×

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

adult-black-and-white-collaboration-935870
Shareholders Agreements & Business Exits

In this presentation, directors Ian Tindale and Peter McLaughlin discuss how clear planning at the outset of a business venture with the preparation of a shareholders agreement can impact when it comes time to exit.

Read more
simon-abrams-286276-unsplash
Webinar: CGT Rollovers Roundup

In this webinar for accountants our tax expert, Trung Vu, rounds up the most interesting CGT Rollovers, providing an overview of each rollover and what to look out for.

Read more
jp-valery-199414-unsplash
Dodge the deer in the headlights this election

The current catch cry from business and property owners is “we’ll wait to see what happens after the election”. I’ve been hearing it for months, yet the election has just been called and it’s still a month away. Imagine the opportunities that will have come and gone in that time.

Read more