Buying A Business - Tips for a Successful Asset Purchase

An asset purchase agreement is an agreement between a buyer and a seller that finalizes terms and conditions related to the purchase and sale of a company's assets. 

A business purchase can be a tedious process, including how to determine whether to structure as either an asset sale or stock purchase. If you are going ahead with an asset sale, you need a plan of attack and detailed documentation.

What is an asset sale?  In an asset sale, only the assets of the business are transferred to the new owner without a transfer of ownership of the actual business entity. A sale of the assets of a business requires a great deal of documentation. Following is a sample checklist of documents and other items for the sale of the assets of a business when real estate is not being transferred.

Checklist A sale of the assets of a business requires a great deal of documentation. Following is a sample checklist of documents and other items for the sale of the assets of a business when real estate is not being transferred.

Documents prepared and signed pre closing

• Broker Agreement (sets forth the terms and conditions under which a Broker will either find goods and/or services for a Buyer to purchase or interested buyers for goods and/or services being sold by a Seller.)

• Letter of Intent (the understanding between two or more parties which understanding they intend to formalize in a legally binding agreement. )

• Asset Purchase Agreement (agreement between a buyer and a seller that finalizes terms and conditions related to the purchase and sale of a company's assets)

Also the documents below will need to be completed by closing:
List of Assumed Contracts
List of Liabilities Assumed
Promissory Note
Security Agreement
Escrow Agreement
Disclosure of Claims, Liens, and Security Interests
List of Trademarks, Trade Names, Assumed Names, and Internet Domain Names
Disclosure of Licenses and Permits
List of Existing Warranty Claims
Obligations to Brokers or Finders
Opinion of Legal Counsel
Required Waivers and Consents
List of Employees and/or Consultants of Seller with whom Buyer shall have reached Agreements or Contracts
Non-competition Agreement(s)
Employment or Consulting Agreement(s)
Certified Check or Wire Transfer of Amount Due at Closing
Check to Broker or Finder
U.C.C.-1 Financing Statement
Escrow Agreement
Certificate of Officer of Seller as to Incorporation and Authority (and a certified copy of the authorizing corporate resolutions)
Certificate of Officer of Buyer as to Incorporation and Authority (and a certified copy of the authorizing corporate resolutions)
Assignment of Contracts and Leases
Consents to Assignment of Contracts and Leases, where required
Bill of Sale
Vehicle Title Certificates
Keys to Premises and Vehicles

Asset sales require legal expertise and knowledge of business laws. You will want a knowledgeable business and commercial law attorney on your side through the process. Speak to our office today.