

An asset purchase agreement is a substantial document, and these are the parts that carry it.

The Parties

Buyer and seller, with correct legal entities.

Assets Included

Listed in schedules, item by item where practical.

Assets Excluded

Stated expressly so there is no argument.

Liabilities Assumed

Which, if any, the buyer takes on.

Purchase Price and Allocation

The total, how it is apportioned between asset classes, and how it is paid.

Completion

When it happens, and what each side delivers.

Warranties and Indemnities

What the seller promises about the business, and what they will cover if it proves wrong.

Restrictive Covenants

Non-compete and non-solicitation from the seller, protecting the goodwill bought.

Employees, Consents, and Transitional Arrangements

How staff, contracts, and any handover period are dealt with.

Governing Law and Signatures

Which law applies, plus signature blocks.

How the price is split between asset classes is not an accounting formality.

Allocation affects tax for both parties, often in opposite directions, which is why it is negotiated rather than assumed. Buyer and seller frequently want different allocations for the same total price.

It should be agreed and recorded. An agreement that states a total without apportioning it leaves both sides exposed to their advisers disagreeing afterwards.

Get accountants involved before the price is fixed. The allocation can change the real value of a deal materially, and it is far easier to negotiate alongside the headline number than after it is settled.

Nothing here states any tax rule or allocation requirement. Take advice in the relevant jurisdiction.

An asset purchase agreement should be drafted and reviewed by lawyers. Document Genius walks you through each section with simple questions.

1. Agree the Structure First

Asset or share sale, with advice on both sides.

2. Build the Schedules

Assets in, assets out, liabilities assumed.

3. Identify Required Consents

Contracts, leases, and licences that cannot simply transfer.

4. Deal With Employees Early

With proper advice on what applies.

5. Agree Price and Allocation

Together, not sequentially.

6. Have It Reviewed, Then Complete

Both sides separately advised. Start yours now and have a draft ready for your lawyer.

The agreement is one part of a transaction that runs longer than the signing.

Diligence comes first. A buyer should examine the assets, the contracts, the accounts, and the liabilities before committing anything, and a confidentiality agreement should be in place before that examination starts.

Completion needs a checklist. Transfers, consents, keys, records, payment, and any registrations all have to happen, and missing one causes problems immediately.

Plan the handover. Customers, suppliers, and staff all need to be told, and who says what, to whom, and when is worth agreeing in advance rather than improvising.

Register what needs registering. Intellectual property, vehicles, and property interests often require their own transfers and filings quite separate from the agreement itself, and they are easy to overlook once the money has moved.

Nothing on this page is legal, tax, or accounting advice, and no rule on employee transfer, successor liability, taxation, or consent requirements is stated anywhere on it. Take advice from a lawyer and an accountant in the relevant jurisdiction, and take it separately from the other side.