Business Purchases and Sales
If you are thinking of purchasing, selling or merging a business, you will need the assistance of a lawyer who not only understands the legal issues but has a detailed understanding of the commercial environment in which you operate.
Purchasing or selling a business is never a decision that can be taken lightly.
If you are buying a business, you need to understand exactly what you are purchasing and ensure that you are getting value for money. After all, the process raises not only financial questions but legal ones.
If you are selling your business, the business represents months or years of hard work, so it is important that the sale is properly researched, negotiated and executed.
At Monardo Solicitors, we have extensive experience advising clients on the purchase, sale and merger of businesses. Whether your business is small or large, we always take the time to understand your broader business objectives and use that knowledge to help you prepare for, negotiate, manage and complete the transaction.
Key issues when buying or selling a business
When you are buying or selling a business, a range of factors come into play. You need a lawyer who understands the:
- industry in which the business operates
- statutory and other regulatory requirements
- employment arrangements
- industrial relations environment
- property issues
- intellectual property issues.
How can we assist you?
If you are thinking of buying, selling or merging a business, we suggest you talk to us as soon as possible.
We can assist with:
- the preparation of a heads of agreement (which will enable you to lock in key binding terms that allow for the agreement subsequently to be documented)
- the selection of an appropriate business structure to purchase the business
- running the due diligence, whether you are the vendor (to ensure everything is organised correctly and you maximise your sale price) or purchaser (to ensure you know exactly what you are buying and you pay a fair price for it)
- your negotiations
- navigation through any regulatory and banking requirements, so that your transaction does not suffer unnecessary delays.
Due diligence is a particularly important aspect of buying or selling a business.
If you are a vendor, it is important to take the time to review and coordinate your business affairs, so you can be sure the business is compliant, organised and the paperwork is complete. When you open up your business for investigation by potential purchasers, they will be looking for holes, and if they find any, it will be reflected in the purchase price. In a worst-case scenario, a lack of preparation could mean that you could lose the deal altogether.
If you are a purchaser, you need to make sure you give yourself adequate time to conduct your due diligence, so that you (and your financiers) are satisfied that the business you are buying is what the vendors represent it to be, is compliant and fairly priced.
The due diligence process involves reviewing:
- the corporate structure and governance documents
- regulatory licences
- permits and approvals
- material contracts
- employment records
- asset condition reports
- finance agreements
- leases and real property documents
- active litigation
- insurance documents.
The aim of any due diligence is to ensure that the process is undertaken as thoroughly and efficiently as possible. Most importantly, it should identify any problems, so they can be dealt with quickly. Consequently, it helps if you have an experienced legal team running the process for you.
If you are buying a business that leases existing premises, it is important that an experienced lawyer review the lease to outline its terms and ascertain the process for transferring it. It may be that the lease contains unfavourable terms that you wish to vary, such as the:
- rent review process
- termination rights
- works clauses
- lease term
We can help you negotiate with the property owner to vary the lease to suit your requirements.
It is also important to ensure you have (or obtain) all necessary regulatory licences, authorisations and permits required to conduct business at the premises.
We can help you check the validity and adequacy of those licences, authorisations and permits.
There are a number of other issues you may need our help with if you are buying a business, including:
- Does the business have key contracts with customers or suppliers? How do you make these enforceable?
- Does the transaction include stock? If so, the contract will need to outline a stocktake process.
- Is there any plant and equipment included in the sale? If so, it may be necessary to obtain valuations and warranties regarding its condition.
- Does the business have existing employees? Are all, some or none of those employees to be retained?
- What are the tax implications of the transaction, including GST, stamp duty, income tax and capital gains tax?
- In order to protect the goodwill of the business, do you need to restrain the vendor from setting up a competing business for a period of time?
In short, you need the support of a legal team that will investigate the transaction from a number of angles and manage the process efficiently.
At Monardo Solicitors, we can help you ensure that the purchase or sale of your business runs smoothly.
Are you thinking of purchasing or selling a business? Would you like to talk to an experienced commercial lawyer? Call 02 8006 5244.