An asset purchase is when a corporation or an individual, known as the buyer, acquires some or all of the assets of a business. With an asset purchase, the buyer agrees to purchase, and the seller agrees to sell specific assets of the business. These could include inventory, equipment, facilities, contracts, real property, lease agreements, etc. A share purchase on the other hand, involves acquiring the shares of a corporation, resulting in ownership of the entire corporation, including assets, obligations and liabilities.
The following are essential details to include in any Asset Purchase Agreement:
- The parties to the asset purchase agreement
- What assets are being purchased
- The purchase price
- Representations and warranties
- Governing Law
- Closing Date
We always recommend that you consult with your accountant for income tax advice and G.S.T. advice before you decide to purchase or sell the assets or shares of a business. Blake Nichol represents clients by reviewing and drafting Asset Purchase and Sale Agreements and he would be happy to discuss your business transaction with you anytime.
