An asset purchase and sale agreement (APA) is a written contract that moves the ownership of business assets from a seller to a buyer. You may also see it called an asset purchase agreement, business purchase agreement or asset sale agreement. It can cover all of the assets or only some of them. This free asset purchase agreement template lets you download the PDF or Word file and fill in the parties, price, closing date and asset list.
Last Updated: October 2026. This guide is reviewed and updated regularly to reflect current law. If you notice an error or outdated information, please contact us.
Sometimes, a buyer may prefer to purchase only certain assets of a company rather than buying all the assets and liabilities of the business as a whole. Asset purchase agreements allow the buyer to buy and the seller to sell only the specified assets of a business. The assets that a buyer commonly buys through these contracts include:
This fillable purchase agreement template may be used in a variety of situations. When the buyers and sellers want to choose and pick the assets they want to buy or sell, such contracts serve their purpose. The APA may also be a part of a larger deal such as a joint venture or the sale of a business entity.
The asset purchase transaction may be a part of a mergers and acquisition transaction between two companies, where the acquirer company may purchase specific assets of the target company. It may also be a part of a business expansion plan where the assets are purchased for expanding the business.
The primary difference between an asset purchase and a stock purchase is that in the former, the buyer and seller agree upon the specific assets that will be sold and the buyer assumes no liabilities, while in a stock purchase agreement, all the assets and liabilities are transferred to the buyer.
Another difference between the two is that in asset sales, the company or business sells the assets, while in a share sale, the individual shareholders are the seller of their respective shares.
As a result of a share sale, the buyers acquire shares in the company, while in an asset purchase, they only acquire certain assets of the company. A share purchase is typically a less complex transaction as the buyer takes the assets and liabilities as they find it and as a whole. While in an asset purchase, specific terms and conditions for each asset may be applicable.
In short:
An asset purchase lets a buyer choose which parts of a business to acquire. That choice brings benefits for the buyer and the seller, along with some trade-offs. Weigh both sides before you settle on a deal structure.
Before entering into an APA, one must consider its advantages and disadvantages. Some common advantages of an asset purchase include:
Some of the disadvantages of an asset purchase are:
An asset purchase usually moves through five stages, from the first offer to the signed contract. The buyer and seller settle the assets and the price along the way, and the final agreement records every term they reached. These are the stages in their usual order:
The buyer notifies the seller of their intent to purchase the assets of the target business through a “letter of intent.” This letter of intent is the starting point of the negotiation of the asset purchase contract between the parties. The different terms of the asset purchase transaction may be outlined in a letter of intent.
After the letter of intent is sent, both sides proceed usually decide upon the method of valuation that will be used for determining the purchase price. Fair market value is a commonly used method of valuation.
The parties then identify the assets that are to be sold under the asset purchase agreement. Such assets are also defined and listed in the final contract.
After these important details are discussed with each party, and after the parties agree to the final terms and conditions, the contract containing all of the requisite information is prepared.
After the agreement is finalized and drafted, each party involved should sign the same. After signing, the agreement is executed and possession is transferred from the seller to the buyer.
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The terms contained in the asset purchase transactions should be carefully drafted. While the exact terms may vary depending upon the transfer and the transaction, the following terms are commonly included in the agreement:
The recitals usually contain the names of each party, their addresses, and the date of signing.
The agreement should specify the assets that are being sold by the seller. It should also define them. Important details related to the assets should also be mentioned. It is better to be as specific and descriptive as possible about each asset. If there are any exclusions or related liabilities, they should also be specified.
The purchase price for each asset and the total for all assets should also be included. The deposit to be made and the payment terms are also included in the agreement.
Warranties and representations include the claims made with respect to the assets and the transaction that are relied upon by the buyer and the seller. Mostly, it will include information and promises made by the seller with respect to the quality, condition, or legal status of the assets such as the purchase date, working conditions, or required approvals.
These conditions are particularly important and helpful if either side decides to take legal action against the other in the future.
Indemnification terms may include damages that may be payable for any breach of the terms of the contract.
Covenants are sub-contracts within the asset purchase agreement. These may include non-competes or non-disclosures depending upon the type of transactions.
The closing terms include the pre-conditions that are required to be completed before the agreement can be finalized. These may include approval from third parties or the government, any repairs to be done by the seller, and closing price adjustments. The closing date or the date by which the transfer should be completed should also be mentioned.
Follow these steps to fill out the free FormsPal asset purchase agreement template, titled Asset Purchase and Sale Agreement. Download the PDF, then fill it in on screen with the FormsPal PDF editor or print it and complete it by hand. Have the names, addresses, price, closing date and asset list ready before you start filling in the form.
The screenshots under each step show the FormsPal Asset Purchase and Sale Agreement template filled with sample entries in blue, so you can see where each answer goes. The names, addresses, dates and amounts are examples only.
On page 1, enter the effective date first. This is the date from which the agreement goes into effect. Then enter the Seller and its entity type, the Principal, and the Buyer and its entity type.
Name the Business in the first recital. Tick "all" or enter a percentage for the Principal's ownership, add the name the Buyer will operate under in Section 1(a), and enter the Purchase Price in Section 2(a).
On page 2, go to Section 2(b) and enter the deposit amount if the Buyer is making a deposit. If no deposit is required, select the second option.
In Section 2(c), select the first option for payment in cash at Closing. Select the second option if the buyer is required to evidence a part of the purchase value through a promissory note at the deal closing. Then enter the note amount.
In Section 3, select the first option to give the Buyer a termination deadline, and enter that date. Select the second option if neither party gets a termination right unless the other is in default. Then enter the Closing date in Section 4(a).
On page 3, find Section 4(c). If the buyer is required to make any kind of cash payment at closing, mention the same in sub-clause (c). Enter the cash amount the Buyer delivers at Closing.
In Section 5, tick whether the Seller ships the inventory and personal property or the Buyer picks it up or arranges shipment.
On page 4, read the note at the top of Section 6. Strike out any representation or warranty that does not apply.
In 6(a), enter the kind of entity the Seller's business is, such as an S corporation, an LLC or a sole proprietorship. Then enter the state where the business operates or is incorporated.
On page 5, in Section 6(f), enter the fiscal years ended for the balance sheets and statements the Seller has given the Buyer.
On page 6, enter the state where the Buyer's business operates or is incorporated in Section 7(a).
In Section 9, tick the first option if both sides have agreed to a non-compete, and enter the number of months. This period should be reasonable and not too long as lengthy periods of non-compete are usually held invalid.
On page 7, if you chose the non-compete, describe the products or services the restricted business offers for sale. If no non-compete has been agreed to, select the second option in clause 9.
In Section 11, enter the Seller's address, telephone number and email for messages between the parties.
On page 8, enter the Buyer's address, the person it is to the attention of, a telephone number and an email.
Indicate the governing law. In clause 18, mention the State law that will govern the APA. Also enter the county and state where arbitration takes place, unless it is held virtually.
On page 9, name the broker in Section 19. In Section 22, select the first option and enter the number of weeks if the Principal will provide transition services.
On page 10, select the second option if no transition services have been agreed upon. Select the third option if customized transition services have been agreed upon, and write them on the lines provided.
On page 11, the Seller and the Buyer each sign above their printed Name and Title lines, and the Principal signs in the Principal block. Collect all three signatures before you hand out copies.
Exhibit A lists the items that transfer from the Seller to the Buyer. On page 12, tick the accounts receivable and inventory items that are part of the sale and strike out the ones that are not.
On page 12, tick each item that transfers. For the assigned contracts and the intellectual property, list the details on the lines provided. Then tick the furniture and equipment item and the permits item if they apply.
On page 13, tick each remaining item that transfers: actions, prepaid expenses, warranty rights, insurance benefits, books and records, and goodwill.
On page 14, list on the lines provided the name of each asset that is excluded and will not be transferred.
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Common choices are intellectual property, machinery and equipment, customer lists, stock or raw material, technical know-how, goodwill, premises and the seller's existing contracts and related documents. Exhibit A of the template is a checklist of asset types, and Exhibit B lists anything you leave out of the sale.
Yes. The free PDF template has fillable fields, so you can type your entries on screen and print the document for signatures. You can also download the Word version and edit it in a word processor.
Gather these documents and details first:
With those in hand, you can go through the form from the first page to the exhibits without stopping.
Several sections give you two or three boxes, such as the deposit, the payment method, the termination right and the transition services. Tick the box in the free template that matches your deal and leave the others empty.
The principal is the owner of the seller's business. The free template names the principal in the opening paragraph and has a signature line for the principal on the signature page.
General information, not legal or tax advice.
