Buy & Sell Business

Imagine you’ve had a great money making idea in the back of your head for some time.  You think about it regularly and how you could turn it into a viable business proposition, and give up your current job for the world of being self-employed!

You spend hours thinking about sourcing product or equipment, who you know that could be employed, and also marketing ideas, and you can see the dollars piling up in front of you.  Obviously, in reality it isn’t that simple, but, it’s an exciting time for you.  But it’s also fraught with risk if the establishment of the business is not done right.  

Establishing a business or purchasing an existing one requires careful planning and consideration of many legal issues.  Many of the issues are the same, although some are unique to ‘start-up’ operations and others unique to purchasing a going concern.  

Key issues to consider

Some of the key issues you need to consider include, but are not limited to:

a) The proposed business structure – sole trader – partnership – company – trust.  Each structure has specific legal considerations in establishing the entity so that you can trade lawfully in accordance with the law

b) Contract negotiations and clauses in the case of purchasing an existing business

c) Business premises – buying – leasing – building

d) Franchising

e) Finance to purchase the business and fund cash flow

f) Insurance

g) Accounting structure 

h) Working capital and cash flow issues 

i) What legal requirements apply to the industry you are operating in and your type of business in particular.

j) What permits, accreditations or other licencing requirements exist for the type of business

It is vitally important to ensure your business is both legally compliant and owned by you before you commence trading.  

Likewise, the sale of the business also requires careful planning to ensure the exiting owner receives fair payment for the business, and that all associations and liabilities relating to the business and its former owner will cease with the change of ownership.  The common terms ‘clean sale’ or ‘walk in walk out’ accurately describe the desired outcome in any business sale.