We are able to assist you with
- Purchase and Sale of Businesses, e.g.
- Grocery shop
- Post Office
- and much more
- Commercial Leases / Retail Leases
- Commercial agreements such as Licenses, Franchises, Partnership and Joint Venture
- Loan Agreements such as Mortgages and Guarantees
Our goal is to provide you with competent and professional advice that is timely and cost effective.
We aim to be friendly, courteous and approachable in our service to you. We will discuss with you what you wish to gain out of your business transaction, legal issues that can arise and together find a prompt, reasonable and favourable outcome.
Purchase of a Business
The purchase of a business is one of calculated business risk. It is both a financial consideration as well as a legal consideration. The Purchaser takes the risk that the Purchaser has the skills and ability to run the business successfully, that the business has been well run previously, paid out all its debts and is financially viable at the time of purchase.
To Protect The Purchaser we
- Check that your Contract is in order and carry out negotiations, including GST issues, title particulars, business name registration, list of inventories included in the sale, amount of goodwill and stock in trade, restraint time, restraint distance, employee issues and special conditions requirements.
- Conduct pre-exchange as well as post-exchange searches: requesting requisitions on business title, checking whether rent and outgoings have been paid, as well as searches on causes writs and orders, bankruptcy and traders bills of sale. We ask you to also check with the Local Council as to permissible use of the business premises, whether there are outstanding health and business notices and also requirements for trade waste disposal.
- Determine as to whether there is an existing Lease on the property. We will discuss with you, the pros and cons and steps to take in preparing a new lease or assigning an existing lease, to which the landlord’s consent needs to be acquired. We will also advise you of the particular terms and conditions in the Lease agreement.
- In the case where there exists a mortgage over the leased premises, the mortgagee’s consent needs to be acquired in writing. We will ensure that the consent not only covers the initial term of the lease but also all further option terms under the lease.
- Where required, we can also advise you on mortgage and guarantee documents
- Organise stamp duty on the Contract as well as the Lease
- Prepare the documents for the Vendor’s signature for the transfer of business name; prepare a Deed for the Vendor’s restraint of trade and transfer of goodwill
- Organise Change of Business Name (where required)
- Registration of Lease (where required)
- Organise settlement with you, your lender and the Vendor’s solicitor
In addition to ensuring that pre-exchange negotiations and searches are favourable, we also check that the terms and conditions of the Contract after exchange have been met. Remember that if you default in your performance of your obligations under the contract, for example failing to meet time limits or non-payment of moneys owing, the Vendor may sue you for breach of contract or in severe circumstances of serious default, terminate the contract and keep the deposit money as forfeit and sue the Purchaser for damages.
You as the Purchaser should also be aware of caveat emptor “let the buyer beware”.
We also recommend for the Purchaser to obtain independent financial advice from a qualified accountant to
- Check the business books and financial records of the business to ensure that the business is viable and that the purchase price is fair value
- Check tax issues related to the business including GST issues, depreciation schedules, income tax implications associated with the purchase
- Determine the best business structure for the Purchaser to purchase the business e.g. In a partnership, joint venture, company or sole trader arrangement.
Sale Of a Business
In the Sale of a Business, the goal is to have a detailed and complete Contract to allow for smooth and quick settlement of the sale of business. The legal work involves:
- Preparing a detailed sale of business contract including special conditions specific to your type of business for sale.
- Determining GST issues: whether the business is a sale of a going concern or a taxable supply and the implications for either option.
- Checking that the stock take is organised in a timely manner.
- Ensuring that the Vendor signs all required documents prior to settlement including Transfer of Lease/Surrender of Lease, Transfer of Business name, Deed of Restraint of Trade and Transfer of Goodwill.
- Organising of the discharge of any Traders Bill of Sale (if required).
- Organising settlement with you, your lender (if required) and the Purchaser.
Please remember that you as the Vendor have warranties and obligations that you must adhere to under the Contract for Sale of Business. These obligations include duties such as executing all required documents to allow full transfer of title of items sold with the business, conducting the business in a normal manner and not act to adversely affect the goodwill and value of the business prior to settlement, discharge any existing encumbrances of the business; obtain Lessor’s consent to transfer of lease; and notify any employee of the sale and attend to employee termination pay and long service leave pay as required. Failing to perform these obligations may allow the Purchaser to rescind the Contract.
We also recommend for the Vendor to obtain independent financial advice on tax issues related to the sale of business including capital gains tax and GST issues.
The purchase or sale of business can be complex and very technical in details. As well there is the critical need for the business transaction to be handled in a timely manner so that the purchase or sale of business together with lease details and mortgage details are handled efficiently.
We are here to protect you and your business.
Please contact us now for an initial free-of-charge consultation on your purchase or sale of business.