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Business + Commercial Property Conveyancing

Buying or Selling a Business?

Buying or selling a business is exciting but it also involves a detailed process with many factors and issues that must be considered. Not knowing the legal issues involved in these commercial property transactions can lead to stress down the track, not to mention financial and legal problems.

All too often we see badly drawn sale of business contracts and also vendors and purchasers who have entered into transactions without legal advice and found themselves in a difficult position.

Whether you are a vendor or a purchaser, it is crucial to engage an experienced commercial property conveyancing lawyer who can help you negotiate the business sale process, while ensuring your interests are protected and your risk minimised.

  • What does a business sale involve?

    A business sale can include the transfer of any one, some or all of the following:

    • Business name and/or company name
    • Plant and equipment
    • Goodwill
    • Intellectual property and associated licences
    • Stock in trade
    • Right to occupy premises
    • Key customer contracts
    • Equipment leases and service agreements
    • Employees
    • Permits

    Each party will have their own views on the value of each component and will reach an agreement on this throughout the negotiations.

  • What do I need to consider before selling my business?

    Selling a business is more involved than many people realise. Statutory requirements are associated with running a business and you will need to make sure you are in compliance before the sale – particularly because any purchaser may require warranties to this effect. You will also need to consider whether your business structure is suitable for sale and whether your assets are transferable. Your lawyer can help restructure parts of your business if required.

    As a vendor, it is crucial to engage a business conveyancing lawyer from the beginning. Many vendors do not do this and find themselves in difficulty later on. Your lawyer can help provide initial structure advice (e.g. will you be selling the business in its entirety as a going concern, or will you be inviting employees to purchase an equity stake in the business?), prepare a confidentiality deed before negotiations with potential purchasers, and also offer guidance during negotiations on issues including employment, contract transfers and leasing. You will also need expert advice to determine sale price and help with tidying up your business before sale.

    Many aspects of business sales can be negotiated and it is important to engage an experienced lawyer to negotiate on your behalf. This is particularly important when it comes to aspects like vendor warranties (as to the business’ financial position, intellectual property, employees etc) and any restraints the purchaser may wish to impose on you after the sale. Otherwise you may find yourself in legal or financial trouble later on.

  • What do I need to consider before buying a business?

    As a purchaser, you must conduct due diligence before the sale. This is the formal process by which the business’ assets and liabilities are evaluated. If due diligence is not conducted comprehensively, you may find yourself in difficulty when you later discover that, for example, the business has liabilities that you cannot meet and that should have been considered in the sale price.

    It is best to have an experienced lawyer conduct due diligence for you. The kinds of things your lawyer will ask for during this process include:

    • Financial documentation showing how profitable the business is and the costs involved in running it, as well as the value of all the assets
    • Key contracts
    • Leasing arrangements
    • Employee arrangements, including employment contracts, entitlements etc
    • Details of any current or threatened legal action regarding the business or company
    • Other liabilities (eg outstanding debts, refunds and warranties)
    • Evidence of compliance with certain legislation or regulations
    • Currency of licenses and/or permits
    • Evidence of who owns the business and whether they have a legal right to sell it
    • Industry or general requirements affecting the business

    You should also consider the structure of ownership. A business may be purchased in the name of a sole trader, partnership, company or trust, depending on your circumstances. Your lawyer can advise you on the best structure to use, and can consider aspects of taxation and asset protection to safeguard your position.

    During negotiations, you will need to consider various aspects such as restrictions: otherwise the vendor may approach the business’ clients after the business is sold or compete with you. Your lawyer can advise you on the appropriate restrictions to ask for in your circumstances.

    Your lawyer can also help you assess the following risks:

    • Employment issues including the departure of key individuals from the business
    • Inheriting plant and equipment that is faulty or obsolete
    • Preservation of the goodwill or reputation of the business
    • The business may have no real intellectual property that is transferable, or it may have failed to sufficiently protect its intellectual property

Why choose Slater and Gordon?

Whether you are selling or buying a business, the role of our experienced commercial property lawyers is to facilitate the process and identify and limit your risk. Without sound legal advice, your deal may not go through or you may find yourself with legal or financial problems, now or in the future.

We'll guide you through the commercial conveyancing process and make sure you understand your rights and obligations throughout.

Our experience covers all aspects of business sale transactions, and we can help with:

  • Buying or selling a business
  • Confidentiality agreements
  • Due diligence searches and inspections
  • The best business structure for you
  • Negotiating essential terms and special conditions
  • Preparing or reviewing contract of sale of business
  • Transfers of lease
  • Liquor licence applications and transfers
  • Breaches of contract
  • Litigation
  • Employment contracts

By choosing us, we promise to:

  • Minimise stress
  • Negotiate on your behalf
  • Conduct due diligence for you
  • Prepare or review all necessary documentation
  • Ensure that your interests are protected and your risks minimised
  • Aim to ensure that the sale will leave you in the best possible position, financial or otherwise

Make an enquiry

If you have a question, want some more information or would just like to speak to someone, make an enquiry now and we’ll be in touch with you very soon.

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