Sales of business
It is often assumed that the sale/purchase of a business does not need to involve a written contract or a lawyer. There are, however, potential dangers which need to be sorted out properly at the time of the sale in order to prevent their coming back to haunt the parties in the future.
For example, there is usually a lease over the shop or factory from which the business operates. The landlord may want to keep the outgoing business operator liable if the new owner does not pay the rent or the outgoings for the rest of the term of the lease. It is, however, possible in some situations to force the landlord to release the outgoing person from any continuing liability even if the landlord does not want to do so.
Similarly, unless steps are taken to ensure that any employees’ accrued entitlements become the responsibility of the new business owner, then if the new owner fails to pay the employees’ long service entitlements those employees may be able to chase the previous owner of the business. There are some steps that can be taken during the sale process to protect the outgoing person from such claims.
If the owner of the shop/factory sells the property the new owner may be able to terminate the lease unless it has been registered on the title to the land.
If problems such as those referred to above arise, the cost to the parties will be far greater than what it would have been if the sale had been handled properly in the first place.
Additionally there is the peace of mind that comes from knowing that you do not have to be worried about problems in the future.
We recommend that you come and see us for an initial no-obligation meeting to find out whether or not you should have a solicitor involved in the transaction.