What the schedules have to name
Included assets. Excluded assets (often cash, personal vehicles, and a named lawsuit). Assumed contracts and the consents they need. Employee offers versus automatic transfer. Environmental allocation. The peg and true-up. A machine that is leased or customer-owned and still appears on the “included” schedule is a dispute waiting for close.
SBA 7(a) change-of-ownership can finance goodwill inside the $5 million box (Source: SBA). The APA still has to say which assets the lender’s lien will attach to.
Tax and allocation
Buyers want basis in Class V equipment. Sellers want residual in goodwill. Form 8594 reports the same allocation both sides must use. Purchase price allocation with heavy equipment is the owner for that fight. The APA should not contradict the form.
Census CBP 2023’s 284,452 establishments are mostly small enough that an asset sale is the default conversation (Source: Census CBP). Default is not destiny on a licensed, union, or government-contract file.
| APA exhibit | Typical contents |
|---|---|
| Included assets | Serialized M&E, eligible inventory, assignable contracts |
| Excluded assets | Cash, personal property, named claims |
| Assumed liabilities | Listed AP, specified contracts, accrued PTO if agreed |
| Peg / true-up | Method, count, dispute |
Does an asset sale dodge environmental or successor tax?
Not by slogan. Some states still have successor sales-tax rules. Transfer-act states have their own clocks. Counsel in the closing state confirms. This glossary will not invent a cell.
The IRS describes Form 8594 as the reporting vehicle for applicable asset acquisitions (Source: IRS). Educational information only.
What manufacturers forget to schedule
Customer-owned tooling that is in the building but not theirs to convey. Nested software licenses on the controls. Blanket POs that say “no assignment.” A union recognition that does not automatically follow iron. A quality certificate that sits on the entity, not on the press. Each of those needs a line: included, excluded, or “consent required.”
Employees are offers, not furniture. Write who gets an offer, who gets PTO treatment, and who is key. Stock purchase keeps the entity and often keeps those relationships with less re-papering. That can be the reason to choose equity. It is not a reason to skip the APA conversation on a C-corp that wants a step-up.
The glossary only names the contract. Asset versus stock is the fork.
Isolation
The glossary keeps APA and SPA on separate H1s. The FAQ holds the question. Jason Taken is a business broker. Counsel drafts the agreement you sign.
When structure is a real choice and not a slogan, book a confidential intro call.
Consents and certificates that sit on the entity, not on the press
Blanket POs, landlord waivers, software on the controls, and any contract with an anti-assignment clause belong in the letter so the APA is not the first time someone reads the boilerplate. Government vehicles are novation, not this list. If a consent will not arrive, decide whether that revenue is excluded, escrowed, or fatal.
ISO, IATF, AS9100, and many customer approvals name the legal entity. An asset buyer may need a gap audit and a bridge. Write that as a condition and a cost. A CIM should list included, excluded, and “consent required” rather than “typical asset deal.” Bring the anti-assignment clauses, the certificate names, and whether any iron is leased or customer-owned. Asset sale versus stock sale keeps the fork. Counsel drafts the APA. After the schedules are named, a confidential intro call is the conversion path.
What an APA is not
It is not a stock purchase agreement. It is not an automatic step-up without a CPA. It is not a way to move employees as furniture. Employees are offers, not assets. Write who gets an offer, who gets PTO treatment, and who is key. Customer-owned tooling in the building is not theirs to convey. Nested software licenses on the controls often stay with the vendor. Blanket POs that say “no assignment” stay on a consent list.
How it shows up: named assets in, everything else left with the seller unless assumed. A CIM should list included, excluded, and “consent required.” Equity can be cleaner when a certificate or a government vehicle makes re-papering worse. That is a reason to choose stock. It is not a reason to skip the APA conversation on a C-corp that wants a step-up. SBA 7(a) can finance a change of ownership inside $5 million, but credit will still ask which liabilities remain (Source: SBA).