Sale and Purchase of Businesses
Barrett Walker regularly advise clients in the purchase and sale of businesses.
We guide our clients through each step of these transactions from due diligence work, preparation, and execution of Contracts of Sale, transfer or assignment of leases, finance, transfer of licenses, transfer of shares and business names to the final settlement and handover stages.
Business Sale and Purchase
Buying and selling a business can be challenging if you do not have the appropriate resources. It is critical to consider every step from the start to the final settlement.
When you are selling a business, what are you selling?
The usual form of the sale of a business is that the vendor sells the goodwill and assets and assigns to the purchaser the benefit of the major contracts such as leases and supply agreements. In this arrangement, the vendor sells the business, normally as a going concern, and the purchaser takes over and carries on trading under its name/entity.
Some business owners prefer to sell a business by transferring the ownership of the entity that owns and controls the business operations. For instance, if a business is owned by a company, the shareholders of the company could sell all the shares and consent to the replacement of the company officers with the ones nominated by the purchaser. By doing so the purchaser will take on all the assets and liabilities of the company.
What's included in the sale?
When it comes to selling a business the agreement between the parties needs to accurately reflect the parties' intentions. Well-drafted agreements and detailed checklists set out to achieve this intention.
Both the purchaser and the buyer will need to think about the sale price apportioned across the various categories of business assets such as plant/equipment, intellectual property, inventory as well as goodwill as the tax outcome can be very different.
Business premises
An important consideration when it comes to the takeover of a business is the occupancy rights to the premises from which it operates. If the vendor is renting the purchaser will usually be keen to take an assignment of the lease or in some circumstances seek to negotiate new terms with the landlord.
Tax consequences
Generally, there will be tax consequences on the disposal of a business such as CGT and GST. It is particularly important to obtain tax advice before buying or selling a business.
At Barrett Walker, we offer legal and tax advice tailored to your needs. We will prepare all the necessary contracts and agreements for the parties and outline the general logistic matters for relatively inexperienced buyers and sellers.
Talk to us about what we can do for you.