Selling a Business – Frequently Asked Questions

Here are some of the most frequently asked questions of our business lawyers when it comes to selling a business.

Q: I am thinking of selling my business, maybe in a few years. Anything I should be thinking of now? 

A: If you think you may be selling your business at some point in the future, it is a good idea to consult a commercial lawyer for a business legal-health check. Our business lawyers will be able to identify key assets which need to be protected in the form of intellectual property (business names, logos and business methods), key personnel including restraints on those personnel from operating rival business, compliant terms of trade and commercial contracts, which are often purchased following a sale. Having the business in a healthy position legal-wise will ensure that prospective buyers are confident there will be no legal disputes involving the business from past and present clients following the acquisition.  

Q: When should I engage a lawyer to sell my business? 

A: You should speak with a lawyer before you commence negotiations with a potential purchaser. This is because there are various ways to ‘sell’ the business which you may have not given thought to. Further it is important that negotiations are conducted in such a way so that there can be no dispute as to a binding agreement until the formal execution of contracts drafted by lawyers. In this respect it is custom for the vendor/seller’s lawyer to prepare the formal contract for sale, so having your lawyer involved from the start of negotiations will ensure the agreement drafted accurately reflects the bargain.  

Q: What is included in a sale of business contract? 

A: Everything that is being purchased by the purchaser must be included in the contract. This extends to registered business names, list of inventory, intellectual property, equipment and customer lists. It is also common for the purchaser to require an assignment of the lease for the premises the business is being conducted from. 

Q: How will selling my business affect what I do next? 

A: The purchaser may wish to restrict what you do after you sell the business in order to protect their business interests. This can include restraint for a period of time, or a geographical location, or both. Depending on the terms of the restraint you may be prevented from being in competition with the purchaser, associate with competitors, approach clients or staff.

If you have a question about selling your business get in touch with your local Prime Lawyers office.

We have business lawyers located at Sydney, Chatswood, Sutherland and Wollongong.