Selling a Business

Selling a business can indicate a change in your life as you retire or enter a new phase in your career. A sale of a business usually involves the sale of tangible assets such as plant and equipment, and intangible assets such as goodwill, trademarks, and copyright. When you sell a business, you are also transferring contractual rights such as leases, licences, permits, registrations, supply agreements, domain registrations and any other agreements the business might have. As the vendor, you should be prepared that the purchaser will require these transfers to be in a sales contract and occur before settlement. The proprietor of the business name will also need to apply to Australian Securities and Investment Commission (ASIC) for a transfer of the business name to the new owner.

The vendor supplies the necessary capital infrastructure for the business to continue to operate including tangible and intangible assets. This allows the purchaser to carry on the purpose of the business post sale. In some cases, the vendor will also need to prove ownerships of any plant and equipment that is being used, as well as any materials involving copyright. Prior to selling the business, the vendor will need to explain to the purchaser any trademarks, business or trading names and logos that belong to the owner. The vendor will usually be asked to sign a competition restraint. Key employees of the vendor might also need to sign a deed of restraint of competition.

When selling 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

Settlement also known as the day of supply, occurs when the vendor has satisfied the obligations under any contracts or agreements. The purchaser then assumes control and possession of the business. Prior to settlement, a business lawyer will help you prepare by:

Ensuring an initial deposit has been made.
Corresponding with the other solicitor regarding settlement and other requirements.
Organising any documentation needed for 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.

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.