Sale and Purchase of a Business

Sale and Purchase of a Business – Leigh Adams Business and Commercial Lawyers handles business sales, purchases and mergers.

We have worked on many types of business sales, purchases and mergers. We can assist you to prepare for, negotiate, manage and complete the transaction. As Leigh is an accredited specialist in business law, we have the skill set and breadth of experience to advise on all aspects of your business transaction.

We can help you by advising you of the issues involved. More specifically, we can assist with the preparation of Heads Of Agreement to lock in binding key terms which allows for the agreement to be documented subsequently. We can advise you on the appropriate business structure for your purchase and appropriate asset protection measures available to you.

Due diligence is always anissue. As a vendor, you should take time to be sure that the business is properly organised. Purchasers look for holes – for missing contracts and incomplete documents – and if they find any, you can be sure that the price offered will fall or be withdrawn altogether. A purchaser on the other hand should not feel compelled to buy without undertaking proper due diligence. If the business has key contracts with customers or suppliers, then we can review them and ensure that they are enforceable and transferrable.

The extent of due diligence varies for each transaction but typically includes a close look at the corporate structure of the business. Governing documents like shareholder agreements and trust deeds are most usually reviewed.

Employment agreements are relevant. Do they comply with the Fair Work requirements? A properly worded restraint is very enforceable and we can assist you in ensuring that goodwill which forms part of the purchase is adequately protected with appropriate restraint of trade and confidentiality clauses.

If stock is part of the arrangement, then the mechanism for undertaking a stock-take will need to be outlined in the contract. For on-line businesses, additional issues arise, like whether the website terms and conditions are up-to-date.

If the business includes plant and equipment, then consideration will need to be given to undertaking a valuation of the plant and equipment and negotiating suitable warranties from the vendor as to their condition.

And with the business’ financial statements, we can work with your accountant to assist in giving clarity to their real meaning. For example, we can determine what security interests exist and what security interests should exist. This is very important, now that new legislation mandates that possession is more important than ownership in relation to such matters.

Real property leases are highly relevant. If you are buying a business which is subject to a commercial lease, then the lease needs to be reviewed to determine what the lease terms are and what is required to transfer it. You may wish to vary any unfavourable terms. If the lease cannot be varied, then you may wish to negotiate a new one. We can help you with negotiating variations and with negotiating a new lease where necessary.

If you have any questions or just want to discuss a possible sale or purchase, then give Leigh a call on 02 9570 7844