Sale of your business can be an exciting and stressful time. It is important to get diligent legal and financial advice to ensure you are indemnified from loss, and achieve the maximum benefit from the transaction.
It is important to consider:
- What the business’ key contracts are, and whether these are in writing;
- Whether leasing arrangements exist over any of the business’ assets;
- Whether your employment contracts are in writing, and whether they contain provisions that protect your intellectual property;
- Whether there is any legal action;
- How current your licences or any permits are;
- 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;
- Whether your key contracts are assignable, and in turn what would be required for that assignment;
- whether your premises lease is assignable, and the liability for any make good commitments;
- whether registrations have been made by creditors on the PPSR and review which registrations are either incorrect or no longer current (consider issuing amendment demands for the effective discharge of those that should either not be, or no longer be on the PPSR);
- whether business assets will be provided with clear title – and if you do intend to provide them with a clear title, consider what costs you will face in doing so;
- how will you deal with any deposits that you have already received for part-completed work, or work-in-progress?;
- if there will be a transfer of employees. If so, provide the purchaser with a table of their names, positions and accrued employee ;entitlements. If there are any ‘key’ employees whose employment by the purchaser may be a ‘condition precedent’ to the transaction being completed, be aware of this; and
- tax consequences of sale (for example, the requirement that the business be a ‘going concern’ to be exempt from GST.
If you and someone you know is considering selling their business, contact Springdale Legal today.