The reasons for why you might be selling a business are endless. Regardless, make sure you know the checks that you need to cover beforehand. This is especially the case if you want to sell your business to an overseas buyer.
Overseas buyer as an Associate
When you sell a business, the ABN is transferred to that new owner. However, in the case of an overseas buyer, there are more requirements. An overseas buyer would be similar to a foreign associate. Therefore, they will need to provide proof of identity documentation. This includes primary documents like a passport or birth certificate. Then secondary documents such as a driver’s license. Check to see if the overseas buyer was born or lived in Australia. If so you may be able to speed up the process by providing their Australian TFN. After this, if you are still unsure you can check with a business lawyer.
Tax and legal issues
In selling your business there are legal and tax problems you may run into. Depending on the type of sale there could be risks of the buyer suing you down the track. This can be covered under a specific insurance like run-off cover. The sale of your business may require you to pay GST and CGT tax. Therefore, you should check to see if you can claim small business CGT exemptions if you sell your business to an overseas buyer.
Transferring business to an overseas buyer
Once you get to the stage of finalising the sale you will need to begin transferring ownership. This could include a business lease and licenses such as an alcohol or food license. Then comes the transferring of the ABN and the business name. The other issue to consider is employees. You can either end the employment of the current employees. Alternatively, you can transfer the employees to the new owner. The mood of the employees during the sale is going to be important. Staff that feel disenfranchised and upset are going to cause a new buyer issues. Therefore, you may face issues from that buyer later on as well.
As the seller, a stress-free sale is the goal when you sell your business to an overseas buyer. This might entail a private valuation of the business. Doing the extra steps beforehand and alerting the buyer will make for a smoother sale. There is no reward for surprising an overseas buyer with a mountain of paperwork.
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