Are you ready to sell your business?

Want to get rich by selling your business? Forget it – unless you’re well prepared, DEBORAH CHEW says.

“I want to sell my business in the next six months to take advantage of superannuation changes. How do I prepare?”

Deborah Chew answers: Before you put your business up for sale, you should spend a significant amount of time planning for the sale. It is important that your business is ready to be sold before it is offered for sale, as a lack of readiness may drive down the purchase price.

In any event, the purchaser will want to do due diligence and the sale transaction will proceed more smoothly if you are able to respond promptly and fully to any requests for information.

In preparing your business for sale, you should consider the following:

Is your business currently structured properly for a sale?

If not, you may need to do a pre-sale restructuring. Check that the assets of the business are held by the correct entity and that if there are assets of the business you do not want to sell, they are transferred to another entity.

Do you have financial statements that are complete and up-to-date?

A purchaser often will want to review detailed accounts for at least the past three financial years. While your financial statements may not need to be audited, it will be helpful if they are, as that will give a prospective purchaser comfort that they have been prepared properly and are accurate.

Are the contractual arrangements in respect of your business in order?

You should have signed copies of all significant contracts such as lease agreements, supply agreements or any long-term agreements with customers. Informal arrangements that are material to your business may need to be put in writing. If you are in the process of any significant negotiations, consider whether they need to be completed before you begin discussions with prospective purchasers.

Is your business currently subject to any disputes, potential liabilities or uncertainties that could have a material impact on the value of the business?

If there are matters of this kind, they will need to be dealt with in order to ensure that they do not affect the purchase price for the business or the purchaser’s desire to buy the business.

The sale process will invariably run more smoothly and efficiently (and consequently less expensively and stressfully) if time is taken to properly prepare the business for sale. While some businesses require little work to make them ready for sale, others require more effort to knock them into shape.

Ideally, financial and legal advice should be sought at an early stage.

Deborah Chew has been a corporate and commercial lawyer for almost 20 years and is currently a partner with Hall & Wilcox. Deborah has extensive experience across a broad range of corporate and commercial transactions, with a particular focus on private mergers and acquisitions, capital raisings of all kinds and listed company advice.

 Have a question? Ask our expert.

Disclaimer: The opinions given are personal opinion of the author only. As all situations are different and subject to different facts, you must seek your own independent advice prior to acting on any opinions written here.


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