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The Asset Purchase Agreement is the legally binding contract that closes every website acquisition. Unlike the LOI (which is largely non-binding), the APA is the document that matters — it defines exactly what transfers, what the seller warrants about the business, and what happens if something goes wrong after closing. This guide walks through every major clause so you can review, negotiate, or draft one with confidence. See also: due diligence guide, acquisition checklist, escrow guide, website transfer guide.
An Asset Purchase Agreement (APA) is the binding contract in which a buyer purchases specific assets from a seller, rather than buying the seller's legal entity. In website acquisitions, this almost always means buying the domain, website files, brand IP, traffic, revenue contracts, social accounts, and customer/subscriber lists — not buying the seller's LLC or corporation.
The APA is distinct from an entity purchase, in which the buyer acquires the entire legal entity (including its liabilities). Most website acquisitions use asset purchase structure because it lets the buyer cherry-pick the assets they want while leaving behind any undisclosed liabilities in the seller's entity.
The APA is signed after due diligence is complete and the LOI has been agreed. It is the final gate before funds are wired and assets transfer.
The APA should reflect reality, not aspirations. Finish all due diligence — revenue verification, traffic audit, legal review, technical inspection — before a word of the APA is drafted. Issues discovered in due diligence become either negotiated representations or price adjustments in the agreement. Drafting before due diligence is complete almost always requires a costly re-draft.
The Schedule of Acquired Assets must exhaustively list every asset transferring to the buyer: the domain name and all subdomains, hosting accounts, website files and databases, social media accounts, email list and ESP account, affiliate and ad network accounts, trademarks and brand IP, source code repositories, software licenses, and any physical assets. Anything omitted from the schedule is not legally part of the deal.
Representations are the seller's contractual assurances about the business. Key reps in a website APA: revenue figures are accurate; there are no undisclosed legal proceedings; the seller has full authority to sell; there are no liens on the assets; the site has no Google penalties or manual actions; all ad and affiliate accounts are in good standing and transferable; the seller is the sole IP owner.
For tax purposes, both parties must allocate the purchase price across asset classes (goodwill, IP, equipment). For website acquisitions, the allocation typically falls heavily on goodwill and IP. Buyers benefit from allocating more to depreciable assets (Section 197 amortization over 15 years); sellers generally prefer goodwill allocations taxed at long-term capital gains rates. Both parties file IRS Form 8594 and the allocations must match.
A non-compete prevents the seller from recreating a competing site in the same niche for 2–5 years. Without one, the seller could immediately rebuild the same asset. For content sites, specify the topic categories and key keywords in scope. For SaaS, specify the feature set and customer segment. A non-solicitation clause prevents poaching customers, contractors, or employees.
Indemnification defines what happens if the seller's representations prove false post-closing. Set the cap (typically 10–30% of purchase price), the survival period (typically 12–24 months), and a basket/deductible (minimum claim threshold). An escrow holdback (5–15% of price held for 3–12 months) provides practical security — claims offset the holdback before it releases to the seller.
Specify how long the seller will support the buyer post-closing (typically 30–90 days), what they are obligated to do (answer questions, assist with transfers, introduce contractors), how many hours per week, and whether the seller is compensated. For SaaS, specify what technical documentation must be delivered and in what format.
Both parties sign the APA via DocuSign or equivalent, then the buyer funds escrow. The seller initiates all asset transfers (domain, hosting, social, ad accounts, email list). Once the buyer confirms receipt of every asset in the schedule, they release escrow. Do not release escrow before confirming control of all assets.
| Clause | What it covers | Binding? |
|---|---|---|
| Asset schedule | Exhaustive list of every asset transferring to the buyer | Yes |
| Purchase price | Total consideration and payment structure (cash, seller note, earnout) | Yes |
| Purchase price allocation | How purchase price is divided across asset classes for tax filing | Yes |
| Representations & warranties | Seller's assurances about revenue, traffic, ownership, and legal status | Yes |
| Non-compete clause | Prevents seller from recreating competing site for 2–5 years | Yes |
| Non-solicitation clause | Prevents seller from poaching customers, staff, or contractors | Yes |
| Indemnification | Buyer's recourse if seller representations prove false post-close | Yes |
| Escrow holdback | Portion of price retained in escrow as security for post-close claims | Yes |
| Transition period | Seller's post-close support obligations — duration, hours, deliverables | Yes |
| Closing conditions | What must happen before the deal is considered closed | Yes |
| IP assignment | Formal transfer of all IP rights — domain, code, brand, content | Yes |
| Governing law | Which state's law governs disputes | Yes |
If a social media account, email list, or affiliate account is not listed in the schedule, the seller is not legally obligated to transfer it. List every asset by name and URL — do not use general language like 'all related social accounts.'
Representations like 'revenue is approximately $X per month' are almost unenforceable. Specify the exact trailing-twelve-month revenue figure, the revenue sources, and the time period covered by the representation.
Representations that expire at closing give the buyer zero protection. Set an explicit survival period (12–24 months) after which claims for misrepresentation are time-barred.
A non-compete that says 'cannot start a competing website' is too vague. Specify the niche, key topic categories, and geographic scope. Courts regularly void overbroad non-competes — if the scope is clear and reasonable, it is more likely to be enforceable.
Some buyers feel social pressure to release escrow quickly after signing. Only release funds after you have confirmed control of the domain, hosting, all social and ad accounts, the email list, and any source code repositories. Partial transfers are not completed transfers.
An APA that closes without defining the seller's post-close obligations leaves the buyer without recourse if the seller becomes unresponsive. Specify the number of hours per week, the duration, and what constitutes adequate support — or structure a portion of the purchase price as a transition payment.
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