Asset purchase agreement (APA) (also known as a business purchase agreement) meaning

An asset purchase agreement (APA), also called a business purchase agreement, is the contract by which a buyer acquires specified assets of a target business, rather than its shares. Used across England & Wales, Scotland, Northern Ireland and Ireland, it is not defined by statute and is a descriptive term used in M&A and business transfers. Key legal features include: identification of transferred assets and excluded assets; the purchase price and adjustment mechanism (completion accounts or locked box); allocation or assumption of liabilities (if any); warranties and indemnities; conditions precedent and completion mechanics; tax treatment (including VAT/transfer of a going concern (TOGC)); treatment of employees under TUPE; third-party consents; and restrictive covenants. It provides for the transfer of title by the appropriate method for each asset class (for example, assignment/novation of contracts, assignment of intellectual property, delivery of chattels, and conveyance of land). Jurisdictional notes: in Scotland, transfer formalities differ (for example, assignation and intimation; disposition and registration in the Land Register; delivery/tradition). In England & Wales and Northern Ireland, transfers typically complete by assignment/novation and deeds for land; in Ireland, similar common law principles apply with local registration and tax rules. The APA is the key document in an asset sale transaction.