Assets or shares?
- An asset sale transfers the business assets; a share sale transfers ownership of the company, including its history and liabilities.
- The choice affects risk, due diligence and tax. Involve your accountant early.
What is included
- Goodwill, plant and equipment, stock, intellectual property, business names, domain names, phone numbers, customer lists and key contracts.
- How stock is counted and valued at settlement, and any price adjustments.
Conditions
- Common conditions include finance, due diligence, assignment of the premises lease and transfer of licences or franchise approval.
- Check the dates for satisfying each condition and what happens if one is not met.
Employees
- Which employees will transfer, and how accrued leave and other entitlements are treated in the price.
- Fair Work rules on transfer of business can affect what entitlements carry over.
Protecting the goodwill
- A restraint stops the seller competing for a period and within an area. It must be reasonable to be enforceable.
- A handover or training period helps the buyer keep customers and suppliers.
Warranties, GST and settlement
- Warranties about the accuracy of financial records and the absence of undisclosed liabilities, and what remedies apply if they are wrong.
- GST treatment — for example whether the sale may be a GST-free supply of a going concern. Confirm with your accountant.
- Deposit arrangements and the settlement process.
Need help with this?
Tell us whether you are buying or selling, the type of business and any key dates. We’ll discuss the scope and engagement terms before starting.
General information only, not legal advice. Laws differ between states and territories and depend on your circumstances.