Business & Corporate Lawyers › Business Sales & Acquisitions
Business Sale & Acquisition Lawyers — Protecting Buyers & Vendors from Contract to Settlement.
Buying or selling a business is one of the most significant transactions a person can undertake — and one of the most legally complex. Due diligence failures, poorly drafted conditions, undisclosed liabilities, and inadequate restraint of trade provisions are among the most common causes of post-settlement disputes. A business lawyer protects the buyer's investment and the vendor's proceeds from contract to settlement and beyond.
⚠ Heads of agreement are often expressed to be binding in relation to specific provisions (confidentiality, exclusivity, costs). Do not sign a heads of agreement without legal review — some terms create binding obligations immediately. Get advice before you sign.
What We Help With
Business sales and acquisitions — the full transaction.
Due Diligence — Buyer Side
Legal due diligence for a business acquisition covers: the validity and assignability of key contracts; employee entitlements and redundancy exposure; intellectual property ownership (trade marks, domain names, software); regulatory licences and compliance; any existing or threatened litigation; and undisclosed liabilities. A lawyer manages the due diligence process and prepares a due diligence report identifying material risks before contracts are exchanged.
Business Sale Agreement — Drafting & Negotiation
A business sale agreement allocates risk between vendor and purchaser — including warranties and representations (the vendor's promises about the state of the business), conditions precedent (finance approval, lessor's consent), restraint of trade provisions, adjustments for pre-settlement debtors and creditors, and the treatment of employees. A lawyer drafts or reviews the agreement and negotiates its terms to protect the client's position.
Share Sale vs. Asset Sale — Structure Advice
A business can be acquired as a share sale (acquiring the company that owns the business) or an asset sale (acquiring only specific business assets — plant, equipment, IP, goodwill, and contracts). The choice between structures affects: stamp duty; capital gains tax; the acquirer's exposure to the company's pre-existing liabilities; and employee entitlements. A lawyer advises on the optimal structure for the specific transaction from both a legal and tax perspective.
Heads of Agreement & Exclusivity
Heads of agreement (letters of intent or term sheets) document the commercial terms agreed in principle before formal contracts are prepared. Some provisions in heads of agreement are binding (confidentiality, exclusivity, good faith negotiation, costs); others are "subject to contract." A lawyer reviews heads of agreement before signing to ensure that binding obligations are understood and appropriate, and that the commercial terms adequately protect the client's position.
Lease Assignment & Lessor Consent
Where a business operates from leased premises, the assignment of the existing lease (or negotiation of a new lease) is a critical component of the acquisition. Most commercial leases require the lessor's consent to assignment and allow the lessor to impose conditions. A lawyer manages the lease assignment process — obtaining consent, negotiating conditions (including any requirement for the vendor to remain as guarantor), and ensuring the purchaser has certainty of tenure.
Post-Settlement Disputes — Warranty Claims
Where the vendor's warranties in a business sale agreement prove to be inaccurate — for example, undisclosed liabilities, overstated financial figures, or undisclosed litigation — the purchaser can make a warranty claim for the loss suffered. A lawyer advises on whether a warranty claim is available, the process for making the claim under the agreement, and the realistic damages recoverable.
What the Law Says
Business sales and acquisitions — the legal framework.
Vendor warranties — what the vendor is promising
A business sale agreement includes vendor warranties — representations by the vendor about the state of the business at completion. Common warranties include: that the financial statements provided accurately reflect the business's financial position; that there are no undisclosed liabilities, disputes, or threatened claims; that the vendor owns the assets being sold free from encumbrances; that the vendor has the right to carry on the business (including all necessary licences); and that the material contracts are valid and will remain valid after the sale. Breach of a warranty entitles the purchaser to damages for the loss caused by the inaccuracy.
Restraint of trade — preventing the vendor from competing
A restraint of trade clause prevents the vendor from competing with the business they have sold — for a defined period, in a defined geographic area, in relation to defined activities. Without an effective restraint, the vendor could set up a competing business immediately after selling and approach the customers and employees of the sold business. Courts will not enforce a restraint that is unreasonably wide — the restraint must be reasonable in scope, duration, and geography. A lawyer drafts a restraint that is effective and enforceable, and advises on the enforceability of existing restraints.
Employee entitlements — continuity of employment
On the sale of a business (as an asset sale), employees of the business are technically terminated and re-engaged by the purchaser — unless a deed of assignment of employment assigns the employment contracts to the purchaser. Under the Fair Work Act 2009, an employee whose employment is terminated on the sale of a business may be entitled to redundancy pay (unless the purchaser offers continued employment on the same or comparable terms). In a share sale, employees remain employed by the same legal entity — no termination or re-engagement issues arise. A lawyer advises on employee entitlements and strategies to manage the liability.
Conditions precedent — what must happen before settlement
Business sale agreements typically contain conditions precedent — events or approvals that must occur before the parties are obliged to proceed to settlement. Common conditions include: finance approval (the purchaser obtaining finance to fund the acquisition); lessor's consent (the commercial landlord consenting to the assignment of the lease); regulatory approval (particularly for businesses in regulated industries such as financial services or healthcare); and satisfactory due diligence. A lawyer advises on the appropriate conditions for the specific transaction and drafts them to appropriately allocate the risk of a condition not being satisfied.
PPSR — Personal Property Securities Register
The Personal Property Securities Register (PPSR) is a national register of security interests in personal property (everything except land). Before completing a business acquisition, a purchaser should search the PPSR for any registered security interests over the business's assets — including plant, equipment, inventory, and accounts receivable. Purchasing a business subject to an undisclosed PPSR registration can result in the purchaser losing those assets to a secured creditor who has priority. A lawyer conducts PPSR searches as part of the due diligence process and ensures that all registered security interests are discharged at or before settlement.
Vendor finance & earn-out arrangements
Where the purchaser cannot fund the full purchase price at settlement, or where a portion of the price is contingent on the future performance of the business, vendor finance (the vendor provides a loan to fund part of the purchase price) or earn-out arrangements (part of the price is paid based on future revenue or profit targets) are used. These arrangements create ongoing obligations between the parties after settlement and require careful legal drafting to protect both the vendor's right to receive the contingent payment and the purchaser's right to operate the business without undue interference.
How It Works
One request. A commercial lawyer manages your transaction.
Tell us whether you are buying or selling, the industry, the approximate transaction value, and the stage of the deal (heads of agreement, due diligence, or contracts). A lawyer contacts you for a free consultation.
Submit Your RequestTell us about the transaction
Tell us: whether you are the buyer or vendor; the type of business; the approximate purchase price; and the current stage (early negotiations, heads of agreement, due diligence, or contract review).
Matched to a business transactions lawyer
Your request is matched to a commercial lawyer experienced in business acquisitions — including due diligence, sale agreement drafting, lease assignment, and employee entitlement management.
Transaction managed from start to settlement
A lawyer manages the legal aspects of the transaction from initial advice through due diligence, contract negotiation, and settlement — protecting your interests at every stage.
Common Questions
Business sales — frequently asked questions.
Should I buy the shares or the assets of a business?
The choice between a share sale and an asset sale is one of the most important structural decisions in a business acquisition — and the answer depends on the specific transaction. From a buyer's perspective, an asset sale generally provides more protection (the buyer does not acquire the company's historical liabilities) but requires the separate assignment of each contract, licence, and employee. A share sale is simpler operationally (the company continues with all its existing contracts and licences) but exposes the buyer to all of the company's pre-existing liabilities. Vendors generally prefer share sales (capital gains tax advantages) while buyers prefer asset sales (no historical liability exposure). A lawyer and accountant advise on the optimal structure for the specific transaction.
The vendor won't disclose their financial records — what should I do?
Financial disclosure is fundamental to any business acquisition — a purchaser who cannot verify the financial performance of the business being acquired is taking an unquantifiable risk. Where a vendor is unwilling to provide financial records, the purchaser should not proceed to contract without addressing this. Options include: making the due diligence condition in the sale agreement comprehensive enough to allow withdrawal if financial records are not satisfactory; or structuring part of the purchase price as an earn-out (contingent on the business achieving the performance represented by the vendor). A lawyer advises on how to structure the transaction to manage the risk of inadequate financial disclosure.
The vendor is now competing with the business I bought — what are my options?
If the business sale agreement contained a restraint of trade clause, the vendor's competing activity may be a breach of that clause — entitling you to injunctive relief (an urgent court order stopping the vendor from competing) and damages for the loss caused. Time is critical in these matters — the longer the breach continues, the greater the damage to the business's customer relationships and goodwill. A lawyer applies urgently for an injunction to restrain the competing activity and pursues a damages claim for the loss already caused. Even where the restraint clause is narrow or arguably unenforceable, the threat of litigation often brings a vendor back into compliance.