Selling a business is a significant milestone—one that requires careful legal planning to protect your interests and ensure a smooth transition. Whether you’re retiring, moving on to a new venture, or receiving an attractive offer, here are the key legal steps every business owner should consider:
1. Review Your Business Structure and Documents
Prior to going into any negotiations, it is important to read over your business’s legal structure and foundational documents like shareholder agreements, partnership deeds, and company constitutions. They mighthave clauses that impact the manner in which a sale can go through.
2. Legal Due Diligence
Prospective buyers will do their own due diligence—and so do you. Ensure your accounting books, contracts, employee agreements, IP protections, and compliance matters are shipshape. Preparation eliminates delays and builds buyer confidence.
3. Negotiate and Document the Sale Agreement
The sale contract defines what is for sale (assets, shares, or both), price, terms of payment, warranties, and limits on future business conduct. Tailoring this document to your enterprise is necessary to avoid conflicts following the sale.
4. Manage Employee Transitions
Where your employees are moving with the business, there may be issues regarding employee entitlements, contracts, and business continuity. It is best to address this in advance to remain compliant with employment legislation.
5. Protect Confidential Information
A confidentiality or non-disclosure agreement (NDA) should be in place before negotiations begin. This protects your trade secrets, client lists, and sensitive information throughout the process.
6. Settle Debts and Tax Obligations
Before finalising the sale, work with your accountant and legal advisor to clear or transfer any outstanding liabilities. You’ll also need to account for tax implications such as Capital Gains Tax (CGT).
7. Get the Right Legal Guidance
Every sale of a business is different. Having an experienced commercial lawyer at your back means you are protected, compliant, and in a position to obtain the optimal outcome.
At MSA LEGAL, we’ve guided many business owners through the sale process to a successful outcome-negotiation to settlement. If you’re contemplating selling your business, call us for straightforward, strategic legal guidance you can trust.
Disclaimer
This article is provided for general information only and must not betaken as legal advice. The article has been taken from NSW legislation and usual Australian general legal principles at the time of publication. Legal outcomes may vary according to your own individual situation. We recommend you seek professional legal advice tailored to your situation.
