January 23, 2019
Buying a Business – Let’s Start the Process
Each year in Australia, an enormous range of business activities are the subject of sales and purchases.
What is relevant and perhaps critical to one business might garner very different considerations for another business.
For example, the lease of premises in a strategic location for retailing might be critical to the business whereas, in another, the retention of key staff might be critical.
So, if you’re intending to buy a business then sit down and calmly list out the issues which are critical to you in your search for that business which is your ideal fit.
Once you have identified the key issues and perhaps even the type of business, you need to carefully step through the process of going about buying.
Issues such as tax – what is the most advantageous way to acquire the target business – a company, a trust, a partnership or a sole trader? These are all questions for your accountant who will play an important role in how to establish your business. Each has its merits, but you need to think strategically and long term. Long term is good, short term is bad.
One other consideration for you and your accountant, as well as your lawyer, will be the issue of GST. If you are buying a business then you need, if you can, to take advantage of the Going Concern exemption. If you can use the exemption then that is money saved, or at the very least money you don’t have to find at the time of settlement of the sale irrespective of whether or not you might get refunds etc in due course.
Contracts in Queensland for the Sale and Purchase of a Business are usually in the REIQ format and an experienced lawyer will well understand the terms and conditions of the contract as well as any potential pit falls.
In next month’s newsletter we’ll consider the Contract details and what is required to finalise the Contract process.