Purchasing a business
The prospect of owning your own business and achieving financial freedom and independence by being your own boss is an incredibly attractive proposition. There are however many complex legal considerations that need to be considered as part of the purchase of a business. Good legal advice can assist in your planning and decision making processes.
When purchasing a business you should have regard to:
- The business structure you wish to utilise
- How best to protect your existing assets
- How to determine the value of the business that is being offered for sale and
- The fine detail of the terms and conditions contained in the contract of sale
FAQ's
Possible business structures include purchasing:
- As a sole Proprietor
- As a partnership
- As a Limited Company
- Under a trust (Discretionary and Unit Trusts)
- Under a Superannuation Fund or
- Under a combination of two or more of the above.the contract of sale
Seeking legal advice regarding the above business structures can provide you piece of mind in achieving:
- flexibility so that the structure can accommodate changing circumstances
- adequate asset protection to the principals of the business
- minimised costs, particularly tax and
- efficiency in the distribution of profits
It is important to be aware that each of these business structures carries with them both advantages and disadvantages not only in their operation but in terms of Goods and Services Tax (GST), Capital Gains Tax and Stamp Duty implications.
Before putting in an offer to purchase a business, it is important to conduct research and gather information regarding the prospective purchase. The business value will be determined by factors including:
- inventory of equipment being sold and any associated depreciation schedules
- any intellectual property owned by the business
- any licences benefiting or affecting the business
- phone numbers attached to the business
- web, email addresses and social media accounts attached to the business
- any customer lists of the business
- stock-in-trade
- any work in progress
- Good will
- Business liabilities including employee entitlements, rent and outgoings
In many instances, it may be preferable to obtain advice and assistance from an experienced accountant to determine the value of a business.
BDN Lawyers will help guide you through the process of buying a business from start to finish. We will assist you to:
- Understand the advantages and disadvantages of buying a business
- Identify the right industry and business type
- Conduct research into your identified business purchase
- Decide on the right business structure (i.e. Limited Company, Partnership, etc.)
- Secure finance (if any) for the business
- Making an offer on the business
- Negotiate a Sale and Purchase of Business contract and provide adequate due diligence in the areas of disclosures and title searches
- Execute the Sale and Purchase of Business as well as any relevant Sale and Purchase of Land or Assignment of Lease associated with the business and
- Settle the Sale and Purchase of Business, Sale and Purchase of Land or Assignment of Lease and process payment of any stamp duty
