Business Sale & Purchase
Selling a business is not as simple as appointing a broker and placing the add, “Business for Sale.” When you are selling, the golden rule is to put yourself in the shoes of a potential buyer and ask, “What would I want to know about this business?” Then, assemble that information, and present it in an accurate, organised, professional manner. The type of information will vary from business to business but the essential elements are usually the same:
- Revenue
- Expenses
- Key Contracts
- Key employees
- Competitive advantages
You can be sure that the buyer will do something like the S.W.O.T. analysis:
- Strengths
- Weaknesses
- Opportunities
- Threats
Anticipate this analysis and produce a booklet that answers the questions called, “Business for Sale - Information for potential buyers [Version: (date)] ”, but only give it to those who sign a Non-Disclosure Agreement first. Advantages:
- You won’t waste time with tyre kickers
- What you disclose is clear, reducing the risk of a buyer saying that you told them something different
- Your business will be presented as an efficient organised outfit
- The information is perceived as having extra value
- The information is protected from being misused
Online Sale & Purchase of Business Resources
Sale & Purchase of Business Checklist
More resouces >> www.onlinelegal.com.au
on June 14th, 2006 at 12:03 am
As a director do I have to disclose what I intend to do within the business to my bus. partner before there is a sale or is that up to me and the new owners
Response:
As a director you have duties to act in the best interests of the company.
As a “business partner” you have duties to your business partner including a duty to act with “good faith and fidelity”.
The application of these and other duties to your own situation requires careful consideration. I recommend that you take specific legal advice from your usual lawyer.
Regards
Onlinelegal
on September 7th, 2006 at 10:51 am
Hi there. I have signed a contract of sale for a small bussiness since the end of July, until today , I am waiting for the vendor to supply section 19 so I can prepare finance . Is there a possibility that he is buying time so he can pull out of the contract? Is there a time limit on the contract? Thankyou
Response:
It is impossible and dangerous to make a comment on this without a copy of the contract. I recommend that you engage a local solicitor with “business / commercial law” experience to provide some advice. There is no reason why you can’t just keep an initial appointment with a lawyer for this purpose and then consider taking whatever follow-up action is necessary yourself. However, at that same consultation it would be worth while seeking advice about why you should engage the lawyer to act for you in the whole transaction. Don’t be afraid to ask very detailed questions about what steps will need to be taken so that you can make an informed decision about whether you can take at least some of them yourself to save costs.
Regards
Onlinelegal
on September 8th, 2006 at 7:17 am
Hello again. Thankyou for that advice. Just a quick question, just found out today that the site for the business we signed sale contracts for, are closed due to liqiudation. Can we pull out of the contract or do we have to wait for the process to be finished?Does this process take a long time? Thankyou again
Response:
This is a matter for specific legal advice from your usual lawyer.
Regards
Onlinelegal
on February 19th, 2007 at 8:06 pm
I am looking to joint venture, or license, with/to an Australian company, that would be capable of manufacturing and marketing my patented water saving system. Also to help develop my ‘natural’ water desalination system, that will provide vast quantities of clean water with virtually no external energy input.
Are you able to broker such a deal, if so, could you please send me details.
Managing Director Aqua-technique Ltd Uk
Response:
Sorry no. This is not part of our business.
Regards
Onlinelegal
on March 6th, 2007 at 4:57 pm
Took over repayment on a truck from a company. No contracts were signed. Agreed price was 190K and the repayment take over was $25K less leaving a balance to be paid this was a verbal agreement. Since that time the vehicle has been refinanced. The company used to do all the accounts. When requested copy of account received one mth later. When I first and all the payments made into the bank statement and all the invoices there appeared to be approx. $57k not paid. Had I account start to take a look got to hard for him, now have past to another. In the mean time The Company is demanding payment of $45K. Tried speaking with them to no avail. Now saying they will be taking legal actions. Where do I stand ???
Response:
Given the complex nature of these facts, I suggest that you make an appointment to sit down with your local solicitor and go through it all with them. It will certainly be better for you to have taken this advice before legal action is commenced.
Regards
Onlinelegal
on March 26th, 2007 at 6:26 am
Hello. I have come up with an all natural herbal home remedy oil that helps treat genital warts. I have bottled this oil and I’m currently selling it to the public. Is this legal? Do I need FDA approval if my product is made with all natural ingredients? It is basically harmless, even if you drank it!
I’m asking because I’m thinking of spending $2500 in advertising in a magazine and don’t want to do myself in.
Would I be wrong to be relating myself to people who make home remedies for muscle aches, acne, joint pain etc, that sell them online or at markets, obviously without FDA or medical approval?
Thanks for your help.
Matt
Response:
These are questions that I suggest you put to the relevant Government Departments / Peak Bodies.
Regards
Onlinelegal
on May 30th, 2007 at 4:50 am
Hi. I bought a cafe business late last year and have found that many of the promises/claims made by the previous owners have been false. For example, the takings were grossly misquoted from what was advertised and catering contracts they claimed to have were simply not true. Also, on signing the contract the previous owners stopped maintaining any kind of goodwill. For example, opening hours were reduced significantly, and the menu was cut, with many items no longer available. The contract period went for an extended period due to issues with the lease transfer, and as a result, two months later when everything was finalised we were left with a business which had been completely run down - takings are minimal and regulars have gone elsewhere. (We have evidence of this). Is there any legal recourse here? We have been left with a business worth very little and a huge mortgage because of it.
Thanks for your help.
Response:
Yes, quite possibly. The types of issues your lawyer will need to consider for you are:
1. Did the contract exclude all prior representations and warranties?
2. Even if the contract did, there may be a potential claim for Misleading and Deceptive Conduct under the Trade Practices Act;
3. Did the contract contain a covenant / promise from the seller that they must reasonably maintain the business between contact and settlement? Even if not, there may be an implied term to this end.
4. To what event did you have knowledge of these changes and allowed them to take place without complaint?
I suggest that you take legal advice as soon as possible.
Find a lawyer
Regards
Onlinelegal
on June 25th, 2007 at 6:07 am
Hello,
My husband and I recently purchased the only charter fishing business in a small town. Before purchase the business was running two boats but the sale of the business included only one boat and the business.
The owners claimed that the second boat was preventing others from coming in to the port but it was draining the business.
The other boat was on the market and they promised us that they would not sell it to be set up as another charter business and it would be leaving the area. We shook hands on the deal and stupidly did not include this in the contract as we did not imagine that they would go back on their word.
We have been operating for less than six months and the boat has been sold locally and the previous owner’s deckhand is running it as a charter boat. It is also very likely that the previous owner has helped them lease a license for the boat and he has also turned a dummy mooring which he told us was in our leased parcel of water into a commercial mooring.
We allowed him to leave his second boat there until it was sold for no fee and now right under our nose he has legalised this mooring and given it to the opposition. Would we have a case against him for Misleading and Deceptive Conduct under the Trade Practices Act?
Response:
In my view it is certainly worth taking some specific legal advice. It seems that representations, about the second boat, were made that you relied upon, to your detriment, in agreeing to purchase the business and one boat.
Find a lawyer
Regards
Onlinelegal
on July 11th, 2007 at 4:58 am
I am selling my business and the potential buyer has asked for a section 19. What is this and where would i obtain one?
thanks
Clint
Response:
What Sate or Territory is the business in?
Regards
Onlinelegal
on September 20th, 2007 at 6:53 am
I have just bought a house and 3 wardrobes (not built ins) have been left behind. Can you tell me if they now belong to me or does the seller still own them?
Response:
This will depend on what the contract of Sale provides. Often they provide that chattels left at the premises are deemed to be abandoned (that is, they belong to you). Check your contract and contact your local lawyer if in doubt.
Find a lawyer
Regards
Onlinelegal
on November 2nd, 2007 at 11:53 pm
hello,
I purchased a second hand boat (2004 model) from a dealer with twelve months warranty on the 19th september, everything on the boat was supposed to be working “as new condition” only to find that was not the case. 3 days later the motor started to make banging noises which was not right & i now realized that three of the four gauges did not work. I rang them and they said they would look at it & fix the problem, we live abit over two hours apart so i agreed to meet half way. The next day they ring me tell me there is nothing wrong with it & they were going charge me $150 for wasting there time & i had to pick it myself, told me that the gauges where not installed properly and it would cost $170 to fix. Got it home, put it in the water & it broke down within five minutes of operating. They come and took it back. Fixed it again & brought it back, put it back in the water and exactly the same thing everytime, it ran for five minutes and shut down again. They come and got the boat back and have now had it for four weeks and have not fixed it yet. They cannot find the problem they tell me. Have offered to give me back the initial price i payed but none of the costs i have incured. Over $1000 in interest, tower and speakers, without all the running around and wasted time, just would like to know where i stand. Thankyou sorry for the saga
on January 12th, 2008 at 3:29 pm
I recently sign a standard REIQ contract to sell my business in QLD, but now due to some circumstances I can not go through with selling my business at this point in time. If I have to break this contract am I liable to paying the buyer money for breaking the contract?