Areas of Practice
Business sales and purchases
Buying or selling a business can be a detailed and complicated transaction. Nash Allen Williams & Wotton’s experienced solicitors are able to guide you through every stage of the sale or purchase: from negotiating and drafting the terms of the contract for sale, to carrying out legal due diligence, and through to settlement. We consider issues such as goodwill; employee entitlements whether terminating or transferring with the business; stock and equipment; intellectual property; as well as any associated conveyance, lease, or assignment of lease for the business premises.
Every business sale and purchase is different, each transaction requiring skill and experience to get right, so it is essential that parties get comprehensive legal advice. Due to our extensive experience handling business transactions for Central Coast clients, our solicitors can provide practical legal advice at every stage of the transaction to ensure that it is progressed efficiently from start to finish. We pride ourselves in taking a client focused approach and we will make sure you fully understand each document you are being asked to sign.
How We Work with Sellers
Our work with Central Coast business owners wanting to sell their business starts well before listing. During the preparatory stage we consult with owners to assess regulations and other legal considerations that affect the business. This not only ensures that the business is fully licenced or compliant where required, but also has time to deal with any legal concerns that would make the business less appealing to buyers.
This can also include advice on structuring the business for sale so that the transaction is completed effectively, both in terms of time and relevant tax implications.
Our services to business sellers extend to advising on and drafting all documents relating to the sale. From draft sale agreements, the contract for sale itself, confidentiality agreements, and the transfer or surrender of the lease, through to any special conditions that may need to be included in the contract.
But our mandate doesn’t end when you find a buyer. We continue working with you through the key steps in the process to the conclusion of the transaction – the exchange of contracts, the transfer or assignment of any lease, obtaining various third-party consents that may be required such as the landlord; the landlord’s mortgagee or indeed any relevant franchisor, transferring the business name and settlement. We assist and advise on all conveyancing matters relating to the sale and transfer of ownership. Selling a business is a complex process, but our services ensure everything is clear there is less anxiety for you.
How We Work with Buyers
At Nash Allen Williams & Wotton we don’t only work with business owners wanting to sell. We also work with individuals and organisations preparing to buy a going concern.
Once you have found a business you are interested in buying, we get to work advising you and carrying out our due diligence enquiries. This covers many aspects, from security held by third parties (lenders or banks) over stock and equipment, property matters, through to and licencing and council regulations issues. Our extensive experience with business sales and purchases also means we are well-placed to advise on the best business structure for your potential acquisition. These considerations can minimise both your personal risk, and your tax exposure.
Once the purchase reaches the stage of discussing terms and the seller issues you a contract, we will advise you on all the terms, what they mean and highlight any special conditions included. Consideration needs to be given to existing service agreements, assignment of leases–or negotiating a new lease–along with any existing plant or equipment lease/ hire purchase agreements.
We understand that the seller is interested in the best commercial outcome for themselves, but the transaction also needs to be favourable for the purchaser.
Business Sales and Acquisitions FAQs
What Information is Needed When Buying a Business?
Some of the most critical legal and financial information you need when preparing to buy a business includes:
- The last two to five years of tax returns.
- The four latest Business Activity Statements (BAS).
- Financial statements for the last two to five years. This should include the balance sheets, the profit and loss, and the cash flow statements for the business. Also ask for the current year’s financial records and statements.
- Details of the business assets that are specifically passing with the sale.
- Whether there is any intellectual property owned by the business that is passing with the sale.
- Details of the inventory and liabilities.
- The current lease and any other contracts that are in place.
- The licences and permits required by the business.
What is the Difference Between Freehold and Leasehold When Buying a Business?
The key difference between freehold and leasehold is property ownership. A freehold business is going to cost more since the sale includes the business and also ownership of the property where the business is carried on. Acquiring a leasehold business means you won’t own the property and will instead be taking over the existing lease–or negotiating a new one.
How do I Prepare my Business for Sale?
The key to preparing your business for sale is to have an exit strategy well in advance, and to know what buyers will look for. You already know what kind of information buyers will ask for, so you need to ensure your business is profitable, lean, has good prospects, and a clear history of growth. Engaging solicitors with experience in business sales and purchases will also help you assess and address other finer issues.
At the very least you should:
- Have a good accountant prepare financial statements for the last two to five years so that information can be given to potential purchasers. You should consider whether you need a confidentiality agreement in place before handing this information over to your purchaser, who may well be a competitor of the business.
- Prepare a list of plant and equipment – know what is owned outright, what is subject to a hire purchase arrangement and what is leased.
- Have the business valued.
- Ensure the business in appropriately staffed and has sufficient stock levels to continue to trade after it’s sold.
- See that there is a current and registered lease in place.
- See that all licencing and regulatory issues are up to date and dealt with;
- Ensure you own any digital assets the business uses such as web pages; FaceBook; Instagram or other social media platforms and have the log-ins available.
- Consider whether to engage a Business Broker to find a buyer for the business.
- Have a competent solicitor draft the contract for sale, deal with the transfer of the lease or purchase of the property and attend to settlement.
How Do You Value a Business for Sale?
There are a number of ways of valuing your business. Depending on the size of your business and its revenue, using a specialist business valuer or accountant will ensure you get the market value right. The simplest methods involve figuring out the net value of the assets or basing the value on revenue. But there are other factors to consider which can influence this significantly, such as goodwill.
How Do You Calculate Goodwill When Selling a Business?
Goodwill is about more than just the value of your brand and your market or customers. The location of your business can contribute to goodwill, as can the stability and growth of your business. It is less tangible than market value, so always seek professional advice when calculating goodwill as part of the market value of your business.