Answers
What should an asset purchase agreement cover when buying a website?
Short answer: List every asset in a schedule, have the seller assign the IP, and get warranties that the revenue, traffic and ownership figures are true. Hold back part of the price in escrow against breaches, reference the non-compete, set out the handover, and leave pre-closing debts, taxes and refunds with the seller. Have a lawyer review it.
What is an asset purchase agreement in a website sale?
Most small websites, stores and SaaS businesses are sold as an asset purchase: you buy the domain, code, content, accounts and goodwill, not the seller's company. The asset purchase agreement (APA) is the binding contract that lists what you get, what the seller promises, how and when you pay, and what you do not take on. The letter of intent sets the deal terms; the APA makes them enforceable.
This is a buyer's checklist, not legal advice. Contract law differs by country and state, so have a lawyer who handles small business sales review the final draft.
What should the APA cover?
- Asset list (a schedule): domains, hosting, source code and repositories, content, design files, social and email accounts, subscriber and customer lists, supplier and contractor contacts, trademarks, inventory, and any software licences. Anything not listed is not clearly yours.
- IP assignment: the seller assigns copyright, trademarks and other rights in the content, code and brand, and confirms that freelancers and contractors who made them assigned their rights to the seller.
- Price and payment: amount, escrow, any holdback, seller note or earnout, and the conditions for each payment.
- Representations and warranties: the seller states that the financial and traffic figures provided are accurate, they own what they sell, there are no undisclosed penalties, claims or disputes, and the business complies with platform terms.
- Holdback or escrow: part of the price held back for an agreed period that the buyer can claim against for a breach of the warranties.
- Non-compete and non-solicit: either in the APA or a separate agreement it references. See non-compete terms.
- Handover: what moves when, the order, and the seller's support after closing (hours, length, response time). See the handover period.
- Excluded liabilities: the seller keeps debts, taxes, refunds and chargebacks for sales before closing, and claims arising from how they ran the business.
- Indemnity: the seller covers your losses from breaches of warranties and from excluded liabilities, ideally up to a stated cap.
- Closing conditions and dates, governing law, and how disputes are resolved.
How big should the holdback be?
These are our rules of thumb for businesses priced roughly $10k to $150k, not market data: 10% to 20% of the price, held for 30 to 90 days after the last asset moves. Use the upper end when the figures rest on screenshots rather than read-only access, when one customer, sponsor or platform drives most income, or when the seller's handover matters a lot. Hold it with the escrow service rather than with either party, and spell out how a claim is made and decided.
What should worry you in the seller's draft?
- No warranties on the numbers, or "as is" wording for the revenue and traffic you priced the deal on.
- Refusal of any holdback on a deal where the figures could not be verified directly.
- A vague asset list, such as "the website and related assets", with no schedule.
- Missing IP assignment for content or code written by freelancers or an agency.
- Liabilities moving to you, for example unpaid supplier bills, sales tax or refunds on orders taken before closing.
- Very short survival periods for warranties, for example claims allowed only for a few days after closing.
- The seller's company is not the party that owns the assets, or the person signing cannot show they control the accounts.
Most of these show up early in the listing itself. Paste it into the free red-flag checker; flags such as no connected data source or a top customer over 25% tell you which warranties and how much holdback to ask for.
What does a composite APA look like?
This is a composite example, not template legal text. A $52,000 small SaaS: Schedule 1 lists the domain, the code repository, the hosting account, the Stripe account (or a migration plan if it cannot move), the help-desk and email platforms, the customer list and the brand. The seller warrants that MRR of $2,100 and the churn figures shown in due diligence are accurate, that the code is original or properly licensed, and that no customer dispute is open. $7,800 (15%) is held in escrow for 60 days and can be claimed for warranty breaches. Refunds and chargebacks on charges before closing stay with the seller. The seller gives 60 days of support at up to 5 hours a week and agrees to a 24-month non-compete set out in a separate agreement referenced in the APA.
Frequently asked questions
Do I need an APA for a small website deal?
Yes, even for a few thousand dollars. A marketplace's standard terms may cover the payment, but they rarely list the assets, warranties and excluded liabilities of your specific deal.
Is the APA the same as the LOI?
No. The LOI is a short, mostly non-binding summary of terms used to start due diligence. The APA is the full binding contract signed at or before closing.
Should I use a template?
A template is a reasonable starting point for the structure, but the asset schedule, warranties and holdback have to fit the deal, and a lawyer should review the result before you sign.
Sources
- FirstPass Memo, red-flag checker rules, our own rules, published as /rules.json
- FirstPass Memo, seller question bank, October 2026 (general checklist), our own questions
Related
- Free red-flag checker
- What to include in an LOI
- Non-compete terms when buying a website
- How escrow works when buying a website
- How long should the handover period be?
- How to move the domain and hosting
- Red flag: no connected data source
- Closing adjustments when buying a website
- Glossary of listing terms
- More questions buyers ask
Get the 72-hour vetting plan: day-by-day steps after you spot a listing
Enter your email and the next page gives you the 72-hour vetting plan (web page and PDF) straight away, no waiting, along with the other free files: 11 seller question checklists (151 questions across eleven business types), the 72-hour vetting plan and a 14-column deal-tracker spreadsheet. We also email you the links so you have them later.
No newsletter: we send one email with your links,. Reply "stop" to hello@firstpassmemo.com to be removed. Looking at a live listing priced $10k–150k? Get a full memo: $79, pay after delivery instead; its confirmation page has the same downloads.
Composite examples are invented and labelled. Figures from other sites are quoted with a link and the date we read them; FirstPass figures are asking prices and seller-stated profit, not sale prices. Informational screening only, not investment, legal or tax advice.