Sell or Purchase a Business
The decision to sell or purchase a business is of strategic importance. It is a lifestyle or professional change and when done properly, means you are likely to receive a more favourable outcome. Receiving correct legal information enables you to make informed decisions. Discussing your business intentions with a lawyer, even prior to negotiations allows unforeseen issues to be identified. This allows the process of the transaction to be managed smoothly and without any nasty surprises after you have signed contracts.
The importance of using a lawyer is to ensure each interaction, contract and documentation is valid, legitimate and legal.
We are able to draft contracts that the buyer or seller needs to sign with the other owner. We can be used for legal advice, documentation purposes or various interactions.
WHAT SHOULD I CONSIDER WHEN SELLING A BUSINESS?
It is best to involve a business lawyer once you are thinking of selling your business due to the complexity. Our professional lawyers would advise you on what is required prior and during the transaction, identify any issues and the outcome to expect. This is due to dealing with regulatory authorities to transfer all certifications, permits and licences within the business. This can include, transferring liquor licences and food safety certificates, dealing with business employees and attending to employee entitlements.
With a practical approach to problem solving, we can help you with:
- Sale of Business Contracts, including preparation and advice
- Lease terms, including transfers and variations which will most likely require the need to obtain the consent of any landlord and deal with their requirements
- Transfers of licences
- Registration, cancellation and transfers of business names
- Arranging due diligence searches and inspections
- Organising and attending settlement
Selling a Franchise
Selling a franchise business in Australia has a different set of rules from selling an ordinary business. The franchise agreement you signed when you first purchased the business will set out the procedure you will need to follow. It is extremely important the sale of your franchise is conducted in line with this franchise agreement and legislation.
There are some key aspects that need to be considered when selling a franchise. They are:
- Notifying the franchisor for their approval prior to selling;
- Capital Gains Tax on eventual sale and other costs associated;
- Transfer of any lease/licence agreement or negotiation a new lease/licence; and
- Identifying ongoing obligations for you, even after the sale.
Engaging an experienced franchise lawyer and your accountant early in the franchise selling process will ensure issues are identified sooner. Our experienced lawyers can assist you negotiating through the various requirements to complete the sale of your franchise business smoothly.
WHAT SHOULD I CONSIDER WHEN BUYING A BUSINESS?
When buying a business, due diligence is required. Due diligence is researching information about the business. This could include:
- Suitability of the location of the business
- Identifying any local government and town planning requirements
- Key employees actively engaged in the business
- Various licensing and other agreements in place
- Plants, chattels and fixtures inclusions
- Client base
- Website and social media platforms
What documents should I ask for?
When purchasing a business, the seller will only produce the documents you ask for. However, it is up to you, as the purchaser, to undertake thorough due diligence. Our experienced lawyers advise on the type of information you need to ask the seller.
Below are some examples of documentation to assist you in your due diligence.
- Organizational documents for the business (e.g. incorporation documents, business licenses and registrations, etc.)
- Financial reports, including income statements and balance sheets, for the previous three (3) financial years
- Current income statements and balance sheets
- Revenue broken down by customer for the last 3 years
- Information on existing business liabilities
- Customer lists with confidential information blocked out as necessary
- Existing contracts that are material to the business
- Commercial lease or other property documents
- Rent rolls (if business involves a Real Estate Agency)
- Franchise agreements and other disclosure documents (if the business is a franchise)
- Employee and manager information, including entitlements
- Marketing and advertising materials and
- Legal records for previous or pending litigation, if any
Completing due diligence and having everything sorted in the beginning of the process ensures the transaction is much smoother, saving you money in the long run. We can assist in providing the right information on the types of documents to ask for. Once our lawyers receive the contract from the vendor’s lawyer, they will ensure everything that needs to be dealt with is set out in that contract.
Our professional lawyers provide tailored advice according to the needs of selling or purchasing a business. We ensure you are aware for your legal rights and ensure it is a smooth transaction so you get the result you are looking for.
If would like our experienced lawyers to provide you with personal, tailored advice, contact us by telephone or via email.
Would you like to know more?Contact our Commerical and Business Law expert Anthony Presutto on 1300 424 452 to receive personalised advice about your case.