Transitional service agreement
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Business acquisitions.
(TSA).
A transitional service agreement is an agreement between a seller and a buyer of a business.
Under the transitional service agreement the seller continues to provide specified administrative services to the business after its sale, for a an pre-agreed period at a predetermined price.
Transitional service agreements are useful when the buyer - for example a newer or smaller entity - needs additional time to establish the necessary administrative and back office functions for the acquired business.
Transitional service agreements are sometimes known as transition service agreements.
