Use this free asset purchase agreement template to help you agree on terms between buyers and sellers.
Our templates are for general information only. You should not rely on them, and Juro is not liable for any reliance on them. The templates might contain errors, including unlawful provisions and might create risks and liabilities if used. The templates are not legal advice, nor a substitute for it. By accessing any template, you accept these terms and agree that any use is at your own risk. Some of these templates were created using generative AI with human-assisted prompts.
Asset acquisitions are intricate transactions with multiple stakeholders involved.
A solid Asset Purchase Agreement (APA) is fundamental in establishing the relationship between the buyer and the seller, ensuring a smooth transaction for both parties.
What is an asset purchase agreement?
An asset purchase agreement is a legal document that clearly defines the terms and conditions under which a business's assets are transferred from the seller to the buyer.
This could involve tangible assets like machinery, real estate, and inventory, or intangible assets like patents, trademarks, and customer lists.
The first party, the seller, offers specific assets for sale, excluding liabilities. The buyer, the second party, agrees to purchase these assets, often with the intention of integrating them into their existing business operations.
What is the purpose of an asset purchase agreement?
Asset purchase agreements detail the specifics of the asset transfer, including the assets involved, the purchase price, and the responsibilities of each party. They provide a framework for conducting the transaction in line with legal requirements, such as due diligence and clear title transfer.
APAs are crucial for businesses as they ensure clarity, transparency, and protection for both the buyer and the seller.
When should you use an asset purchase agreement template?
Understanding the significance of an APA is one thing, but recognizing when to use one is equally important. Here are some common scenarios:
Selling or buying a business division. When a company decides to sell a specific division or department, an APA outlines the assets involved and the terms of the sale.
Acquiring specific assets. If a company wants to purchase specific assets, like machinery or intellectual property, without taking on the seller's liabilities, an APA is essential.
Business restructuring. During mergers or reorganizations, companies might sell certain assets to streamline operations. An APA ensures a clear transfer of these assets.
Liquidation. When a company is liquidating, it might sell its assets to pay off creditors. An APA defines the terms of such sales.
Startup acquisitions. Startups might not have many liabilities but have valuable assets like technology or customer lists. Established companies can use an APA to acquire these assets.
Who is responsible for managing asset purchase agreements?
Typically, the seller's legal team or contract manager takes the lead in drafting the APA. However, both parties, along with their respective legal teams, play a significant role in reviewing, negotiating, and finalizing the agreement.
What should an asset purchase agreement template cover?
A comprehensive APA template should address the following:
Parties involved. Identifying the buyer and the seller with their legal names, addresses, and contact details.
Assets description. Detailed listing of the assets being sold, including their condition and any warranties.
Purchase price and payment terms. Specifies the total price, payment schedule, and any contingencies or adjustments.
Liabilities. Clearly states that the buyer is purchasing only the assets and not taking on any of the seller's liabilities.
Employee matters. Addresses the status of employees related to the assets being sold.
Confidentiality. Ensures both parties maintain the confidentiality of the transaction details and any proprietary information.
Indemnification. Protects the parties from potential legal actions related to the asset sale.
Termination conditions. Specifies situations where the agreement can be terminated.
Dispute resolution. Outlines procedures for handling disagreements, such as arbitration or mediation.
Representations and warranties. Both parties provide assurances about their authority to enter the agreement and the clear title of the assets.
Closing conditions. Details the steps and conditions to be met before the transaction is finalized.
Amendments. The mechanism for making changes to the agreement post-signing, usually requiring mutual consent.
Traditional workflow for managing asset purchase agreements
Drafting the agreement. The seller's legal team drafts the APA using a template, customizing it to the specific transaction.
Internal review. Various stakeholders, including finance and legal teams, review the draft to ensure it aligns with their interests.
Approval. The draft undergoes an approval process, which might involve senior management or legal departments.
Contract negotiation. Both parties negotiate terms, with each side making revisions until a consensus is reached.
Finalization and signature. Once agreed upon, the APA is signed, either physically or electronically.
Contract management. Throughout the asset transfer, the APA is referenced to ensure compliance with its terms.
Closeout. After the transaction, the agreement is formally concluded, ensuring all terms were met.
How can an asset purchase agreement template help?
An APA template can significantly simplify the transaction process. It offers a standardized document that can be tailored to each deal, ensuring all critical elements are addressed and compliant with legal standards.
Can digitization streamline your asset purchase transactions?
Using an advanced automation platform like Juro can transform the efficiency with which businesses handle asset purchase agreements through these capabilities:
Automated agreement frameworks. Finance departments can create adaptable asset purchase agreement templates that are simple to modify or update within Juro’s intuitive text editor.
Dynamic content adaptation. Juro allows for the automatic insertion of specific clauses into an asset purchase agreement contingent on the nature of the asset, eliminating the need for multiple versions of contracts.
Bulk processing. For expanding enterprises, Juro allows you to generate, fill and distribute numerous contracts for signature in a few clicks.
Adaptive eSignature. Stakeholders can expediently execute asset purchase agreements using Juro’s responsive eSignature feature, accessible on any device.
Automate your asset purchase agreements with Juro
Modern contract management software can automate APAs, making the process faster and more efficient. Features like automated templates, real-time negotiation, eSignatures, and secure storage can revolutionize the way APAs are managed.
Juro’s flexible platform lets you agree, execute and manage contracts up to 10x faster than traditional tools and integrates with systems you already use.