You've spent countless hours working and growing your business, so it's time to get the reward for all your hard work. It hasn't always been easy, but hopefully your business is something you can be proud of.
Selling a business can be a very difficult and stressful process. Whether you're planning your retirement or your next business venture, you need everything to go smoothly.
Here are five things to keep in mind when selling a business to make sure it goes smoothly.
5. Get all the paperwork in order
There is a lot of paperwork involved in selling a business, and it can be quite complicated. Some of the documents you may need include:The Contract of Sale
- A Section 52 for small businesses
- A transfer of Lease if there is a Lease
- ASIC name change documents if necessary
- A transfer of any licenses such as liquor license
The exact documents you need will depend on the nature of your business, but the most important thing is to make sure you have all the documents you need and that they're done correctly.
Mistakes with any of these documents can be very costly and time consuming to fix. Getting the help of a lawyer for selling a business is the best way to ensure all the paperwork is done correctly.
4. Negotiate the sale
Getting a good price for your business is, of course, one of your biggest concerns. This starts with valuing the business accurately. You need to do this part with your head, not your heart.
When valuing your business, you need to take into account the value of your assets, estimate future profits, and consider the value of the goodwill your business has with your customer base. Valuing your business is not an exact science, and you may need a professional to help you get an accurate valuation.
When you're negotiating the sale with a potential buyer, there are a number of things that you will need to agree on, including the sale price, handover training, and settlement period.
As with any negotiation, you may not get everything you hoped for. Ultimately, it is up to you whether or not to sell your business for any given amount. In some cases, you may not be able to come to an agreement with a potential buyer.
3. Let your employees know
When selling a business, your employees will either transfer with the business to the new owner or end their employment with the business. In both cases, you will cease to be their employer.
Since your employees will no longer be employed by you after selling your business, you are required to give them notice of ending employment or provide payment in lieu of notice.
In most cases, it's easier for the new business owner to keep the existing staff. However, it's important that you keep your employees informed with what's going on.
2. Don't forget about tax and legal implications
In some cases, Capital Gains Tax (CGT) and Goods and Services Tax (GST) may apply to the sale of your business. A financial professional can help you figure out your tax implications and whether or not you are eligible for CGT concessions which apply to small businesses.
You will also need to cancel your ABN and either transfer the business name to the new owner or cancel the business name.
1. Get expert legal advice
Getting the help of a lawyer for selling a business will ensure the whole process goes as smoothly as possible. Your business lawyer can help you with every step of the process for selling a business. They will ensure that nothing gets missed or overlooked.
At Rose Lawyers, we've been helping our clients buy and sell businesses for over 35 years. We have a great deal of experience with business law, and we know how difficult it can be for business owners to get it right on their own.
If you need a lawyer for selling a business, call us on 03 9878 5222.