Purchase and sale of business often involves the transfer of valuable assets for substantial sums of money. This can be a complex process where a lot of things can go wrong. It is important that you obtain legal advice on the contract before signing any document, and that you have strong legal guidance during the process up to and including settlement.

There are a number of issues that you may encounter during the purchase/sale of business process, and these are just some of the elements that you should be considering:

Preliminary agreements

  • “Letters of Intent” and “Heads of Agreement” what do they really mean?
  • Whether the parties intent to be legally bound by these documents.

Subject matter of the sale

  • What is being sold and in what business structure?
  • Who owns the business? Who are the parties to the transaction?

Restraint of trade

  • Are they enforceable?
  • Where, how and for how long?
  • Who is being restrained?

Stamp duties and GST

  • Note that Stamp Duty payable differs from State to State.
  • Is the purchase of the business GST free?

Assignments of leases & supply contracts

  • What is being assigned?
  • What goes in the Contract?
  • Does the Landlord have to consent?
  • Do I understand the Lease terms and condition?


  • Who is giving the warranty and what is it worth?
  • What does “to the best of my knowledge and belief” really mean?
  • Have I conducted due diligence checks and negotiated on the warranties?

Finance & securities

  • Is the Vendor willing to accept payment of the purchase price in instalments?
  • Are there company charges or mortgages on the asset?
  • Does the Vendor require bank guarantee?

Time delays & right of rescission

  • Be wary of standard contract terms.
  • Is completion of the contract “time of the essence”?

Price revision clause

  • Is there a retention clause in the Contract?
  • Will there be a stocktake on the completion date?

At Owen Hodge Lawyers, we have the commercial experience and legal expertise to guide you through any purchase or sale of business. Our pragmatic approach means we tailor the contract to suit your needs and protect your interests.

See the following list of topics if you are interested in learning about any more about the areas of business support that we provide.

Acquisitions And Divestments Of Commercial And Industrial Properties
Businesses Outsourcing and Exporting
Directors Duties
Partnership Disputes
Reviewing Chinese Product Disclosure Statements
Shareholder Disputes
Types Of Business Structures
Business Sale and Purchase

– Buying Or Establishing A Small Business
– Purchase and Sale of a Business
– Sale Or Purchase Of A Business – The Contract Process

Business Succession Planning
Changes to the Liquor Act – Will there be Boutique Bars?
Contracts and Businsses
Debt Recovery

– Debt Recovery: The Process in NSW
– Steps To Prevent The Need To Recover Debt
– Once your Company has been Served with a Statutory Demand
– The debt recovery process
– Debt Recovery

Dissolution of Your Company
Estates & Trusts
Foreign Investment in Australia (The FIRB)
Franchising Your Business In Australia
How To Secure Your Loan, Credit Or Goods
Joint Venture Agreements
Land and Environment Laws Particular To Developers
Partnership Agreements
Self-Managed Superannuation Fund
Shareholder Agreements
Trusts and Trust Deeds
What to Know in Construction Contracts
Working Together Creating Solutions

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