Selling or buying a new property is considered a difficult, time consuming and expensive step in anyone’s life. Sale and purchase of businesses is even more tiring if you don’t have the right legal team to assist you throughout the process. Platinum Lawyers help their clients before, during and even after the sale and purchase of their businesses in Sydney. From drafting the contract to advising you on documentation and conditions that should be included in the contract, we help you through every step of the process.
When selling a business:
Selling a business includes transferring your rights of the property, stock, name, and several other business components to the buyer. The components of a business are a plenty but you have the right to sell whatever aspects you want to, including:
- Registered business name
- Business premises (lease or ownership)
- Equipment, resources
- Fixed assets
- Current orders
- Supply agreements
- Any patents and trademarks
- Business licences
- Debtors
- Employees
For both the buyer and seller of the business, sale value can include any of the above and other component categories. The following components carry a significant weight:
- Fixed assets and equipment: Seller completes a full inventory of assets and equipment and their “book value” which is the original value of the asset. Mentioning any bills and mortgages is also essential, as it must be paid in settlement. This category also includes the property where the business is conducted. If the seller does not own the property, buyer has to then ensure to obtain the rights to use the premises under a renewed lease or transfer of lease. Buyer can also choose to purchase the property from its owner.
- Business goodwill: This category is more vague than the above as it includes all the intangible components of the business. This includes the brand name of the business, its reputation, market penetration, its relationships with clients, suppliers, its staff, and other similar aspects. It also includes some more physical items including the telephone numbers, customer lists, and also the transfer of processes, techniques and systems. This segment plays an important role in the success of the business and the buyer and seller both spend some time in determining the existing value and increasing the goodwill, respectively.
Sale and purchase of business – the important steps:
- Preliminary negotiations
- Setting of special conditions
- Sign on agreements
- Exchange of contracts: at this stage a deposit of 10% of the purchase price is to be paid by the buyer making both the parties legally bound to the contract.
- Buyer’s solicitor sends a “Requisitions on Title” to the seller’s legal team. This is a list of questions, which are to be responded by the vendor. If the answers are false or misleading, the Title provides protection to the buyer.
- Seller now performs several legal duties as stated in the contract for sale. These include, transferring the title, discharging mortgages, and acquiring lessor’s consent to a transfer of lease.
- The final step is the settlement day, which is to be mentioned on the contract for sale. On this day, settlement occurs with all the required documentations and cheques signed and transferred.
Before signing on a contract, it is important that both the seller and the buyer are clearly identifying all the conditions, rights, responsibilities, and assets that are being transferred. Talk to Platinum Lawyers at (02) 8084 2764 today and let our experts and solicitors focus on your legal matters. Enjoy our legal consultancy on the most important business deals to avoid any future damages to your business or wealth.
