Parting ways with a business that you have poured your effort and time into can be a difficult process. Regardless of the reason why you are selling your business there are important considerations to be aware of to ensure this process runs as smoothly as possible.
For legal advice and assistance on any of these matters during the sale of your business get in touch with a Business Sale Lawyer.
4 Considerations When Selling Your Business
1. Your employees
When selling your company the current employees may either transfer with the business to the new owners or their employment contract will end once the business is sold.
If your employees transfer with the business, you will need to ensure that the following information is provided to the new owners:
- Employee’s most recent records; and
- Existing contractual, leave, financial and legal obligations with your employees. You will need to negotiate with the new employer, regarding which party will fulfil these obligations.
You will need to provide your employees with notice of ending employment and let them know that they’ll need to sign a new contract with the new owner that will be effective from the date of the new ownership.
If the employment contracts are not renewed by the new owners, then as their employer you will need to provide as much notice as possible. Being as open and transparent during this stage will provide your employees time to find alternative employment. Employees may also receive certain entitlements upon the sale of the business, regardless of whether they remain employed by the new owner or if they are terminated. It is important that as an employer, the requirements under the Fair Work Act 2009 (Cth) are followed.
2. Legal matters and tax implications of the sale
Insurance policies that you would have taken out during the operation of your business must be considered when selling the business. It is important to be aware of tax obligations that may be required to be fulfilled when selling your business, in particular, Capital Gains Tax (CGT) and the Goods and Services Tax (GST). If you are a small business, CGT exemptions are available which may be applicable to your particular circumstance.
3. Does the buyer of your business wish to use your company name?
If the purchaser of your business wishes to use your existing company name ASIC provide a service that allows you to transfer the name to a new owner. There are nine simple steps which allow a transfer the business name. ASIC provides a simple to use online service to transfer a business name to a new owner. This process is a completely online service which is accessible here
4. Transferring leases and licenses
It is vital to ensure that you provide the new owner all available information regarding any leases, licenses and permits that concern the company. As a seller, it is important to be aware of the potential consequences if these leases are not properly managed.
If are considering selling or have started the process of selling your business and have further questions relating to any of the considerations discussed above, get in touch with a Business Sale Lawyer who can assist you during this process.
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