Are you a business owner considering selling your business? Or are you looking to buy a business? Roach Corporate Law can assist you through this exciting journey from start to finish. We have expertise in dealing with transactions for businesses of all shapes and sizes and across various industries, as evident in our recent involvement in the sale of Betta Home Living where we acted for the seller.There are many important aspects of selling a business that need to be considered by both the buyer and the seller and the process can be overwhelming. We are here to assist and walk you through the process. We would love to hear from you if you are selling or purchasing a business so that we can provide you with informed, tailored advice. Below are some helpful tips.Considerations of sale/purchasePrior to starting any business sale processes or negotiations, you need to be prepared for any decisions you may have to make, regardless of whether you are buying or selling a business. For example, you should consider whether the following assets of the existing business will be included or excluded in the sale:
- Existing stock and how it will be valued (it should be considered whether any stock is perishable);
- Intellectual Property (such as business names, logos, domains, patents, trademarks);
- Plant and equipment (for hired equipment, whether transfer of a lease might be required);
- Any existing premises leases (e.g. the land/physical building) or agreements regarding the business;
- Employees (will they be retained after the sale, and/or who will pay any accrued entitlements); and
- Any licences or permits regarding the business.It should be made clear (to both the buyer and the seller) in any agreement which assets (if any) are included in the sale and the overall purchase price.
Some other important aspects that may need to be considered include:
- Whether any non-disclosure agreement is required to allow for the buyer to conduct any necessary due diligence on the business;
- Whether the business is a franchise;
- If any transition assistance is to be provided by the seller (or employees of the seller) to the buyer for a certain period pre- and post-settlement;
- Whether a deposit will be required and if there is any vendor or other finance arrangements; and
- Whether the business’s ABN, ACN, or business name has any PPSR registrations against it.
To assist you in considering these questions (and the many others that arise!), Roach Corporate Law can provide you with a “Checklist for the Sale/Purchase of Business” which is completed prior to formal engagement of our services.
Where to start as a buyer
As a buyer you may also want to be protected by restraint of trade provisions in the Business Sale Agreement. For example, you may want to prohibit the seller from starting a similar business within a close proximity for a certain time, to prevent competition with their new business, and considering your purchase of their business in the first place. Including restraint of trade (also known as non-compete) provisions in the Business Sale Agreement is an important step in protecting the profitability of and good will in your new business.
Where to start as a seller
As a seller, you should be clear on the terms of sale that you want to put forth. You should also be clear on what your business and its assets are worth, and whether assets will be included in the sale. In most instances, a seller will want to sell the business as a ‘going concern’, so it is important to also consider what assets must be included within the sale to ensure that this can occur.Further, it is important to note that if the intended sale price is $300,000.00 or less, you must also supply the buyer with a Form 2 Disclosure Statement. This Statement is normally prepared by a conveyancer or an accountant, however, we can assist as necessary, whether that is communicating with the necessary parties regarding the preparation of this Statement, or preparing any sections in conjunction with the conveyancer and or accountant.
We can assist you in preparing (or reviewing) the Business Sale/Purchase Agreement, as well as any accompanying documents that may be required to complete the sale (including but not limited to any Lease documents, loan agreements, and third-party contracts such as with suppliers for the business). We are also able to assist with any negotiations required to finalise these documents. We can also assist throughout the settlement process, whether that be regarding discharging any necessary registrations on the Personal Property Securities Register, transferring the business name, or preparing the necessary settlement statements.We are here to guide you through each step of the process. Our aim throughout this process is to ensure that it is as smooth as possible, and we are here to answer any questions (whether big or small) that you may have along the way.If you require any assistance with the sale or purchase of a business, or if you need any legal advice, feel free to contact our team.