BUYING AND SELLING A BUSINESS
Buying or selling a business can be complex and requires strict compliance with the Contract terms by both parties to ensure a smooth transition.
Whether you’re buying or selling, there will be numerous legal issues that need to be considered, monitored and/or satisfied, at various stages, to lawfully complete the transaction. Ignoring, or simply not understanding, the importance of essential steps in a business transaction can quickly become expensive and very stressful for the parties involved.
Time is of the essence which means that if time lines are not kept there are serious ramifications such as breaches of contract and possible termination of the contract with the potential of monetary loss.
Before signing a Business Contract, we recommend that you:
- seek professional advice from an accountant or business advisor, to determine:
- the ideal legal entity* (e.g. corporate, trust, partnership or as an individual) to acquire and operate the business;
- your financial capacity to buy the business; and
- any tax implications that may apply;
*ownership re-structure of a business after the Contract is signed may incur unnecessary taxes, additional transfer duty and professional fees.
- seek legal advice on all documentation associated with the purchase prior to signing it to ensure the intention of the parties is accurately reflected in the agreement. This will allow us to gain an understanding of your interests.
Will you also be buying commercial property? You can talk to our conveyancing lawyers to discuss this and any relevant leasing concerns.
Once you have decided to buy a business, it is crucial that you satisfy yourself as to the value of the business and any risks associated with buying it. This assessment is usually undertaken prior to signing a Business Contract or where the Contract terms allow, during a Due Diligence period, after the contract is signed to allow investigations to occur to ensure the business is what the seller has portrayed it to be.
Prior to signing the Contract or during the Due Diligence Period, we will:
- review leases and/or franchise documentation
- provide legal advice in accordance with the Retail Shop Leases Act 1994 (where applicable)
- conduct necessary searches relating to the business and lawful ownership
- assist with licensing, permit and registration requirements
- provide general guidance and advice throughout the transaction
- liaise with the solicitors for the Lessor and/or Franchisor, your financier (if applicable) and the solicitors for the Seller to the point of completion
SELLING A BUSINESS
It is just as important to seek professional legal advice when selling a business, particularly in the following areas:
- Preparing legal documentation for the buyer
- Negotiating the contract and/or special conditions
- Drafting the sale agreement
- Assignment of the tenancy
- Calculating appropriate adjustments on settlement
- Transference of licences
- Retention or sale of registered trademarks
- Notifying the relevant offices and commissions of the sale
We have the experience to either draft or comprehensively review a Business Contract, as well as undertake and successfully complete all aspects of either buying or selling a business.
FREE 30 MINUTE CONSULT
We invite you to contact us at MCG Legal for a FREE 30 Minute consultation to discuss matters related to buying and selling a business.