Purchase & Sale of Business

Reviewing a business contract can be complex and stressful. It is therefore advisable to work with legal professionals to ensure all critical aspects of the contract are addressed and your interests are adequately protected. At Buckley Lawyers we assist parties in buying or selling a business to make the process as smooth as possible.

When buying or selling a business, the following are some essential terms and conditions that should be considered in a contract.

1. Purchase Price and Payment Terms:
   • Clear specification of the total purchase price.
   • Detailed payment terms
   • Provisions for any adjustments to the purchase price based on contingencies or future performance.
2. Assets and Liabilities:
   • List of all assets being purchased, including and intangible assets.
   • Clarification on which liabilities are being assumed by the buyer and which will remain with the seller.
3. Due Diligence:
   • Provisions allowing for a due diligence period during which the buyer can investigate the business’ financial standing and other critical areas.
   • Conditions under which the buyer can terminate the agreement based on due diligence findings.
4. Representations and Warranties:
   • Seller’s representations and warranties regarding the business’ financial health, legal compliance, ownership of assets, and other material facts.
   • Buyer’s representations and warranties, which might include their ability to complete the purchase.
5. Indemnities:
   • Indemnification clauses outlining the seller’s responsibility for any liabilities or issues arising from their period of ownership.
   • Provisions detailing the scope, duration, and limits of indemnity.
6. Non-Compete and Non-Solicitation Clauses:
   • Agreements preventing the seller from starting or working with a competing business within a specified time and geographical area.
   • Provisions preventing the seller from soliciting former customers or employees.
7. Transition and Training:
   • Arrangements for the seller to assist with the transition, which may include training the buyer or key employees.
   • Duration and extent of the seller’s involvement during the transition period.
8. Employees and Contracts:
   • Details about which employees will be retained, and terms of their employment.
   • Treatment of existing contracts and obligations, such as leases, supplier agreements, and customer contracts.
9. Intellectual Property and Confidentiality:
   • Transfer of intellectual property rights and details of any licensing agreements.
   • Confidentiality clauses to protect sensitive business information before and after the sale.
10. Conditions Precedent:
    • Specific conditions that must be met before the transaction can be completed such as obtaining financing and regulatory approvals.
11. Closing Date and Procedures:
    • Clear definition of the closing date.
    • Detailed closing procedures, including the exchange of documents and funds.
12. Dispute Resolution:
    • Mechanisms for resolving disputes, such as mediation, arbitration, or litigation.
    • Choice of law and jurisdiction for any legal proceedings.
13. Termination Clauses:
    • Conditions under which either party can terminate the agreement.
    • Consequences of termination, including any break-up fees or return of deposits.
14. Post-Closing Obligations:
    • Any obligations that either party must fulfill after the closing, such as filing necessary documents or fulfilling regulatory requirements.

Should you require advice in relation to the sale or purchase of a business, contact Buckley Lawyers today on (02) 9220 1737.