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Tag: selling a business
A simple Asset Purchase Agreement is a contract between a buyer and a seller that sets out the terms and conditions related to the purchase and sale of a company’s assets.
This should not be confused with a stock purchase agreement, as these documents are different. An Asset Purchase Agreement (APA) is one of the most commonly used documents in commercial transactions. This document also defines the rights and liabilities of each party to the transaction.
What is Typically Included in a Simple Asset Purchase Agreement?
Generally, an Asset Purchase Agreement includes the following:
- Identification of the specific assets that are being purchased.
- Assets that are excluded from the sale.
- The terms and conditions of the sale. This lists the purchase price and purchase price adjustments, purchase price allocation, and mechanisms related to dispute resolution.
- The purchase price.
- Information regarding the assumption of liabilities by the purchaser.
- Date of closing that also includes any conditions imposed upon the parties at closing.
- Warranties of the purchaser.
- Warranties of the seller.
- Terms of delivery of the purchased assets.
- Indemnification for costs that may arise once the transactions are finalized that result from pre-existing conditions.
- Specification of special tax treatment that the seller or buyer is entitled to.
- Employee benefits and terms on how to handle accrued bonuses once the transaction is finalized.
Why Should You Hire a Lawyer for the Formation of a Simple Asset Purchase Agreement?
When it comes to an Asset Purchase Agreement, the more information and details included, the better. Hiring an attorney for getting a standard Asset Purchase Agreement framed is a good idea because the terms and conditions are too complicated for most laymen to navigate. You may also not have time to devote to researching the matter yourself. This is when you need knowledgeable legal services to help you sail through the whole process easily. The Law Firm of Vaughn, Weber & Prakope, PLLC is a team of veteran lawyers who have years of experience in serving a large client base.
To ensure the whole process goes well, hire a lawyer who is competent enough to provide smart legal guidance.
By hiring the lawyers at the Law Firm of Vaughn, Weber & Prakope, PLLC, you can utilize the following legal services:
- Legal Advice
With highly experienced lawyers like us, you won’t go wrong when it comes to framing a standard Asset Purchase Agreement because we look into the minute details and work to get the most appropriate outcome for you. We closely assess each term and condition while framing the agreement. In case there are points that can cause a problem in the future, our legal services are efficient enough to identify them during the process.
- Mediation
Both parties can be on the same page if there is a mediator present between the buyer and the seller. You can reach a mutually beneficial settlement by deciding to hire a lawyer.
- Negotiation
The negotiations involved in a simple Asset Purchase Agreement can be long and complex. Your lawyer can deal with the negotiations between the involved parties and close the deal in a satisfactory manner.
- Drafting
There are numerous documents involved in the process of selling or purchasing the assets of a company. The Law Firm of Vaughn, Weber & Prakope, PLLC will help you in drafting the agreement and getting all the required documents in place to prevent any legal glitches. This will ensure the presence of every necessary document, with nothing left out.
Contact the Law Firm of Vaughn, Weber & Prakope, PLLC
Before a deal can be closed, there are many legal documents that need to be verified and signed. If you try to do it on your own, you will face hurdles. This won’t be the case if you seek legal guidance from the Law Firm of Vaughn, Weber & Prakope, PLLC. We will prepare everything and provide every legal solution to make the process easy and simple for you.
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Important Details to Include in a Standard Asset Purchase Agreement
Commercial transactions often involve an asset purchase agreement (“APA”) that is vital to business activity. But there can be a few conditions that make things go wrong.
Drafting of a simple asset purchase agreement is essential for the successful execution of the deal.
Below are the errors to avoid or else they can cost you dearly:
- Essential Parties are Excluded from APA
There may be a case when a buyer signs an APA with company X, while the actual owner is company Y or a shareholder in company X. The same can happen with the seller also. To avoid this, make sure that only the essential and real parties are a part of the deal.
- Failure to Address the Pre-conditions to the Deal
Failing to make sure pre-conditions are resolved before the completion of the transaction can increase the complexity of the deal. These conditions are clearance of the seller’s debts, third party consents, transfer of key employees, banking approvals, and approvals from other authorities.
- What are “The Assets” that you are purchasing?
IYou want to make sure that you identify each and every asset that you are purchasing. Some assets can be tangible (e.g., refrigerators, soda machines, furnishings) or intangible (e.g., business name, lease). You should determine which assets are owned or leased. You should inspect the tangible assets to make sure that they are in working order. For the assets that you are purchasing, you want to make sure that the seller actually has ownership of them and has the right to transfer them to you. With the leased equipment, you need to decide if you want to (and can) assume the lease and, if so, what are the terms of the lease.
- No Specifications about Closing Requirements
All actions to be taken, and all documents to be provided at closing, should be clearly identified by the standard asset purchase agreement. Failure to specify such conditions makes it difficult for both parties in the long run.
- Failure to Change Signatories
Generally, buyers don’t feel the need to change the signatories to banking and other business accounts. But it is essential to keep third parties informed at the right time about such changes.
With the Law Firm of Vaughn, Weber & Prakope, PLLC, you will always be able to make the right legal decisions when it comes to the formation of LLC asset purchase agreements. Contact us to get the most appropriate legal guidance from lawyers with extensive knowledge gained over years of experience.
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Important Details to Include in a Standard Asset Purchase Agreement
