Asset Purchase Agreements (APAs) When Selling Through Empire Flippers
Updated on October 17, 2023
When buying an online business, you have two options.
You can buy it directly from a private seller, either through your personal network or via social media groups. In this case, most people don’t use an APA but might use some sort of escrow.
The second option is to buy a business through a broker. Brokers sell dozens of businesses every month, so they usually have established Asset Purchase Agreement contracts and processes in place. These legal documents show the assets being transferred from the seller to the buyer.
Each broker has a slightly different APA process, so in this article, we’ll walk you through how APAs work when buying a business through Empire Flippers.
What Is an Asset Purchase Agreement?
Before we go any further, here’s a quick explanation of what an APA actually is.
An Asset Purchase Agreement is a legal contract that outlines the terms and conditions for one party (the buyer) to buy specific assets, like domains, equipment, or a business, from another party (the seller).
It defines what’s being purchased, the price, and other important details to ensure a clear and binding agreement between the buyer and seller.
If you’re buying a business, an APA provides clarity about what exactly is included in the sale – from email lists and software licenses to intellectual property rights.
In essence, an APA serves as a roadmap for both buyer and seller during the purchase of a business – ensuring that everyone’s on the same page about which assets are changing hands.
Empire Flippers’ APA Process
At Empire Flippers, our goal is to make the acquisition process as smooth as possible for buyers and sellers.
That’s why we offer two main APA options to our customers.
Standard APA
We have simplified the acquisition process by including our standard APA in our Terms of Use Agreement document.
Details about our standard APA can be found starting from section 8 of the Terms of Use Agreement document.
If you want to supplement our Terms of Service to cover specific terms or clauses, our offer page includes a box that lets you add specific terms to the deal.
If you’d like to receive your own copy of the APA agreement, we will need to draft a custom APA for you.
Drafting new legal documents can take some time, so we encourage buyers who wish to go down this route to let us know as soon as possible so that it doesn’t delay the sale of the business.
The APA was carefully created by our lawyers to ensure airtight protection for buyers and sellers.
We understand that every deal is different which is why we have created a text box within the offers page in our platform that allows you to add your own specific terms to the deal.
The majority of the deals done on our marketplace were done using our standard APA.
Custom APA
External APAs are most commonly used for 7+ figure deals that have a lot of moving parts and therefore require a more detailed APA. These types of deals are typically only entered into by very experienced buyers.
Of course, you can choose to draft your own APA, or have a lawyer draft one for you, however, we will need to review that APA before it’s signed by either party. We do this to ensure that no bias is shown to either the buyer or seller.
We advise against using templated APAs that you find online as they tend to be very generalized and are not tailored toward the specific online business model that you are buying.
As a result, few buyers choose to go down this path as our standard APA is robust enough to cover a majority of the businesses on our marketplace.
Since buyers rarely opt to use an external APA, you’ll need to let us know as early as possible if you do choose this course of action to avoid any delays.
Simplify the Acquisition Process by Using Our APA
As an online business buyer or seller, you have enough on your plate.
Our streamlined APA process gives you one less thing to worry about, leaving you to focus on the exciting parts of the process.
Buyers can dedicate their time to figuring out how they’ll grow the business post-acquisition, and sellers can focus on how they’ll spend the proceeds of the sale. That’s a win-win for everyone involved.
