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Your Guide For Getting A Business Ready For Sale.

Your guide for getting a Business ready for sale.

Selling a business is complex and requires careful planning. Here is our guide on the keys steps you need to consider in the sale process to help you maximise the return for your business.

One of the best ways to get the most value for your business is to conduct your own due diligence investigations prior to taking your business to market.

Conducting your own investigations:

  • will highlight any problems in the business and allow you to fix the problems before they are identified by a prospective buyer;
  • ensure that you will not be caught by surprise with the results of the buyer’s due diligence investigations; and
  • allows you to ensure the business is ready for sale.

Your due diligence investigations should include the following:

1. Review

Reviewing what you currently have in place, and in turn, what you actually have that you can sell is critical.

This will almost always form part of a buyer’s due diligence and it is important to consider:

  • what are the business’ key contracts and whether they are in writing;
  • whether leasing arrangements over any of the business’ assets;
  • are your employment contracts in writing and do they contain provisions that protect the business’ intellectual property;
  • are there any instances of current or threatened legal action;
  • reviewing the currency or validity of licences or permits necessary to conduct the business;
  • whether all employee statutory entitlements are reflected in your books, paid and up to date;
  • what intellectual property (e.g. trade marks) are owned by the business, and whether these are registered or unregistered; and
  • are your key contracts are assignable and if so, what would be required for that assignment.

2. Personal Property Security Register

Creditors can arrange for registrations of security interests on the Personal Property Security Register (PPSR) without necessarily advising you beforehand, or having any requirement to serve you with a financing statement (e.g. where you have waived compliance with this requirement).
That can result in registrations made against your business which you may not be aware of, are no longer current or are simply incorrect.

It is, therefore, important to conduct a PPSR search on the owner of your business (i.e. the corporate owner or yourself) and review those search results to determine which registration, if any, are incorrect or no longer current.

Those that are incorrect should be amended and those that are no longer current should be removed.

Where your financier has a security interest over all your business’ assets, you should consider what would be required in order to remove that security interest.

3. The Premises

If the premises from which you operate the business is subject to a lease, the consent of the landlord to the assignment of the lease to the buyer will be required.

Obtaining the landlord’s consent will take time and should be factored into the sale timeframes.

It should also be noted that the assignment of the lease (or a new lease) is a condition of selling the business as a “going concern” for GST purposes.
If you are vacating the premises without assigning the lease to the buyer, you may have some ‘make good’ obligations that will need to be undertaken, at your cost, prior to vacating the premises.

4. Assets

Identify which assets are used in the operation of the business and will be transferred to the buyer as part of the sale of the business and identify those assets, if any, which are not part of the business and will be retained by you.

Consider the condition and value of the assets being transferred and whether those assets will be transferred with clear title (which the buyer will expect). If you do intend to provide the buyer with a clear title, consider what costs you will incur in doing so.

Give thought to how you will treat any part-completed work (i.e. work in progress). Will you finish this work or will the buyer take this work over? How will you deal with any deposits that you have already received for part-completed work?


5. Employees

Will the sale of the business involve a transfer of employees? If so, you will need to provide the buyer with information on the transferring employee’s names, positions, commencement date, current salary and accrued entitlements.

The employees entitlements accrued up to the completion of the sale will be your responsibility. Generally, the terms of the contract will require an adjustment in the buyer’s favour for an amount equal to the accrued but unpaid employee entitlements.

Ensure that any non-salary benefits given to employees are documented, as the buyer will be entitled to know what each transferring employee expects to receive as part of their remuneration package.

Identify any key employees whose employment by the buyer may be a condition precedent to the sale being completed.

6. Assistance from Key Advisors

Take advice from your solicitor and accountant as to whether or not the sale of your business can be completed as a “going concern” for GST purposes.
Alternatively, the sale may best be arranged as a sale of shares in the company that owns the business.

You should consider the tax implications the type of sale you are considering may have on both yourself and the buyer.

7. Dealing with your confidential information

Finally, before entering into any negotiations, ensure any prospective buyer who wishes to examine confidential material associated with the business signs a non-disclosure and confidentiality agreement.

This ensures they are aware that access to your confidential information is strictly limited to allowing the prospective buyer to consider whether or not to buy the business, and not for any other purpose.

If you are thinking of selling your business, get in touch with us to discuss how you can prepare for your sale by telephoning our office on (07) 3220 2929 or emailing us at

About  Jim Burke

Jim Burke is a Consultant in the Business and Property teams at Plastiras Lawyers. Jim helps SMEs with the sale and purchase of their businesses. Jim also assists clients with commercial property sales, acquisitions and leasing.

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