An asset purchase agreement is a contract in which a buyer (person or entity) agrees to purchase assets from the seller (a person or entity) for a stated price. Asset purchase agreements are usually used when one business wants to purchase some but not all of the assets of another business, and when the buyer might be concerned about taking on liabilities associated with the selling company. These are a couple of ways in which an asset purchase agreement is different from a merger agreement in which two or more companies merge to create a new combined organization, or an acquisition agreement in which the buying company acquires the selling company in its entirety.

In Pennsylvania (PA), an asset purchase agreement is a legal document that facilitates the sale of a business's assets without the sale of the business entity itself. This type of agreement is particularly useful for buyers who wish to acquire specific assets, such as equipment, inventory, or intellectual property, without assuming the liabilities of the seller's company. Unlike a merger or acquisition, where entire companies are combined or one company takes over another along with all its liabilities, an asset purchase agreement allows for a more selective transaction. The agreement outlines the assets to be sold, the purchase price, and the terms and conditions of the sale. It is important for both parties to conduct due diligence and to clearly specify which assets and liabilities are included in the transaction to avoid future disputes. The agreement must comply with Pennsylvania state laws, including proper asset valuation and adherence to any specific regulations that may apply to the assets being purchased. Additionally, certain asset transfers may require notification or approval from government agencies, and tax implications must be considered for both the buyer and the seller.