1. Start With the Right Advisory Team
A successful business sale begins before any agreement is signed. Engaging a lawyer and accountant early allows you to minimise the risk of post‑sale disputes, identify legal or financial issues that could delay settlement, and present your business in a strong position to potential buyers. These professionals help ensure favourable sale terms, accurate financial information, and a smooth overall process. Even small business owners benefit from early advice, given the time, effort, and investment which has typically been involved in the business.
2. Preparing a Strong Agreement for Sale and Purchase
A well‑drafted Agreement for Sale and Purchase forms the foundation of your transaction. Your lawyer will ensure the agreement clearly defines what is being sold – such as assets, stock, intellectual property, contracts, and goodwill – and together with your accountant will ensure that the purchase price is allocated appropriately. They also ensure the warranties are workable, the terms reflect your intentions, and you are protected from future liability. Even if the purchaser’s lawyer prepares the agreement, your lawyer should always review it before you sign.
3. Employees: Managing Legal Obligations and Protecting the Business
Employee matters play a critical role in any business sale. Before going to market, you should confirm that every employee has a signed employment agreement, personnel files are up to date, and leave balances are accurate. It is equally important to understand which employees are likely to transfer to the purchaser and to meet any notice or consultation obligations. These matters can influence both the purchase price and settlement timeline. In some cases, a purchaser may ask you to remain in the business for a short period to support a smooth transition, and these arrangements must be clearly documented within the Agreement for Sale and Purchase.
4. Lease and Premises Considerations
If your business operates from leased premises, your lease must be properly documented before a sale proceeds. This includes ensuring there is a current Deed of Lease in place, confirming the remaining term, and understanding renewal rights. You will need landlord consent for an assignment of the lease, and in some situations, it may be beneficial to negotiate a surrender of the current lease and new lease for the purchaser to avoid ongoing personal guarantees. Landlords are likely to require information about the incoming purchaser to assess their suitability. Your lawyer will guide you through this process and help limit your future exposure.
5. Commercial Contracts and Supplier Agreements
During due diligence, purchasers expect clarity about key commercial relationships. This includes supplier contracts, customer agreements, equipment leases, and any other arrangements that may need to be assigned or novated. Your lawyer will help review these documents to confirm whether assignment is permitted and identify any restrictions, obligations, or notice requirements that could affect the sale.
6. Security Interests and the PPSR
Before settlement, any security interests registered against the business assets on the Personal Property Securities Register (PPSR) must be discharged. Your solicitor will identify relevant financing statements, work with lenders to arrange discharges, and ensure that the purchaser receives the assets free of encumbrances.
7. Protecting and Assigning Intellectual Property
Intellectual property – such as your brand, logo, domain names, website, and proprietary processes – often makes up a significant portion of a business's value. Your lawyer can assist in confirming ownership, advising on trade mark or other registrations before listing the business for sale, and preparing a Deed of Assignment of Intellectual Property to transfer these rights at settlement. Clear ownership increases buyer confidence and strengthens your negotiating position.
8. Restraint of Trade: Planning Your Future Activities
Most sale agreements include a restraint of trade clause designed to prevent you from competing with the purchaser for a defined period and within a specific area. Your lawyer will ensure that any restraint is reasonable, enforceable, and consistent with your future business or employment plans. A well‑balanced restraint protects both parties and helps maintain the value of the business after the sale.
9. What Happens at Settlement?
On settlement day, your lawyer coordinates the transfer of contracts, leases, intellectual property, and any other assets. They also ensure discharge of securities, and manage the transfer of funds. Larger transactions may involve a post‑settlement “wash‑up,” with funds temporarily held in trust until all calculations are complete. After settlement, you may also need to update your company name if the purchaser continues to trade under the existing name.
10. How Much Does It Cost to Sell a Business?
Legal fees vary depending on the nature and complexity of the transaction. Before providing an estimate, we take the time to understand your business, your objectives, and the specific circumstances of the proposed sale. This allows us to give clear, tailored advice and a fee estimate that reflects the work required, with no unexpected surprises.
