If you are getting to the stage where you are looking to sell your business then it is important that you give yourself plenty of time to properly prepare for the sale and obtain professional advice to negotiate a favourable contract.
To improve saleability, promote a seamless transaction and minimise protracted due diligence performed by prospective buyers, it is prudent to ensure you tie up all lose ends and have a comprehensive information package to present before selling the business. Suggested steps may include:
- having up to date and certified financials and financial or taxation reports for the business;
- having all contractual arrangements clearly documented including with suppliers and third parties;
- itemising all plant and equipment (including those hired or leased) that are intended to form part of the sale;
- ensuring all registrations are valid including in respect of the business name, trademarks, domain names;
- the business lease or licence is documented, no default has occurred and all options property exercised; and
- all licences and approvals remain current and details presented clearly.
Before even entertaining prospective buyers, a Seller should also consider:-
- the taxation consequences of the sale;
- whether a Buyer may require the Seller’s own ‘pty ltd’ company name to be changed or amended as part of the transaction and how this may affect the Seller post-completion;
- adjustments for liabilities such as employee entitlements (noting that not all entitlements are automatically adjusted);
- warranties that the Seller is required to give (or may be prepared to give and any amendment or minimisation required)_as part of the contract of sale; and
- compliance with statutory disclosure obligations – such as those that apply to retail businesses under the Retail Shop Leases Act 1994 (Qld).
Without proper advice prior to contract signing, a seller may end up receiving far less for its business than what it believed it would receive and may remain liable for ongoing business obligations after settlement.
As experts with the legal aspects of selling a business on the Gold Coast or Queensland wide, our business and commercial lawyers are well equipped to assist you with preparing for sale, drafting and negotiating the sale contract and advising you on all steps in the transaction through to completion. It may also be necessary to consider other matters associated with the sale including:
- negotiating the release of any personal guarantees with the landlord, creditors or suppliers, franchisees and/or third parties;
- identify and deal with any residual liabilities following the sale;
- restraint of trade covenants;
- any vendor finance terms and security;
- assignment of business assets; rights, licenses and approvals;
- recovery of security bonds; and
- post completion obligations.