Buying or Selling a Business

Buying or selling a business may be one of the biggest decisions you will make, from both a financial viewpoint and in general – pair this with the complexities of buying or selling a business, and it can be a very stressful process!

It is crucial to get the right lawyer involved with your business sale or purchase and to get sound legal advice. Let our experienced lawyers make the purchase or sale process as smooth as possible for you. We will be your trusted partner in this exciting new journey.

Our services include:

Legal due diligence
Structuring advice
Negotiation and drafting of contracts, including any Terms Sheet, Sale of Business Agreement
Review of related legal documents, such as premises lease or supplier contracts
Advice on intellectual property and other legal issues
Assistance with transfer of ownership or lease and completion

Steps in buying a business

Due Diligence and Structuring

If you are buying a new business, we recommend undertaking due diligence. This is the process of investigating the business’s structure operating and financial records to ensure that it is a viable purchase, worth the price and identifying key future risks. You should always conduct your own due diligence, as well as seek financial due diligence advice and legal due diligence.

Some key risk areas from a legal perspective include:

No legal contracts in place, or easily terminated contracts in place with major customers
Other contract risks such as lack of supplier contracts
Being bound by unfavourable contracts, including leases
Intellectual property risks – e.g. brand is not registered with IP Australia or the brand is at risk of infringing another party
Domain name risks – if the key value of the business is in a domain name, there are laws in Australia where they can be claimed by someone who holds the registered trade mark
3rd party risks such as court proceedings or claims to equipment ownership

We can also provide advice as to the best structure to buy the business under, such as sole trader or company structures.

Contract review and negotiation

There will likely be multiple documents required to buy or sell a business, including a Terms Sheet, Sale of Business Agreement and transfer or variation agreements for any other documents you need to come with the sale, such as lease or supplier contracts. These documents should always be drafted or reviewed by an experienced lawyer representing you, and negotiated if necessary.

Once you have agreed to a Terms Sheet, the most important document for the purchase of a business is the sale contract as this determines what you are paying for and what remedies you have if there is anything unexpected (including after the sale).

Completion

Once the Sale of Business Agreement is signed by all parties, the sale will be settled on another date usually called the “Settlement Date” or “Completion Date” where the balance of the purchase price is paid, all the related contracts are signed and exchanged and the transfer forms (where relevant) are lodged.

Next steps to buying or selling a business

At The Legal Shop, we understand the complex legal issues that can arise during the sale or purchase of a business. Contact our experienced lawyers today to learn more about how we can help you avoid costly mistakes and achieve success in your business sale or purchase.