Whilst the COVID world has made business very hard for some, it has also been a boom time for many.

I recall a very old and dear client once saying to me, “the time to start a business is when it is tough economically because if you survive the future will be guaranteed and so will success”.

Whilst owning and operating a business is not for everyone Australia is the home of micro, small and significant privately owned business. Being your own boss comes with a lot of responsibility and takes hard work, but the rewards both personally and professionally can be enormous.

It is key when you are looking at purchasing a business or a part of a business you have commercially astute and knowledgeable professionals to assist you through the purchase process and the journey ahead. A good lawyer and accountant will be invaluable.

First step when buying a business

Your first step is always the due diligence process where you will assess and review such matters as:

• Financials
• Compliance with relevant licensing and approvals to operate the business
• Customer/Client contracts and lists
• Supply and other third-party agreements
• The lease of the premises
• Employee agreements

Whilst there is a standard business sale contract in Queensland and in most states, you may need a specific contract drafted along with other agreements or deeds. For example, you may decide to purchase the shares in a company which owns the business rather than purchasing the company itself.

There is an exhaustive list of issues the contract must cover but some keys terms are:

• Basic details of the business itself including the correct description
• The assets that are being sold
• Any warranties and promises the seller has made to the purchaser
• How the contract can be terminated if there is a dispute
• Details of any finance that is required
• If there is a lease how it will be transferred
• What intellectual property the business owns and how it will be transferred

It is also important to know the transfer of a business and its assets will incur transfer duty and how this is to be calculated.

The key to buying a business is to do your homework and preparation is everything.

What should you do next?

At FC Lawyers we have acted for thousands of clients, including many from overseas, when purchasing and selling their businesses. We work closely with a client’s other professional advisors to ensure the correct outcome and to make it as least stressful process as possible. Call our expert team on 1800 640 509 or contact our team today.