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An Asset Purchase Agreement is a legal contract used when one business buys specific assets from another business rather than purchasing the entire company. These assets might include equipment, inventory, real estate, customer lists, or intellectual property rights - but not the seller's legal entity itself.

Under Canadian business law, this agreement outlines exactly what's being bought, the purchase price, payment terms, and any conditions that must be met before closing. It also typically addresses important details like tax implications, required government approvals, and which liabilities the buyer will or won't take on. Many Canadian companies prefer asset purchases over share purchases because they can pick and choose specific assets while leaving behind unwanted obligations.

Consider using an Asset Purchase Agreement when buying specific parts of a business without taking on the entire company. This approach works especially well for Canadian buyers who want to acquire valuable assets like equipment, real estate, or intellectual property while leaving behind unwanted liabilities or problematic contracts.

This agreement becomes crucial during strategic expansions, when targeting specific business segments, or during distressed sales where cherry-picking assets makes more sense than a complete takeover. It's particularly valuable in regulated industries like healthcare or manufacturing, where limiting exposure to past compliance issues or environmental liabilities is essential. The agreement helps clearly define what transfers to the buyer and what stays with the seller.

• Standard Asset Purchase Agreement: Base template covering typical business asset transfers with standard terms and conditions
• Machinery Purchase Agreement: Specialized version focused on equipment and machinery transfers with technical specifications
• Asset Purchase Agreement Employees: Modified agreement that includes provisions for transferring employees and related obligations
• Simple Share Purchase Agreement: Streamlined version for straightforward asset transfers with minimal complexity
• Simple Share Sale Agreement: Basic template for small-scale asset transactions with simplified terms

• Business Buyers: Companies or entrepreneurs looking to acquire specific assets from other businesses, often represented by their executives or procurement teams
• Selling Companies: Organizations divesting assets, usually represented by their board of directors or senior management
• Corporate Lawyers: Draft and review the Asset Purchase Agreement, ensuring compliance with Canadian business laws and protecting their clients' interests
• Accountants: Advise on tax implications and valuation of assets being transferred
• Due Diligence Teams: Investigate and verify the assets' condition, ownership, and any associated liabilities
• Regulatory Bodies: May need to approve certain asset transfers, especially in regulated industries like banking or telecommunications

• Asset List: Create a detailed inventory of all assets being purchased, including descriptions, locations, and current market values
• Due Diligence: Verify ownership, liens, encumbrances, and condition of assets through documentation review
• Purchase Terms: Determine price, payment structure, and closing conditions
• Employee Matters: Identify any staff transfers and associated obligations under Canadian employment laws
• Regulatory Requirements: Check for needed permits, licenses, or government approvals
• Transaction Timeline: Set key dates for inspections, payments, and transfer of possession
• Template Selection: Use our platform to generate a legally-sound Asset Purchase Agreement customized to your specific needs

• Parties Section: Full legal names and addresses of buyer and seller, including registration numbers
• Asset Description: Detailed list of assets being transferred, with clear specifications and exclusions
• Purchase Price: Amount, payment terms, and any adjustments or earnout provisions
• Representations & Warranties: Seller's guarantees about asset ownership, condition, and disclosed liabilities
• Closing Conditions: Required approvals, documentation, and steps before completion
• Indemnification: Protection against future claims or undisclosed issues
• Governing Law: Specify applicable Canadian province and dispute resolution process
• Execution Block: Signature spaces for authorized representatives with dates and witness provisions

When comparing an Asset Purchase Agreement with a Share Purchase Agreement, the key difference lies in what's being bought. An Asset Purchase Agreement lets you cherry-pick specific business assets, while a Share Purchase Agreement involves buying ownership stakes in the entire company.

• Liability Transfer: Asset purchases typically limit the buyer's exposure to the seller's past liabilities, while share purchases mean taking on all company obligations
• Tax Implications: Asset deals often offer better tax advantages in Canada, allowing buyers to step up the cost basis of acquired assets
• Complexity: Asset purchases require detailed inventory and individual transfer of each asset, while share deals involve simpler ownership transfer
• Third-Party Consents: Asset purchases may need multiple approvals to transfer contracts and licenses, unlike share deals where relationships typically continue unchanged
• Employee Relations: Asset deals allow more flexibility in choosing which employees to retain, while share purchases maintain all employment relationships