What is an agreement for the sale of a business?

There is a standard agreement in New South Wales and in other states of Australia which is used to transfer the ownership of a business from one person or entity to another. The law society of New South Wales puts out a standard contract which is regularly updated and used in the process of transferring many types of businesses. Increasingly, the transfer of a business is becoming more and more complicated because the ways that businesses are valued are becoming more complicated. For instance, if a business has a domain name, which almost every business has these days, this can be very difficult to measure the direct amount which is allocated to the value of the domain. Some other assets such as property, plant and equipment are less problematic in assigning value because they may simply be the purchase price or the amount which was originally paid for the item minus depreciation.

The standard contract for the sale or purchase of a business also makes necessary adjustments to the purchase price of a business. these adjustments might include payments such as employee’s wages, council rates, utilities bills for gas telephone and Internet usage or the payment of suppliers for various types of business supply. The contract, most importantly sets out the rights of both vendors and buyers in relation to businesses and contains a series of processes which are designed to protect both parties throughout the transaction. The contract is often edited with special conditions by the lawyers for both sides of a deal in an attempt to give further protection to their client.

If you’re buying or selling a business, we can give you assistance with the drafting of the contract or an analysis of a contract for a business which you are examining. We can also implement process of implementation of the contract. If you would like assistance of any of this, please not hesitate to contact us.