Asset purchase agreement

What it means

An asset purchase agreement is the contract that moves named assets from seller to buyer. For an online business that list typically includes the domain, the content, the code, the analytics and ad accounts, the email list, the social handles, supplier relationships and any trademarks. What is not on the list does not transfer, which is why the schedule of assets is the part worth reading twice rather than the part to skim.

Why most website sales are asset sales

Selling the assets rather than the company leaves the selling entity behind, and generally its liabilities with it. A buyer acquiring a company acquires everything it carries, including tax positions, contracts and disputes they may not have found. Buyers therefore prefer asset deals for small and mid-sized online businesses, and sellers usually go along with it because insisting on a share sale narrows the buyer pool considerably.

The clauses that decide what happens later

Beyond the asset schedule and the price, the terms that matter are the representations and warranties, which are the facts you are formally asserting about the business; the indemnities, which decide who pays if one of those turns out to be wrong; the non-compete and non-solicitation restrictions; and any holdback, earnout or seller financing that keeps part of the price contingent. These are what get argued about after a sale rather than before it.

When to pay for drafting

For a straightforward low-value sale a well-chosen template covers it, and the marketplaces often provide one. Once the number is serious, or any part of the price is deferred, the drafting is worth a professional — an hour of advice is trivial against the size of the transaction, and the clauses that go wrong are the ones a template could not anticipate for your situation.