Purchasing a Business

The purchase of a business usually involves the buying of tangible assets such as plant and equipment, and intangible assets such as goodwill, trademarks, and copyright. When you purchase a business there can also be a transfer of contractual rights such as leases, licences, permits, registrations, supply agreements, domain registrations and any other agreements the business might have. The purchaser can request these transfers to be in a sales contract and occur before settlement. The proprietor of the business name also needs to apply to Australian Securities and Investment Commission (ASIC) for a transfer of the business name to the purchaser.

The purchase of the business might involve more than one contract, which in combination constitutes an agreement between the vendor and purchaser to transfer the business. The vendor supplies the necessary capital infrastructure for the business to continue to operate including tangible and intangible assets. The purchaser can then carry on the purpose of the business post sale.

When buying a business there are many different steps that need to be taken before settlement can occur. By engaging a business lawyer, they can help you establish:

A heads of agreement
A contract of sale
A call option
A non-disclosure agreement (NDA)
A biding contract for sale

It can be a very exciting time when settlement occurs, and the vendor has met the obligations under the contract. This is also often referred to as the day of supply which usually occurs on the day of settlement but can occur when effective control of the business passes to the purchaser. The purchaser then assumes complete control and possession of the business. However, prior to settlement, a business lawyer can help you prepare by:

Negotiating the terms of any initial deposit.
Corresponding with the other solicitor regarding settlement and other requirements.
Assisting with the due diligence period including conducting any remaining searches on the business.
Arranging a new contract between the business premises landlord and the purchaser of the business, as well as monitoring the lease process.
Liaising with any financier to ensure funds are ready for settlement.
Organising any documentation needed for settlement.
Ensuring the Personal Property Securities Register (PPSR) has been discharged by settlement.
Ensuring the transfer of the business name, telephone, website, domain name, social media accounts and other assets such as vehicles.
Transferring or ensuring the transfer of funds.
Putting settlement into effect.
Advising you of the risks and obligations associated with any agreement you enter into.

Any information on this website is general in nature and should not be taken as personal legal advice. We recommend that you speak to a lawyer about your personal circumstances.