Sale or Purchase of Business

1. Buying or selling a business is a significant life decision. It is vital that you protect your interests, whether as a seller or as a purchaser, throughout the complete lifecycle of the business – both before, during and after the transaction. Make sure that you know what you are selling/buying, ensure that the business sale/purchase agreement records that understanding, and make sure all parties to the agreement comply with it.
2. When you buy a car, you are likely to get it checked over by the RAA or a mechanic so that you don’t buy a “lemon“. Business Lawyers can assist a purchaser of a business with “due diligence” which means investigating the business to make sure you don’t buy a “lemon“.
3. Both the seller and the purchaser should obtain independent legal advice concerning the sale of business agreement. Generally, the seller’s lawyer will draft the sale of business agreement and the purchaser’s lawyer will review the document and enter into any negotiations that are required.
4. Although every clause in the sale of business agreement is important, some of the more obvious terms to highlight concern what is included in the business sale, how much the business will be sold for, how the purchase price will be apportioned (between plant, equipment and goodwill), when the purchase monies are payable, non-compete clauses, training periods, and continued employment of employees.
5. A non-compete clause is significant to protect a business purchase to ensure that the seller can not set up another business and take clients/customers.
6. It is important to carefully consider the tax consequences of the sale before agreeing on the deal and to obtain advice from your accountant.

For more information, contact us on 8523 8400 or email us at legal@rudalls.com.au.