I am selling my business and have located a buyer, what happens now?

A new article series in partnership with Mackay and Whitsunday Life, featuring Chamber members sharing expertise and suggested responses to your business questions.

This month’s question is:

I am selling my business and have located a buyer, what happens now?

Chamber member, Kellee Fogg of Whitsunday Law, responds:

As the seller, it is usually you who has to prepare a business contract of sale.  Even if there is an agent involved, a solicitor should review the special conditions attached to the contract. A buyer can prepare a business contract of sale, but the seller will have access to all of the information that should be inserted into the contract. The parties are not usually bound to purchase and sell a business until a written document has been signed and a deposit has been paid.

Occasionally, a business is sold with goodwill (business reputation, intellectual property, business secrets, and customer loyalty).  A restraint of trade clause in the business contract of sale will deter the seller from opening or managing an identical or similar business in the same area for a certain length of time. This aims to protect the goodwill paid for the business.  However, a restraint may not prevent a seller from gaining employment in the same industry as they are still entitled to earn an income if that is their only skill or way of earning money.

For more information on business contracts of sale, please contact Kellee Fogg at Whitsunday Law on 07 4948 7000 or email kellee.fogg@whitsundaylaw.com.au