Business Sale Lawyers Perth and Western Australia

At Summers Legal we have a wealth of experience in providing practical legal services for business sales and purchases in Perth and across Western Australia.

Acquiring an existing business or selling a business can be a complex and time-intensive process. It is imperative to have a clear understanding of the transaction and the legal aspects involved.

We collaborate with our clients and, if necessary, business brokers to manage all legal aspects of a business sale or business purchase, from business sale contract negotiation to business settlement.

Whether you are looking to acquire a new business or you are an established business owner seeking to sell, our business lawyers will work closely with you to ensure that your interests are protected, and your transaction is executed smoothly and efficiently.

Business Sale & Purchase Services

Our commercial lawyers can provide assistance with a range of services throughout the business purchase and sale process including:

• Due Diligence Assistance: Assisting clients to evaluate a business by reviewing existing operations, financial information, key contracts, any existing personal guarantees, compliance with regulations, and other critical aspects.
• Contract Drafting and Review: This involves drafting, reviewing, and negotiating the business sales contract, including the integration of vendor warranties. These warranties are vital assurances from the seller about various aspects of the business. We ensure these are clear and protect the client’s interests and offer advice in the event of breaches.
• Compliance and Regulatory Advice: Providing advice on compliance with laws and regulations related to business buying or selling in Western Australia.
• Structuring Transactions: Assisting in determining the most appropriate structure for the purchase transaction (e.g. asset sale, share sale) and advising on legal and tax implications.
• Negotiation Support: Representing clients in initial negotiations with the other party (e.g. the seller/ buyer, or buyer/seller’s agent) to achieve the best possible terms in the sale or purchase agreement.
• Licensing and Permits: Assisting in the transfer or acquisition of necessary business licenses and permits.
• Employment Law Consultation: Advising on employment contracts and obligations in relation to staff during the sale or acquisition of a business.
• Intellectual Property Transfer: Assisting with the transfer or acquisition of intellectual property rights associated with the business.
• Financing and Security Advice: Advising on financing arrangements and securities required for the purchase of a business.
• Lease Transfers or Sales: Assisting with the transfer and negotiation of commercial leases.
• Risk Management: Identifying potential risks in the transaction and advising on strategies to mitigate them.
• Settlement Services: Managing the final settlement process, including ensuring funds and assets are correctly exchanged and that all legal requirements are satisfied as per the sale agreement.
• Post-Settlement Services: Providing assistance with any legal issues that arise after the completion of the transaction.
• Reviewing Business Broker Selling Agreements: Assessing the agreements made with business brokers to ensure that the terms are fair and in the client’s best interest. This step is essential for understanding the obligations and fees involved in using a broker to facilitate the sale.
• Non-disclosure and Confidentiality Agreements: Drafting or reviewing non-disclosure and confidentiality agreements to protect sensitive business information during the negotiation and due diligence phase of selling or buying a business.
• Advising on Appropriate Business Structuring: We can provide advice on the best structure for the business, such as sole proprietorship, partnership, company, or trust. This step is important for both tax and liability considerations.
• Restraints of Trade Agreements/Advice on Restraint of Trade: This involves drafting or reviewing agreements that limit the seller’s ability to compete with the business after the sale. Legal advice from a business sale lawyer can also help in understanding how restraint of trade clauses can affect both the seller and buyer when selling or buying a business.
• Discharge and Registration of Security Interests and Guarantees: This service includes handling the release of any security interests over the business assets and ensuring that all obligations regarding guarantees are addressed. This is essential for protecting the buyer’s security interests and ensuring the seller is free from future liabilities.
• Vendor Finance Agreement: When a seller offers finance to the buyer for the purchase of the business, it is important to draft and review vendor finance agreements. This ensures that the terms of the vendor finance agreement are clear and protect the interests of both parties.
• Franchise Agreement Legal Advice: For businesses that are part of a franchise, our business sale lawyers provide services in reviewing franchise agreements and disclosure documents, and offer advice on the obligations and requirements. This is crucial for comprehending the responsibilities and limitations associated with owning a franchised business.

Speak To Our Perth Business Sale Lawyers

At Summers Legal we offer practical legal help for those buying or selling a business. With knowledgeable commercial lawyers, we focus on making the business transaction process efficient and straightforward. Whether it is a proposed sale or a purchase, we are here to assist with all matters relating to your business sale or purchase. For reliable support in your business transaction, contact us at (08) 9420 8222.

Steps for Buying a Business in Western Australia

Buying a business in Western Australia is a complex process that requires careful planning and consideration. Here’s a guide that outlines the steps you should follow:

Step 1: Deciding if the Business is Right for You

Before making any commitment, critically assess whether the business aligns with your goals, skills, and interests. Consider the industry, the location, and the scale of the business.

Step 2: Evaluate the Business

Conduct thorough due diligence. This involves analysing financial statements, contracts, employee records, and other relevant documents. Consult with professionals such as business purchase lawyers, accountants and business brokers for a comprehensive analysis of the business’ health and viability.

Step 3: Sign Contract

If you are satisfied with the evaluation and decide to proceed, negotiate the terms and conditions of the sale. Once both parties agree, sign a Business Sale Agreement. This contract should detail the terms of the sale, including assets included, liabilities assumed, and the total purchase price. It is highly recommended to have a business sales lawyer review any business contracts before signing.

Step 4: Pre-Settlement

During the pre-settlement period, it’s crucial to finalise financing arrangements and carry on with due diligence. This stage may also encompass securing necessary licenses, permits, or consents, and confirming compliance with pertinent regulations. Furthermore, this is the time to notify the relevant government authorities about the change in business ownership, which includes transferring the business name. To ensure a smooth transition, it’s important to coordinate any essential training or handover procedures.

Step 5: Settlement Day

On the settlement day, both parties fulfil the conditions outlined in the Business Sale Agreement. As the buyer, you will pay the agreed purchase price, and the seller will hand over the business assets, keys, and any other relevant items that the business relies on to function. Make sure all the documents are in order and have been properly executed by a business settlement agent.

Step 6: After Settlement

After the settlement is complete, the business is officially yours. Take control of the operations and assets. Notify suppliers, customers, and other stakeholders of the change in ownership and if there is a change in the business name. Review and possibly renegotiate contracts with vendors or employees as needed. Focus on establishing good relationships with employees, clients, and suppliers.

Keep in mind that buying a business is a significant investment and can be a life-changing decision. Engaging the services of experienced professionals, such as lawyers, accountants, a business settlement agent, and business brokers, can be invaluable throughout the whole business buying process.

Considerations When Buying or Selling a Business

When buying or selling a business in Western Australia, there are numerous considerations to keep in mind. These considerations can have a significant impact on the success and smoothness of the transaction:

1. Due Diligence: Due Diligence is essential for making an informed decision before purchasing a business. It entails an in-depth analysis of the business’s records, business contracts, financial information, and existing operations to comprehend its financial performance and health. Additionally, it covers the scrutiny of liabilities, adherence to regulations, and other crucial aspects.
   If you are the seller, ensure you have a non-disclosure agreement in place before handing over financial records to a buyer.
2. Financing: When selling a business, it’s important to assess the prospective buyer’s financial capability to meet the purchase price. Conversely, if you are the prospective buyer, securing finance approval for both the acquisition to cover the purchase price and the ongoing operations is essential.
3. Structure of the Sale: The sale can be structured as an asset sale or a share sale, each having different legal and tax implications. It is crucial to understand which structure is most suitable for your situation.
4. Negotiations and Agreements: Negotiating terms is a delicate process. Both parties should be clear on their objectives and limits. Seeking out law firms with experience in business transactions to find one that can help draft and review agreements is advisable.
5. Employee Contracts and Obligations: Take into account the contracts and obligations associated with existing employees as part of the business operation. It is essential to understand how these will be transferred or terminated, and what liabilities regarding employee entitlements may arise for the business employees.
6. Lease Agreements: If the business operates from a leased property, examine the lease agreement to ensure it can be transferred or that new lease terms are favourable.
7. Reputation and Goodwill: Evaluate the reputation and customer relationships of the business. For sellers, it is also essential to consider how the sale might affect the business’ name and goodwill.
8. Transition Period: Consider how the transition will be managed. Will there be training, handover, or ongoing support from the seller?
9. Tax Implications: Understand the tax implications of the sale or purchase, both in terms of the transaction itself and ongoing tax obligations.
10. Market Conditions: Keep an eye on broader market trends and economic conditions that might affect the value or viability of the business.
11. Exit Strategy: If you are a buyer, think long-term and consider what your exit strategy might be if you decide to sell the business in the future.

The Four Most Common Business Structures

Sole Trader

As a sole trader, an individual is solely responsible for managing the business. This structure is generally the simplest and involves less red tape compared to more complex structures. However, it’s critical to consider that as a sole trader, you are personally liable for every aspect of the business, including debts.

Partnership

In a partnership, two or more individuals or entities collaborate to run a business. This structure requires a partnership agreement that clearly outlines each partner’s roles, responsibilities, and how profits and losses are to be shared.

Limited Liability Company (Company)

Opting for a limited liability company structure, often referred to as a company, means that the business is a separate legal entity. This structure can offer protection to the owners as their personal assets are typically not at risk for business debts.

Joint Ventures

Similar to a partnership, a joint venture is usually formed for a specific business project. It’s a structure where the parties agree to pool their resources for the purpose of accomplishing a specific task or business goal. A joint venture can be complex, so it is essential to have clear agreements in place.

Frequently Asked Questions