Selling a business- how does a lawyer assist with the process?
If you have decided to sell your business, it is prudent that you seek professional legal and accountancy advice before placing the business on the market for sale.
Several matters may require or benefit from professional advice, including a determination as to what should be sold (the business entity or only its assets), taxation aspects (income tax, GST and capital gains tax), valuation of the business assets or shares, disclosure and concerns with respect to any confidentiality obligations.
It is usually necessary to undertake some legal work by solicitors before marketing a business for sale. That includes assembling the information required for the preparation of the contract, such as a detailed list of assets and plant, their depreciated values, copies of leases, licences, and other contractual documents that purchasers will need to inspect.
Your lawyer will also manage the conveyancing aspect of the sale starting from the preparation of the contract, negotiations, execution, and the post contract process up to completion.
It is imperative that an experienced commercial lawyer draft the sale contract and negotiate its terms with the purchaser or their solicitor to ensure that its terms are favourable to you and that you are protected from unnecessary disclosure or warranty obligations, misleading and deceptive conduct claims and other legal obligations that may arise during or after the transaction.
Some non-exhaustive matters to consider and obtain advice on are:
- The business valuation: you want to undoubtedly get the best price for your business and knowing what your business is worth will assist you to get this. We will undertake negotiations on your behalf with the purchaser to ensure this process occurs smoothly.
- The assets you are selling: does the sale include goodwill, licenses, patents, the business name etc. or are you only selling physical assets such as equipment, machinery and stock? As the seller, it is your responsibility to clearly identify what you are selling.
- Relevant disclosures: a seller can be held responsible if they do not disclose the relevant information to the purchaser. If you are unable to differentiate between what you need to disclose or not, you should contact our team to discuss.
- Warranties, guarantees and representations.
- Lease: does the business operate under a lease? Most leases require consent from the landlord to assign or transfer the lease, which we can negotiate on your behalf. Failure to transfer the lease may be detrimental to your business valuation.
- Employees: will your employees continue working for the business or will their employment be terminated when the business is transferred to a new owner?
- Tax implications of the sale.
- Vendor financing and security of loans.
- Restraint of trade.
- Goodwill obligations post-contract.
The expert Commercial Law team at Brydens Lawyers will carefully consider all the relevant aspects of your sale and guide you through the complexities of the transaction to ensure that the process is stress-free and smooth. For all your commercial law needs contact Brydens Lawyers without delay on 1800 848 848 or at brydens.com.au.
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