How to Draft a Asset Purchase Agreement (2026 Template and Clauses)

An asset purchase agreement, or APA, is the contract by which a buyer acquires specific assets and (sometimes) liabilities of a business, rather than buying the company that owns them. It is used when the parties want to cherry-pick what moves across, leaving unwanted assets and liabilities behind. This guide explains what an APA covers, how to draft the key parts, and gives a clause-by-clause skeleton. It is written for founders, buyers, sellers and in-house teams. It is general guidance, not legal advice, and a real deal involves tax, employment and sometimes regulatory advice alongside the drafting. ## Asset purchase versus share purchase Start by being clear which deal you are doing. In a share purchase, the buyer acquires the company itself, so everything the company owns and owes comes too, including hidden liabilities. In an asset purchase, the buyer acquires only the named assets, and usually only the named liabilities, leaving the rest with the seller. Buyers often prefer asset deals because they can leave liabilities behind and may get a better tax position; sellers often prefer share deals for a clean exit. The APA is the document for the asset route. ## What an asset purchase agreement covers An APA has to do three jobs well: identify exactly what is being bought and what is not, move it across cleanly, and allocate the risk between buyer and seller. Everything in the document serves one of those three jobs. ## The core structure of an asset purchase agreement ### 1. Parties and recitals Name the buyer and the seller, and recite that the seller is selling and the buyer is buying the defined assets of the business. ### 2. Definitions Define the business, the assets, the assumed liabilities, the excluded assets, the excluded liabilities, the completion date and the consideration. Clear definitions are the backbone of an APA. ### 3. Sale and purchase of assets State that the seller sells and the buyer buys the assets with effect from completion, free of any charges except those the buyer agrees to take. List the asset categories: equipment and plant, stock and inventory, goodwill, intellectual property, contracts, debtors, real property or leases, and records. Attach detailed schedules. ### 4. Excluded assets and liabilities Say plainly what is not being sold and what liabilities are not being assumed. In an asset deal the default is that the buyer takes nothing it has not expressly agreed to take, so make the exclusions explicit to avoid argument. ### 5. Consideration and allocation Set the price, how and when it is paid, any deferred or earn-out element, and how the price is allocated across the asset classes, which matters for tax. Provide for adjustments, for example a stock or working-capital adjustment. ### 6. Completion Set the date and place, and list completion deliverables: transfer documents, assignments, keys and records from the seller, and payment from the buyer. State what each side must do to transfer title to each type of asset. ### 7. Contracts and consents Contracts usually cannot be transferred without the other party's consent (novation or assignment). Set out which contracts transfer, how consents are obtained, and what happens to contracts where consent is refused or still pending. ### 8. Employees In many jurisdictions employees of the business transfer automatically to the buyer by operation of law on a business transfer. Address who the affected employees are, the information and consultation obligations, and how liabilities for them are split. ### 9. Warranties and indemnities The seller gives warranties about the assets, title, the contracts, litigation, compliance and the accounts. Indemnities cover specific known risks. The buyer relies on these, so negotiate scope, disclosure and any cap and time limits. ### 10. Limitations on liability Caps, baskets or thresholds, time limits for claims, and disclosure against the warranties. This is heavily negotiated and usually favours a balance between a clean deal and real recourse. ### 11. Restrictive covenants The seller agrees not to compete, not to solicit customers or staff, and not to use the transferred goodwill, for a reasonable period and area, protecting what the buyer paid for. ### 12. Tax, VAT and transfer taxes Address the tax treatment of the sale, whether it qualifies as a transfer of a going concern, and who bears transfer taxes or stamp duty on the assets. ### 13. Post-completion, confidentiality and boilerplate Further assurance (each side does what is still needed to transfer assets), wrong-pocket provisions for assets or payments that land in the wrong place, confidentiality, notices, governing law, jurisdiction and counterparts. ## A usable asset purchase skeleton ```

1. Parties and recitals
2. Definitions (business, assets, assumed and excluded liabilities, consideration)
3. Sale and purchase of the assets (with schedules)
4. Excluded assets and liabilities
5. Consideration, allocation and adjustments
6. Completion and deliverables
7. Contracts and consents (assignment, novation)
8. Employees and transfer obligations
9. Warranties and indemnities
10. Limitations on liability (caps, baskets, time limits)
11. Restrictive covenants
12. Tax, VAT and transfer taxes
13. Further assurance, wrong-pocket, confidentiality, boilerplate

- **Silence on liabilities.** The buyer's whole reason for an asset deal is to leave liabilities behind. Spell out assumed and excluded liabilities so there is no implied transfer.
- **Ignoring consents.** Assuming contracts move automatically is a common and expensive mistake. Build a consents process and deal with refusals.
- **Forgetting employees.** Business transfers often move employees by law. Plan for it rather than discovering it at completion.
- **No price allocation.** Failing to allocate the price across assets creates tax problems for both sides.
- **Overbroad restrictive covenants.** Covenants that are too wide in time or area can be unenforceable. Keep them reasonable. ## Drafting, reviewing and tracking an asset deal in one place An APA comes with a stack of linked documents: asset schedules, assignments, consent letters, disclosure letters and the completion checklist. Its obligations do not stop at completion, consents, further assurance, earn-out measurement and warranty claim windows all run on. When the agreement, the schedules and those post-completion dates sit in different tools, items get missed. Keeping the draft, the clause-level review and the key dates in one workspace keeps the deal together. [Adira](https://adiralaw.com) is one such workspace, built on frontier AI, where you can draft the APA from a brief, see each warranty, indemnity and liability-cap clause marked favourable, neutral or unfavourable to your side, link the agreement to its schedules and consent letters, and track completion deliverables and claim-period ends as alerts. The agreement and the follow-through stay connected. Get the asset schedules, the liability split and the warranty package right, and the rest of an asset purchase agreement follows.