Business Sale Contracts
In this weeks 'The Counsel You Keep' - John Gallagher from Argon Law on the Sunshine Coast outlines the provisions and protocols involved in contracts for the sale of small business' in QLD.
Whilst there are many things to do before a contract of sale is prepared, once a party has offered an acceptable price you should talk to your lawyer or broker about drawing up a term sheet and a contract. John outlines the information and key matters within both a term sheet and contract, the provisions involved in the sale of a business, as well as an explanation of the conditions found within a standard form of business sale contract published by the real-estate institute of QLD.
Always ensure you seek professional advice for your specific circumstances, the above is intended to be general in nature.
Are you thinking about selling your small business and are wondering about what form the contract will take?
Whilst there a many things you need to do before your contract of sale is prepared, once you do have a party interested in paying you an acceptable price then you should talk to your lawyer or broker about drawing up a terms sheet and then a contract.
A terms sheet is a list of the key matters to be negotiated and agree between the parties such as the price, deposit and settlement date, how things like stock and employees are to be treated as well as whether a finance or due diligence period is to be granted to the buyer.
Once the parties have agreed on a terms sheet then the contract can be prepared.
Most small businesses in Queensland are sold using the standard form business sale contract published by the Real Estate Institute of Queensland. That document consists of 3 parts being:
- the items schedule
- the standard conditions; and
- the special conditions.
The items schedule will include most of the items included in the terms sheet as well as details about the parties and the business being sold.
The standard conditions are just that. An extensive set of conditions that determine how the transaction will proceed unless they are altered by any special conditions.
Special conditions are needed when you want to include provisions different to those set out in the standard conditions.
To be able to draft these you should have a good understanding of what’s in the standard conditions.
If you would like further information on business sales or purchases please call us on 07 5443 9988 or [email protected].
Argon Law is a Sunshine Coast law firm based in Maroochydore. We are commercial lawyers and property lawyers and are eager to assist you in any way we can.
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