Buying and Selling a Business (Cafe, Testaurant, Takeaway shop, Nail Salon, Beauty salon…)

BUYING AND SELLING YOUR BUSINESS?

What are the most common questions when buying and selling a business?

When assisting our clients in buying and selling businesses (cafes, restaurants, beauty salons…), we have listed a few common questions we are often asked by our clients.

. Should I obtain the landlord’s approval before signing the business contract? Yes and No, Obtaining an approval from the landlord may take weeks before you receive a “ Yes”, as you must prove your finances and business experience. However, you can sign the business contract, and most standard business contracts will have a clause that is subject to the landlord’s approval on the transfer of the lease. You can then sign the contract and obtain the landlord’s approval afterwards. If the landlord does not approve the transfer of lease to your name, then you can end the contract of sale of business and have the deposit back.

. Who pays for the landlord’s solicitor fees or the landlord’s agent fees? Per the contract and general condition of a standard business contract, the outgoing tenant must pay the landlord’s agent fees or landlord’s solicitor fees for the transfer of lease. However, both parties can negotiate to share half-half as a normal and fair practice.

. What is the assistant period? The vendor will assist the buyer for a period of time before or after the settlement date to help run the business.

. What is the trial period? The buyer has access to the business and accounting records, and sale records of the business during the trial to see the actual income of the business during this period before deciding to go ahead with the contract.

. What is a health inspection? If the business is a Café, restaurant, or Health premises, such as a lash or nail salon, the buyer can book a presale inspection with the Local Council to check the premises and ensure that any items required by the current business to meet the local council's health standards are in place. The inspector will issue a report after attending the premises.

. Do I have to register a Food premises with the Local Council? Yes, all new owners of the Health premises must register after the settlement date to operate the business.

. Do I need a conveyancer or legal representative when buying and selling a business? And Why?

This is a common question.

Yes. You will need a conveyancer or a legal representative when purchasing a business. your conveyancer (must be a licensed Conveyancer in Full and most importantly who is experienced in the business transactions) or other legal representative will advise you on the Lease, contract of sale of the business, do all relevant searches on the premises and the vendor, seeking consent from the landlord and liaise with all related parties in regard to the health inspection, settlement, preparing the transfer of lease document and working on the settlement figures and other related documents, negotiate terms, conditions with the vendor’s REP, or landlord’s solicitor and other related parties.

When you sell a business, your conveyancer (who must be a licensed Conveyancer in Full) or other legal representative will prepare the contract of sale for the business, as well as other related documents. If you sell a business (under $450K you must have Section 52 prepared by your accountant. Your Conveyancer will then liaise with the buyer’s REP and landlord’s solicitor or agent regarding the transfer of lease, preparing related documents and settlement.

At HN Conveyancing, we are a licensed conveyancer (in Full and have experience in acting for buyers and sellers of businesses. We will assist you in preparing documents for selling and buying businesses, ensuring a smooth and seamless experience throughout the process.

Enquire about our services now, call us at 03 7073 9826 or email Hanh at Hanh@hnconveyancing.com.au

Please note: This blog is for informational purposes only, not legal advice. Please contact our office for your matter.