Asset Purchase Agreement Template (US)

Define purchased assets and excluded assets precisely

An asset deal is only as good as its schedules. The agreement should list what transfers: equipment, inventory, contracts, permits, IP, domains, customer records, goodwill, books, claims, deposits and prepaid items. It should also list what does not transfer.

A vague phrase like all assets related to the business creates disputes over cash, receivables, refunds, employee devices, software licences, insurance claims and records. The template forces schedules for purchased and excluded assets.

The same discipline applies to assets that are hard to see. Domains, social-media handles, source code, customer lists, data rooms, warranties, deposits, permits and in-process work often carry much of the value in a small-business sale. If they are not listed, the buyer may assume they transfer while the seller assumes they were retained.

Liabilities do not disappear by magic

A buyer often assumes selected liabilities and excludes the rest. The agreement should identify assumed liabilities, excluded liabilities, tax liabilities, employee liabilities, customer credits, warranty claims, debt and liens.

Even when the agreement excludes a liability, successor-liability, bulk-sales, fraudulent-transfer, tax, environmental, employment or contract doctrines can still matter. A template cannot erase those risks; it can make the intended allocation visible.

Closing deliverables are the transaction checklist

A closing package may include bill of sale, assignment and assumption agreement, IP assignment, domain transfer, lien releases, third-party consents, officer certificate, board approval, tax forms, escrow instructions and transition services.

The template includes a closing-deliverables schedule so the parties do not sign a purchase agreement and then discover that contracts cannot be assigned or liens cannot be released.

Tax allocation needs its own schedule

For some trade-or-business asset acquisitions, both buyer and seller use IRS Form 8594 to report the allocation of consideration. The agreement should attach an allocation schedule and require consistent reporting unless a tax adviser says otherwise.

The IRS Form 8594 instructions require details about consideration, asset classes and later changes. A one-line tax allocation promise is not enough for a serious business asset sale.

Restrictive covenants need narrow drafting

The source drops in a blank non-compete. That is dangerous. US non-compete enforceability is changing and state-specific, and sale-of-business covenants are usually treated differently from employee covenants.

This master uses selectable confidentiality, non-solicit and sale-of-business restricted-period language, with a warning that counsel should tailor it by state, scope, duration and legitimate business interest.

If the deal depends on the seller helping customers transition, say that directly rather than trying to solve everything with a non-compete. Training, introductions, records access, vendor notices and a short consulting period are often more enforceable and more commercially useful than a broad restriction.

Clause-by-clause guide

Purchased assets

Schedules every asset that transfers.

Excluded assets

Keeps cash, receivables, personal property, claims or other retained assets out of the sale.

Assumed liabilities

States which liabilities the buyer accepts and which remain with seller.

Purchase price and allocation

Sets price, adjustments, escrow, holdback and tax allocation schedule.

Representations

Covers authority, title, liens, contracts, IP, tax, employees, compliance and litigation.

Closing deliverables

Lists bill of sale, assignments, consents, releases, approvals and certificates.

Indemnity

Allocates losses for breaches, excluded liabilities and post-closing obligations.

Post-closing covenants

Handles transition, records, confidentiality, non-solicit and restricted competition where lawful.

US checklist

Asset deals need tax, lien, consent and liability review before closing.

• Prepare Form 8594 analysis where applicable

  IRS Form 8594 applies to certain sales of a group of assets making up a trade or business where goodwill or going-concern value attaches or could attach.

  IRS Form 8594 overview

• Attach an allocation schedule

  The IRS instructions require reporting of total consideration and allocation among asset classes; later changes may require supplemental reporting.

  IRS Form 8594 instructions

• Search liens and releases

  Equipment, inventory, receivables, vehicles, IP and other assets may be subject to liens or security interests that need releases at closing.

• Get third-party consents

  Contracts, leases, software licences, permits, customer data and financing documents may restrict assignment.

• Handle employees separately

  Offer letters, accrued wages, benefits, WARN or mini-WARN, immigration records and restrictive covenants may need separate treatment.

• Review non-compete enforceability

  Restrictive covenants are state-specific and should be tailored narrowly, especially after recent federal and state challenges to non-competes.

• Check sales, transfer and use taxes

  Asset sales can trigger sales tax, transfer tax, bulk-sales notices or local filings depending on assets and state law.

How to complete the agreement

1. List assets. Prepare purchased-asset and excluded-asset schedules.
2. Allocate liabilities. Name assumed liabilities and excluded liabilities.
3. Set price and tax allocation. Add payment terms, adjustments, escrow, holdback and Form 8594 allocation if relevant.
4. Build closing checklist. List consents, releases, assignments, IP transfers and certificates.
5. Add post-closing terms. Set transition support, records, confidentiality, indemnity and any lawful restrictive covenants.

Frequently asked questions

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