The asset purchase agreement — buyer-side structure.

The APA dominates sub-$5M agency acquisitions for three structural reasons: selective liability assumption, the step-up in basis that drives 15-year amortization, and a simplified diligence scope confined to the acquired assets rather than the whole entity. The transfer set is consistent — eight categories typically move (the book of business, carrier appointments subject to consent, client files and management-system records, material vendor contracts, trademarks and goodwill, fixed assets, website and digital, and employee relationships via new offer letters) and six typically stay with the seller (cash and equivalents, marketable securities, real estate unless specified, vehicles, pre-closing receivables, and tax refunds). The allocation here isn't zero-sum: the buyer's depreciation benefit often outweighs the seller's marginal-rate disadvantage, so a reasonable allocation serves both parties.

§ 01 · Assumed vs. excluded liabilitiesName them all.

The drafting discipline that makes the APA safe is absolute: every excluded liability should be expressly named. Relying solely on a general "excluded liabilities" catch-all is risky — specific enumeration forecloses later disputes, and the catch-all is a backstop, not the primary mechanism. The mirror applies to the assumed side: enumerate the assumed liabilities specifically rather than leaving the buyer exposed to an argument that something was implicitly taken on.

§ 02 · Residual successor liabilityWhat an asset deal can't fully escape.

Even in an asset deal, four residual successor-liability exposures survive. State-law doctrines — "mere continuation" or fraud-on-creditors — can pierce the structure. Environmental exposure under federal and state law, rarely relevant to agencies but real. Tax successor liability for unpaid sales, payroll, or franchise tax — which is why clearance certificates belong in the pre-close checklist. And E&O successor liability when the buyer operates under the acquired brand with the acquired clients, the one most relevant to agencies, mitigated by E&O tail coverage. None of these undoes the asset structure's firewall, but each is a reason the buyer can't treat "asset sale" as a complete answer to pre-close risk.

§ 03 · The five provisions to negotiateAnd the non-compete allocation.

Five APA provisions are the buyer's to negotiate. The purchase-price allocation (the IRS Form 8594 schedule). The assumed-liabilities schedule, enumerated specifically. The excluded-liabilities section, mirroring the assumed list with both a catch-all and an enumerated list. The transition-services scope, duration, and pricing. And the employee transition — offer letters, dual-employment avoidance, accrued PTO, COBRA, and non-compete/non-piracy terms. Each is a place where the generic template leaves value or exposure on the table.

§ 04 · The allocation is shared workNot a fight.

The asset-class allocation reads like a zero-sum negotiation but usually isn't. The buyer's depreciation benefit from allocating to amortizable intangibles often outweighs the seller's marginal-rate disadvantage on the same dollars, so a reasonable allocation can serve both sides — which is why the productive move is to treat the Form 8594 schedule as a jointly engineered exhibit rather than a tug-of-war. The exception is the non-compete line, where the interests genuinely diverge (ordinary income for the seller, amortizable deduction for the buyer), and that's the line to negotiate specifically while keeping the rest of the allocation collaborative. Get the structure and the schedule right and the APA does what it's supposed to: transfer the book cleanly, firewall the past, and set up the tax position for the hold.

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