At Johnstone and Reimer, we understand that the decision to sell or expand your business can be incredibly difficult and is often one of the biggest decisions made by business owners on their business journey.
While all business owners understand the importance of negotiating the best deal, it is equally essential that all transactions of this nature comply with the mandatory legal requirements, irrespective of whether you are the purchaser or the vendor.
These requirements can vary considerably depending on how ownership is transferred. For example, the process and implications differ between a sale of business assets and a transfer of shares in the company operating the business. Our team will guide you through each stage, helping you understand the differences and ensuring the transaction is structured and completed in accordance with the law.
How we may assist you is highlighted below alongside some key steps that are common to most business sale or purchase transactions, regardless of the structure.
- Step 1 – Canvassing the Transaction
We can draft and/or review the heads of agreement or non-binding offer to ensure it aligns with your best interests, whether you’re buying or selling. We can also prepare confidentiality agreements, ensuring sensitive information is protected during the initial negotiation phase.
- Step 2 – Due Diligence
The assistance we provide during this stage will vary depending on whether we act for the vendor or the purchaser.
For vendors, we can help prepare and organise all required legal documentation, including liaising with your accountant to prepare the section 52 statement (applicable only to transactions with a total value below $450,000). We will also support you with responding to the counterparty’s lawyer’s enquiries and provide clarity on key considerations such as licences, permits, and other operational requirements of the business.
For purchasers, we focus on thorough due diligence. This includes confirming that the seller has the legal right to sell the relevant assets, identifying any risks or issues in existing contracts, leases, or the business’ regulatory compliance, and ensuring that all disclosure obligations have been properly met. Our aim is to help you proceed with confidence, with a clear understanding of any risks before you commit to the transaction.
- Step 3 – Negotiating or Preparing the Sale Agreement
Whether it is a sale of assets or a sale of shares, our team can draft or review the sale agreement. We will ensure that every detail is accurate and that your legal interests are protected. While you focus on getting the best deal, our team will ensure we focus on the critical legal provisions including any requisite pre-conditions to the sale, payment terms, restraint of trade clauses, warranties, indemnities, and post-sale obligations.
Where the need arises, our team will also draft or review any necessary documents arising from the sale agreement such as where a vendor may be providing vendor finance to the purchaser.
- Step 4 – Finalising the sale or purchase of the business and assisting with any post-settlement obligations
Once the sale agreement has been executed, our team will guide you through the final stages of the transaction, ensuring a smooth completion. While the exact steps will vary depending on the nature of the transaction, this phase typically includes:
- advising on the satisfaction of any pre-conditions to the transaction;
- assisting with pre-completion obligations; and
- coordinating with the other party’s lawyer to ensure all settlement requirements are met.
Where relevant, we also prepare and manage all corporate documentation required to finalise the transfer with the Australian Securities and Investments Commission (ASIC). This includes lodging forms to record share transfers, and updating company directors or secretaries as needed, ensuring the transaction is completed efficiently, accurately, and in full compliance with regulatory obligations.
If you have any queries about the sale or expansion of your business, feel free to get in touch with our team on (03) 8658 0040.
