Buying a business is a complex legal process and there are many considerations. Berryman Partners can support you in every step of the way.
Every business has different commercial goals and expectations. We will help you navigate the legal options most appropriate for you when buying a business, while taking into consideration your finance and investment goals. We can also liaise with your financial advisor to provide a comprehensive service.
You may assume that when you buy a business you will automatically gain ownership of the business’s website or contacts. This is not the case. Berryman Partners will be able to advise what assets you are acquiring when you purchase a business, including the business name, equipment, stock in trade, client databases and contact numbers. We will also ensure that your concerns are addressed at every stage of the process.
Factors to consider before buying a business in Australia:
- The history of the business – what has and hasn’t worked for the business in the past?
- The business structure – what is the current business structure and does it suit the way you want to run your business? Will you have to buy out business partners?
- Business expectations – what standards do you have to live up to in managing staff and suppliers?
Careful consideration should be given to how you wish to own and operate the business. There are different types of business structures such as sole trader, partnership, franchise, company or trust. We will help you choose the model that is the most appropriate for you based on factors such as tax planning, asset protection, ongoing cost and finance availability. We can liaise with your accountant or financial planner to provide you with a comprehensive service. You can read more on our Business Structures page.
The seller (vendor) will have their solicitor prepare the Contract for Sale of Business, which includes the terms of sale and details of the business equipment and assets. We will negotiate with the vendor to ensure that your interests are protected. We will also review the contract with you, the purchaser, to ensure you understand and feel comfortable with the terms of the sale.
When you purchase a business, you also have options to acquire the business premises:
- Leasing the premises – this may involve creation of a new lease or assignment (transfer) of an existing one
- License to occupy – a licensee has the right to use and occupy a property but no right of exclusion, and are bound to the conditions specified in the licence
- Purchasing the premises – if the current landlord is willing to sell, you may be able to purchase the commercial premises
Here are some questions that any prospective purchaser should ask themself:
- Do you need to consider restricting the vendor in their trading activities if they are going to be in direct competition with the business you are intending on purchasing?
- What do you intend to do with the current employees of the business?
- Will their existing employment agreements affect your purchase?
- Will you need a loan to buy the business?
- What are the existing assets and liabilities of the business? Have any creditors commenced legal proceedings against the current owner?
- Are there regular suppliers for the business? Do you intend to maintain the commercial relationship?