Commercial Law
Sale of Business
Selling a business is one of the most significant decisions you will make. We provide expert legal guidance to protect your interests and maximise the value of your transaction.
Selling a business in Victoria involves far more than agreeing on a price. You must navigate complex legal obligations — including the preparation of a Contract of Sale of Business, disclosure requirements under the Sale of Land Act and the Retail Leases Act, employee entitlements, lease assignments, intellectual property transfers, and regulatory compliance. A poorly structured sale can expose you to significant legal and financial risk after settlement. At Legal Wave, our commercial lawyers guide you through every stage of the process, ensuring your interests are protected and the transaction is completed efficiently.
How We Can Help
Contract of Sale of Business
We draft or review the Contract of Sale of Business, ensuring all assets, liabilities, and obligations are accurately captured. We advise on the structure of the sale — whether as an asset sale or a share sale — and ensure the contract protects your interests, including appropriate warranties, indemnities, and restraint of trade clauses.
Section 52 Vendor's Statement
For small businesses with a sale price under $450,000, a Section 52 Vendor's Statement is required under the Sale of Land Act 1962 (Vic). We prepare this statement, which discloses financial details including profit and loss statements, asset lists, and lease information. An inaccurate or incomplete statement can give the buyer grounds to cancel the contract.
Due Diligence Management
We help you prepare for and manage the buyer's due diligence process. We organise your disclosure documents, advise on what information must be disclosed and what can be protected as confidential, and help you respond to buyer queries efficiently and accurately.
Lease Assignment and Landlord Consent
If your business operates from leased premises, the lease must be assigned to the buyer as part of the sale. We manage the lease assignment process, including obtaining landlord consent, reviewing lease terms, and ensuring the assignment is completed correctly at settlement.
Employee Entitlements and Transfers
We advise on the treatment of employee entitlements in the sale, including accrued leave, long service leave, and redundancy obligations. We ensure the contract clearly allocates responsibility for employee entitlements between vendor and purchaser, minimising the risk of disputes after settlement.
Settlement and Post-Sale Support
We coordinate the completion of all agreements, asset transfers, and statutory requirements at settlement. After settlement, we remain available to advise on post-sale obligations, including non-compete clauses, confidentiality requirements, and transitional arrangements.
5 Things Every Seller Should Know
Asset Sale vs Share Sale — Structure Matters
A business can be sold as an asset sale (selling the individual assets of the business) or a share sale (selling the shares in the company that owns the business). The structure has significant implications for tax, liability, and the complexity of the transaction. We advise on the most appropriate structure for your circumstances and ensure the contract reflects the agreed structure accurately.
Restraint of Trade Clauses Are Enforceable
A well-drafted restraint of trade clause prevents you from competing with the buyer for a defined period and within a defined geographic area after the sale. Courts will enforce reasonable restraints. We draft restraint clauses that are enforceable and protect the buyer's legitimate interests while not unduly restricting your future activities.
GST and the Going Concern Exemption
The sale of a business may qualify as a GST-free going concern if certain conditions are met — including that the seller is registered for GST, the buyer is registered or required to be registered for GST, and the sale includes everything necessary to carry on the enterprise. If the going concern exemption applies, no GST is payable on the sale price. We advise on whether the exemption applies and ensure the contract includes the required going concern statement.
Warranties and Indemnities Survive Settlement
The warranties and indemnities in the Contract of Sale of Business survive settlement and can expose you to claims from the buyer after the sale is complete. We ensure the warranty provisions are carefully drafted to limit your exposure, with appropriate time limits, financial caps, and carve-outs for matters disclosed during due diligence.
Prepare Your Business for Sale Early
The best outcomes in business sales come from early preparation. Ensuring your financial records are accurate and up to date, your leases and contracts are in order, your intellectual property is properly registered, and your employee arrangements are compliant will make the due diligence process smoother and give buyers confidence in the business.
Frequently Asked Questions
Ready to Sell Your Business in Victoria?
Our commercial lawyers provide expert, practical guidance throughout your business sale. Contact us today for an initial consultation.