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A Business Owner Would Like to Purchase Another Business and Needs an Asset Purchase Agreement Drafted.

When you’re looking to buy a Florida business, an asset purchase agreement (APA) is a critical part of the transaction. Also known as a business purchase or asset sale agreement, it is a formal written contract that covers and confirms all aspects of the sale, including but not limited to price, conditions of sale, warranties, and limitations.

Like all contracts, asset purchase agreements involve legal and financial obligations, so it’s highly recommended that you hire a Florida small business lawyer to draft it or negotiate its terms. At the Florida Small Business Center, we can help you ensure that the resulting contract is both fair to both sides and legally enforceable.

What Does an Asset Purchase Agreement Cover?

Asset purchases typically cover company assets and liabilities, meaning that once you buy it, you’re taking on all of the rewards and risks. This includes but may not be limited to:

Business licenses
Equipment
Machinery
Real estate
Intellectual property

In the state of Florida, there are several essential terms that must be included in every asset purchase agreement. They include:

Certain information on all parties to the agreement
The company’s purchase price
Assets involved in the transaction
Assets not included in the transaction
Representations and warranties
Timelines

We will help ensure that your contract includes all necessary information so that you commence ownership of your new business on legally solid ground.

How Does an Asset Purchase Agreement Work?

There are a number of steps involved in an Asset Purchase Agreement. They are outlined below.

Negotiation

The buyer and seller must first negotiate the agreement, which may involve a series of offers and counteroffers until both parties reach an accord. At this stage, the help of an experienced small business attorney can be crucial to a successful outcome.

Paying Earnest Money

Following the signing of the asset purchase agreement, the buyer is required to deliver earnest money, which represents your good faith intention to buy the business. The amount is usually an agreed-upon percentage of the purchase price, although both parties can opt for a fixed amount instead.

Disclosure

During this stage, the seller will disclose key details about the business, such as assets, licenses, employee information, insurance policies in effect, and currently outstanding liabilities. The goal is to make sure that you understand what you’re buying before you finalize the transactions.

Performance of Due Diligence

At this stage, the buyer can perform a detailed due diligence on the business. This process lets you investigate everything that the seller has told you about the company as well as personally inspect company assets like property, equipment, and real estate.

Financing and Closing

If all goes well with due diligence, the asset purchase agreement can proceed. If you plan to finance the purchase, you will generally receive a specified period of time to obtain it from a lender. After financing is confirmed, you, the seller, and your respective attorneys can schedule the closing, where you deliver the rest of the purchase price and receive your new business.

Get Experienced Legal Assistance with Your Asset Purchase Agreement

If you are buying a company, it’s essential to create a thorough and clear agreement. Having an experienced lawyer from the Florida Small Business Center draw up or negotiate your APA will strengthen the integrity of your asset sales. In addition to being honest and precise when assisting clients, we also work to ensure that your small business purchase is fair and valid, putting your mind at ease. For more information or to schedule a consultation, call 1-866-842-5202.