×

Are you ready to sell your business?

Business greeting

Selling your business isn’t as easy as handing over the keys and stepping away. There are a number of areas you need to consider before selling your business to ensure the best result.

Below we look at two of these factors  – leases and employment contracts.


Leases

A lease is considered a vital asset of a business. If your business is operating from premises that are being leased, you will need to transfer the lease to the buyer of your business.

Check the lease document to make sure it is in order, i.e. properly signed and dated and if it was registered on the title, check the title. Your lawyer can do all this for you.

Many commercial leases contain an option to renew the lease term. For example, your lease may provide an initial term of years (say three, four or five years) and an option to renew for a further specified period at the end of the initial term. The relevant clause will normally require the tenant to exercise that option by a formal notice in writing to the landlord within a specified period of time prior to the completion of the current term but not before the that time period commences. Make sure that this has all been done in the time frame specified in the lease, because any notice given by the tenant to exercise that option will not be valid if it’s given outside the specified time.

Employment agreements

When you sell your business, your employees may either:

  • transfer with the business to the new owner; or
  • end employment with the business.

In both cases, a transfer of business ends an employee’s position with you (the former employer) so you must give your employees notice of ending employment or provide payment in lieu of notice.

When employees transfer with the business, you’ll need to give all relevant employee information to the new owner. There are some employee entitlements that the new owner must recognise and others that the new owner doesn’t have to recognise. Either way, it’s important to communicate with your employees and let them know whether they will be transferring across to the new owner or ending their employment upon the sale.

For more information about preparing your business for sale please do not hesitate to contact us on (07) 3223 6100.

Back to Articles
Redchip

Recent Articles

kaitlyn-baker-vZJdYl5JVXY-unsplash (1)
It’s official – Electronic Signing for Companies is here to stay!

Thankfully, on 22 February 2022, the Corporations Amendment (Meetings and Documents) Act 2022 (Cth) (the Act) received assent, amending the Corporations Act 2001 (Cth) (Corporations Act). This legislation clarifies and makes permanent the temporary relief measures which had in place 2020. The Act establishes a permanent mechanism which allows for: The electronic execution of documents […]

Read more
Untitled design
Who is responsible to repair damage following a natural disaster?

1. Rent Abatement In most cases, a lease will contain a clause whereby the tenant’s obligation to pay rent and other money under the lease (such as outgoings) is abated (either partially or completely) while the Premises are inaccessible or incapable of being occupied. 2. Reinstatement The Lease may contain specific obligations on the Landlord […]

Read more
pexels-nothing-ahead-4502492
Significant Changes to Residential Contracts

What are the changes?   Extension of Settlement Date Recently, there have been media reports of buyers losing their deposits because of a failure of their financial institutions to be able to settle on the settlement date. This change allows for either party to extend settlement date by up to 5 business days from the […]

Read more