Our experienced team of commercial law specialists has extensive experience in assisting our clients with buying, selling and merging businesses.
Whether your transaction is large or small or involves the sale or purchase of assets, shares or a combination of both, we can advise and guide you through the entire process from initial enquiry stage through to completion.
Buying a business
If you are considering buying a business there are a number of essential steps that we are able to assist with. These include:
- Undertaking due diligence – Is the business you propose to purchase financially sound? Due diligence may encompass such things as reviewing the sales history, considering financial records including profit and loss statements, business expenses including wages and running costs (overheads), completing an inventory of all assets and liabilities and interviewing key personnel. If specialist advisers are called for we are able to refer you to experienced professionals.
- Securing finance – Sufficient funds will be needed to cover not only the purchase price for the business but also for Stamp Duty and possibly GST. We can advise you as to the amounts needed and if necessary assist you in completing loan or other finance documentation to ensure that you have the necessary funds in place prior to completing your purchase.
- Business structure – Before purchasing any business you need to consider which business model or structure will be most appropriate for the type of business you are buying. Options include conducting the business as a sole trader, purchasing in partnership with one or more other parties, setting up a company structure or trust or possibly even a combination of these options. Each option has advantages, risks and limitations and we can advise you on the most suitable structure prior with a view to not only limiting risk but also long term growth and potential.
- Contract documentation – Before purchasing a business we recommend you obtain legal advice to ensure that what is being offered by the Vendor for sale is actually the same as what you think you are purchasing. The optimal time to obtain advice and negotiate contract terms is before the contract is signed not after.
- After completion – Once contracts are signed and exchanged we can advise in relation to payment of stamp duty, registration of your business name and lodgement of any documents for registration such as commercial leases. We can also skilled at providing advice in respect of a range of ongoing business matters such as GST registration, taxation and other legal obligations, insurance needs including public liability and professional indemnity and protection of intellectual property and trademarks.
Selling a business
A key element to successfully selling a business is obtaining early legal advice to ensure that the sale proceeds smoothly.
For any sale of business there are multiple matters that need to be considered including:
- Preparation of contract documentation including confidentiality deeds (often needed prior to entering into any negotiations with a prospective purchaser);
- Calculation of the purchase price;
- Negotiating with prospective purchasers regarding terms of the contract including inclusions and exclusions;
- Structuring the sale – Does the sale involve the transfer of shares for part of the business or is it an outright purchase of the entire business?
- Consideration of what is included in the sale – Is it just the business name and goodwill or hard assets such as plant equipment and stock included in the purchase price?;
- Employment issues including whether existing employees are to be kept on by the incoming purchaser and liability for existing employee entitlements such as sick leave and annual leave;
- Whether there needs to be a transfer of contracts with suppliers and clients;
- Property considerations including lease arrangements for business premises;
- Costs of the sale such as broker commissions, legal fees, payment of current business debts and any costs associated with transferring a premises lease to the incoming purchaser (landlord’s expenses if payable under the lease);
- Additional considerations involved in buying or selling a franchise business; and
- Tax (including GST and capital gains tax) and stamp duty implications.
If needed, we are also to assist you in accessing specialist business advisers such as financial planners and business brokers.
Purchasing or selling a business can be a life changing event. As such, it is comforting to know that all legal aspects of the transaction are able to be handled by skilled and experienced legal professionals who will act with your best interests in mind at all times. We recommend you contact us as early as possible in the sale or purchase process to ensure that we are able to fully assist you with this important life event.