Legal Documents Required to Sell a SaaS Business

For founders planning to sell a SaaS (Software as a Service) company, legal readiness is just as critical as product-market fit or recurring revenue. Behind every successful transaction lies a suite of carefully drafted legal documents—each serving a specific role in facilitating due diligence, protecting value, and ensuring a clean transfer of ownership. Overlooking even one of these documents can result in delays, valuation reductions, or post-closing liabilities.

This guide outlines the essential legal documentation required to sell a SaaS business, helping founders, legal counsel, and deal teams prepare for a smooth exit process.

1. Non-Disclosure Agreement (NDA)

The M&A process typically begins with an NDA—setting ground rules for confidentiality before sensitive data changes hands. In SaaS deals, this includes source code, product roadmaps, customer data, and financial performance. A robust NDA protects the seller’s competitive position and ensures that potential buyers don’t misuse privileged information during early-stage discussions.

2. Letter of Intent (LOI)

Once interest becomes serious, a Letter of Intent formalizes preliminary deal terms. Though non-binding, the LOI serves as a framework for negotiations, typically outlining the purchase price, structure (asset vs. stock), key contingencies, and exclusivity period.

For SaaS transactions, the LOI often includes language around ARR or EBITDA multiples, customer retention metrics, and any conditions tied to recurring revenue streams. It sets the tone for diligence and post-LOI negotiation leverage.

3. Asset Purchase Agreement (APA)

The Asset Purchase Agreement is the definitive legal contract governing the sale. It specifies what assets are included—such as the software platform, customer contracts, trademarks, and codebase—and what liabilities, if any, are excluded. For SaaS companies, clarity around IP ownership, service continuity, and customer contract assignment is paramount.

Key sections often include:

• Representations & Warranties (e.g., ownership of code, no IP infringement)
• Indemnification Provisions (addressing post-closing disputes)
• Earn-Out Mechanics (if value is tied to future milestones)

4. Bill of Sale

This document formally transfers title of the assets being sold. It’s a simple, yet necessary piece of legal infrastructure that affirms the buyer’s rights to both tangible and intangible property. In SaaS deals, this includes ownership of customer lists, proprietary code, software licenses, and infrastructure—whether hosted on-prem or in the cloud.

5. Transition Services Agreement (TSA)

A TSA outlines the post-closing support the seller agrees to provide—such as assisting with platform migration, customer transitions, or knowledge transfer. This is especially critical in SaaS, where founders and technical teams may be needed to preserve service continuity or manage integration risks.

Typical TSA terms cover duration, service scope, payment (if applicable), and responsibilities of each party.

6. Employment and Consulting Agreements

Retaining key personnel—founders, developers, customer success leads—is often essential to buyer confidence. Employment or consulting agreements define compensation, responsibilities, and duration of post-sale engagement.

They also include protective clauses such as:

• Non-compete and non-solicitation provisions
• Incentive alignment via retention bonuses or earn-outs
• At-will employment or fixed-term contracts

7. Intellectual Property Assignments

IP ownership is the bedrock of SaaS valuations. IP assignment agreements legally transfer patents, trademarks, copyrights, trade secrets, and domain names to the buyer. If the company used open-source software, sellers may also need to make representations about compliance with relevant licenses (e.g., MIT, GPL).

This step should also account for work performed by contractors or offshore developers, ensuring all IP is assignable and uncontested.

8. Customer Consents and Notifications

Many SaaS contracts contain clauses that prohibit assignment without customer approval. As such, buyers may require that the seller secure written consent or provide formal notifications before closing.

In addition to contract law, privacy regulations like GDPR or CCPA may require informing customers about data transfers. Compliance here is both a legal and reputational imperative.

9. Closing Documents

The final phase of a transaction includes execution of multiple closing documents to complete the legal transfer and fulfill post-closing obligations. These may include:

• Closing Statement: Final tally of funds and adjustments
• Escrow Agreement: Terms for holdbacks or performance-based payouts
• Board and Shareholder Resolutions: Authorizing the sale
• Legal Opinions: Certifying authority and enforceability of key agreements
• Ancillary Documents: Including IP releases, non-disparagement agreements, and confidentiality reaffirmations

Conclusion

Selling a SaaS business is a high-stakes legal exercise. Each document—whether it’s the LOI, APA, or IP assignment—plays a role in protecting value, minimizing risk, and enabling a smooth handoff. Legal gaps or vague provisions can quickly derail negotiations or lead to post-sale exposure.

Firms like iMerge specialize in helping SaaS founders navigate this legal landscape with precision—ensuring every document is properly structured and every stakeholder protected.

Founders navigating valuation or deal structuring decisions can benefit from iMerge’s experience in software and tech exits — reach out for guidance tailored to your situation.