When you sign the contract to sell your business it is often the culmination of much preparation and negotiation. However, that is not the end of the sale, often the signing of the contract is only the first in a number of steps which need to be satisfied before the sale is finalised.
In relation to business sales there are a sometimes many conditions which need to be met before completion of a sale. Conditions can include:
- the purchaser obtaining the finance to complete the purchase (a subject to finance clause)
- transfer of liquor licences,
- transfer of special licences required to operate a business,
- transfer of equipment,
- transfer of client details,
- satisfactory council health inspections for food businesses
- agreement on employee entitlements, and
- the landlord agreeing to the transfer of the lease
In the circumstances where these items are required as part of the agreement to ensure settlement, if any requirement cannot be met the purchaser has a right to withdraw from the sale.
While most purchasers will do whatever they can to continue with the sale, in some circumstances due to the necessity of the item to take over the business completion of the sale is not able to take place.
Signing the contract and obtaining a deposit is only the first step. The sale is not done until all items required under the contract are satisfied and finalisation of settlement of your business takes place.
Navigating compliance with these conditions can be tricky, that’s why you need an experienced OFRM lawyer to assist you with buying or selling a business.