I have not had a chance to write for a while and wanted to list a few things I have observed about business sales. I hope these are helpful.

1. Get your details in order- We find that by engaging with a quality agent you will be encouraged to collate all documentation regarding the business and this includes both financial and legal documentation. The correct A.B.N, A.C.N, name of entity or trust and the registrations are all critical to getting it right on the contract;
2. Get tax advice before you transact- Getting the structure of the purchasing entity right is critical to the tax outcomes later. You need to ensure the actual net amount you expect to receive and the tax concessions available are understood from the outset, so you can negotiate on a figure with confidence;
3. Check what loans are secured over the business- You need to understand what loans must be repaid at completion to give clear title to a buyer. Check what facilities are required to be reduced and to what level. Find out what securities are held including P.P.S.A, home loan mortgages or guarantees, that need to be released and plan ahead with your lender;
4. Work out what adjustments must be made- If you have significant stock or work in progress, you need to figure out exactly how to deal with this as part of the terms of Contract. Find an independent experienced stocktake consultant and ensure the costs are covered in the deal. If you have large amounts of work in progress you need to ensure a clear method to calculate this is written in the Contract. This might be identifying a percentage of an uncompleted project fee;
5. Consider the structure of payment- It is very often required that as a Seller you need to offer some part of the sale price as a financed amount over a set period. Figure out what percentage is acceptable as a risk, how it can be secured and how it is helping the deal get across the line. Consider profit earn out amounts if you are expecting a rise in sales due to a delay or condition arising after completion. Find out how these extra amounts are taxed. Think about making it easier for the buyer to borrow and if a separate consultancy agreement can assist with concerns over restraint of trade after the sale.
6. Terms Sheet- Make sure you start with a terms sheet on agreed fundamental points. Do not waste legal or accounting costs by engaging  with a party if you cannot agree on the big ticket items, like price, or stuff that is essential. Do not have legal advisors renegotiate fundamental terms, or go too far into a deal unless you know the other party can complete on those terms (including adequate finance).  So call us if you are considering buying or selling so we can have an early discussion about the important questions to be resolved before you start.