To be in the best position to sell your business in a prompt manner when you find a purchaser, preparation is the key. There is a lot of work that happens behind the scenes before the money should change hands and a key part of that is having all of the necessary information to give to your solicitor.
Here are a few tips on the information that you should gather before you even start looking for a purchaser:
- up-to-date financials and tax returns for the business (ideally for the last three years);
- an inventory of plant and equipment should be prepared making a note of equipment that you may not own but have the right to use (e.g. coffee machine drink, drinks fridge)
- a detailed list of information concerning any employees including the commencement dates, pay rates and accrued leave;
- a copy of your current lease and disclosure statement if you lease of premises;
- a PPSR search to see if any organisation has lodged a charge over the assets of the business e.g. a bank, finance company ;
- information from your accountant as to how the expected purchase price should be split up between plant and equipment and goodwill;
- if you are operating under a franchise agreement or licence agreement, find your copy of the document and make a note of the transfer requirements including notice periods and costs that will be payable;
- if you must have a licence or an approval as part of your business, e.g. a liquor licence, locate your copy of that licence/approval;
- if you have a loan or overdraft facility or any other kind of debt to the bank, speak to the bank about what it is going to require (i.e. how much of the proceeds of sale) to release the assets of the business;
- if you are not sure about the GST position when you sell the business, get some advice from your accountant beforehand. If you are registered for GST, there are certain conditions you must satisfy in order for the sale to be GST free.
- Get advice about how long it is going to take to be ready for settlement. Particularly when there is a landlord or a bank involved, you will need to allow a few weeks between signing the contracts and settling the matter.
All of the above information is necessary regardless of whether you’re selling a business for $30,000 or $500,000. Most of it is not information that your solicitor can readily obtain from any other source .
If you are thinking about selling a business, come and speak to the experienced professionals at Marriott Oliver who can assist you in being ready to do the deal when you find the buyer.
Carolyn Hagedoorn – Marriott Oliver Solicitors Pty Ltd – 2016