Business Asset Purchase Agreement for the United States

Business Asset Purchase Agreement Template for United States

A Business Asset Purchase Agreement is a legally binding contract used in the United States for the transfer of specific business assets from one entity to another. The agreement details the terms and conditions of the sale, including the assets being transferred, purchase price, payment terms, representations and warranties, and post-closing obligations. This document is governed by various federal and state laws, including the Uniform Commercial Code, and may require additional regulatory compliance depending on the industry and transaction size.

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What is a Business Asset Purchase Agreement?

The Business Asset Purchase Agreement is essential when a business wants to acquire specific assets rather than purchase an entire company through a stock acquisition. This document is commonly used in the United States when companies want to cherry-pick assets, avoid assuming all liabilities, or structure a transaction for tax advantages. The agreement typically includes detailed schedules of assets being purchased, excluded assets, assumed liabilities, and various representations and warranties. It must comply with federal and state regulations, including bulk sales laws, securities regulations, and industry-specific requirements.

What sections should be included in a Business Asset Purchase Agreement?

1. Parties: Identifies all parties to the agreement, including legal names and addresses

2. Background/Recitals: Provides context and purpose of the transaction

3. Definitions: Defines key terms used throughout the agreement

4. Purchase and Sale of Assets: Details the assets being purchased and excluded assets

5. Purchase Price and Payment Terms: Specifies consideration, payment method, and timing

6. Closing: Details closing date, location, and deliverables

7. Representations and Warranties: Statements of fact and assurances from both parties

8. Covenants: Ongoing obligations of the parties

9. Indemnification: Protection against losses and liability

10. Governing Law: Specifies jurisdiction and applicable law

What sections are optional to include in a Business Asset Purchase Agreement?

1. Employee Matters: Required when transaction involves employee transfers

2. Intellectual Property Transfer: Details IP rights transfer when IP assets are included in sale

3. Environmental Matters: Environmental representations and obligations when real property or manufacturing facilities involved

4. Transition Services: Post-closing support services when seller will provide temporary post-closing support

What schedules should be included in a Business Asset Purchase Agreement?

1. Schedule of Purchased Assets: Detailed list of assets being transferred

2. Schedule of Excluded Assets: List of assets explicitly excluded from sale

3. Schedule of Assumed Liabilities: List of liabilities buyer is assuming

4. Schedule of Excluded Liabilities: List of liabilities explicitly excluded from transfer

5. Schedule of Material Contracts: List of key contracts being transferred

6. Schedule of Intellectual Property: List of IP assets being transferred

7. Schedule of Employee Information: Details of transferring employees

8. Bill of Sale: Form document transferring title to personal property

9. Assignment and Assumption Agreement: Form document transferring contracts and obligations

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

United States

Publisher

Genie AI

Cost

Free to use
Relevant legal definitions
Clauses
Industries

Securities Exchange Act: Federal law governing securities transactions, relevant for larger business asset purchases that may involve securities or reporting requirements

Hart-Scott-Rodino Antitrust Improvements Act: Federal antitrust legislation requiring review of large transactions meeting certain size thresholds to prevent monopolistic practices

Internal Revenue Code: Federal tax regulations governing the tax implications and treatment of business asset purchases

Uniform Commercial Code: State-adopted uniform law governing commercial transactions, particularly Article 2 (Sale of Goods) and Article 9 (Secured Transactions)

WARN Act: Worker Adjustment and Retraining Notification Act requiring advance notice of significant employment changes in certain business transactions

Federal Bulk Sales Laws: Regulations governing the sale of business assets in bulk to protect creditors and ensure proper notification

Fair Labor Standards Act: Federal law establishing standards for wages, overtime pay, and working conditions that must be considered in employee transfers

ERISA: Employee Retirement Income Security Act governing employee benefits and pension plans in business transfers

COBRA: Consolidated Omnibus Budget Reconciliation Act requirements for continuing health coverage during business transitions

Immigration Laws: Federal regulations concerning employment of foreign workers that may be affected by the business asset purchase

Patent Act: Federal law governing the protection and transfer of patent rights in business asset purchases

Copyright Act: Federal law protecting creative works and their transfer in business asset transactions

Trademark Act: Lanham Act governing the protection and transfer of trademarks and brand assets

Trade Secrets Protection Acts: Federal and state laws protecting confidential business information during asset transfers

State Corporate Laws: State-specific regulations governing corporate transactions and asset transfers

State Bulk Sales Laws: State-specific requirements for bulk asset sales and creditor protection

State Tax Regulations: State-specific tax implications and requirements for business asset transfers

State Environmental Regulations: State-specific environmental compliance requirements affecting asset transfers

State Licensing Requirements: State-specific permits and licenses needed for business operations and their transfer

State Employment Laws: State-specific regulations governing employee rights and obligations in business transfers

State Fraudulent Transfer Laws: State-specific regulations preventing fraudulent transfers of assets to protect creditors

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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