Transition services agreement (TSA)

Most small business sales assume the seller walks away once the deal closes, sometimes staying on informally for a few weeks to answer questions. A TSA formalizes that support into a real contract, with defined services, a defined end point, and usually a fee, so the arrangement does not turn into an open-ended, uncompensated obligation on the seller or a source of friction over what was actually promised.

What typically goes into one

• The exact services covered — bookkeeping, payroll processing, IT support, a specific customer or supplier relationship
• How much time the seller, or their staff, commits, and at what rate, if any
• A clear end date or wind-down mechanism, rather than an indefinite arrangement
• What happens if a service is not delivered adequately

Why it needs its own document

Folding transition support into the purchase agreement as a vague promise to assist with an orderly transition tends to produce disagreement later about what was actually owed. A standalone TSA with defined scope and term gives both sides something specific to point to, and keeps the transition arrangement separable if the underlying deal ever ends up in dispute.