Selling A Business
Business & Commercial
Expert legal advice when selling a business
Selling a business can be a difficult decision, whether you are realising the capital gain made on the business, or minimising your losses associated with owning the business. Business sales are unlike residential property sales in the complexities you will face. The team at Burgess Thomson are experienced in assisting clients with transactions involving businesses and can guide you through the process.
The support of a lawyer in the sale of your business can be invaluable for many reasons. We can assist you through all stages of the transaction, with particular benefits including identifying pitfalls in the agreement, ensuring all necessary laws are complied with, and ensuring deadlines are met.
Arrange a consultation with our Small Business Lawyers for sensible small business-focused legal advice.
What will be included in a Contract for the sale of business?
A Contract for the sale of business is an agreement between you to sell, and the purchaser to buy, your business for a set amount of money, subject to certain terms. This Contract contains two types of conditions, standard and special. Standard conditions are those included in every Contract for the sale of business. Following standard conditions are special conditions, which are those conditions added to the Contract by your lawyer to reflect your situation and protect your interests. Because everyone is in a different situation when selling their business these conditions have to reflect your specific circumstances. Having any and all agreements between the parties documented in the Contract can help to limit the possibility that a dispute will arise in the future.
What are special conditions?
Special conditions are the conditions included in a Contract by lawyers. Special conditions may be included to alter standard conditions or introduce new conditions tailored to the specific needs of the parties to the transaction. These conditions are commonly negotiated between the legal representatives and parties involves to reach an agreement suitable to both sides. Special conditions can be fairly general, such as allowing either party to rescind the Contract if one party dies or becomes mentally ill. They may also be specific to the business involved. For instance, a steelworks business may have certain conditions regarding the equipment being included in the sale. Conversely, a personal training business may have conditions regarding the businesses social media accounts being included in the sale. As no two business sales are exactly the same, negotiating special conditions provides a degree of flexibility to ensure your interests are protected and that all agreements are documented.
What about my employees?
It is important to consider what will happen to your employees when the business is sold, as they have been a valuable part of the business. Generally, most if not all of the employees will continue working for the business under the new owners, however this decision is at the discretion of the purchaser. One notable consideration for you will be any accrued entitlements held by employees that will have to be honoured. Usually, the seller of a business is responsible for paying the purchaser the proportion of these entitlements accrued during their ownership. This is one cost that must be factored into any decision to sell a business.