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administrator
19-11-2008, 01:53 PM
This is an extract from www.indmowing.com.au website
SELLING YOUR BUSINESS

The following is a guide on what needs to be considered when selling your business. Even if you are not thinking of selling your business now, it is a good idea to go through the information provided to ensure that when the time comes you have the necessary paper work to enhance your business in the sale .MyMow software a great tool to help sell your customer base .

To Purchase MyMow or to see on line demo click here http://www.indmowing.com.au/catalog/product_info.php?products_id=382&osCsid=5075d6418d12ab7c3883f6279d775b53
Information Your should Provide

Vendor's (your) Details e.g. name, contact details, references (if any), Reason for selling business

Business Details: Business Name (if applicable in sale), Age of business, ABN, Service, Customer Lists

Documents: Permits, licenses and registrations, equipment leases, contracts & agreements with customers and suppliers

Equipment: Inventory of all equipment (if applicable)

Accounting Records: Profit & loss statement, debtors, creditors, balance sheet, depreciation schedule, Tax return, Books of account Sales records etc.

Statutory Requirements

Section 52 of the Act requires that any person seeking to sell a small business (a vendor) or an estate agent acting for a vendor, must provide to the prospective purchaser a statement in writing as prescribed by the regulations before accepting a deposit or a signature to a document which is intending to bind the purchaser to a Contract of Sale. This statement is referred to as the Vendor's Statement (a section 52 Statement).

The failure by a vendor to provide the specified statement constitutes an offence. It provides the purchaser with grounds for termination of the contract and a refund of any monies paid provided this right is exercised before taking possession of the business and before the expiration of three months from the date of entering into the Contract.

What does a Vendor Statement Include:

Generally, the information to be supplied is as follows:

the name and address of the business and of the vendor(s)

Statements by the vendor relating to the trading record of the business

Statement by a practicing accountant which sets out relevant financial details of the business including a profit & loss statement for the last three financial years or the period that the business has been carried on (if it's less then three years).

For more discussion on this topic check out

http://www.indmowing.com.au/forum/showthread.php?t=1575&highlight=contract+sale

administrator
19-11-2008, 02:34 PM
Vendor Statement Requirements

The sale of small businesses (Vic) are regulated by the previsions of the Estate Agents Act 1980 ("the Act") and the Estate Agents Regulations 1997. Under the Act, a business means a hotel, boarding-house, a retail, manufacturing, professional, service or trading business and includes any share or interest in any stock, goodwill, property or other asset. A small business is one where the goodwill, plant, equipment and fitting are sold or offered for sale at a price not exceeding $200,000.

The failure by a vendor or agent to provide a vendor's statement with all the required particulars provides the purchaser with the right to terminate the contract and recover any money already paid. This right can only be exercised before taking possession of the business or three months from the date of contract, whichever occurs first.

In other words if the details of the business, trading records, financial records etc. are not there in black and white and a paper trail cannot be found on all aspects of the business then I would leave it alone.

I have heard so many stories like there's 51 clients on the books and a further 20 clients on the side (cashies as they call them) to you as the buyer those 20 "cashies" don't exist and you should not pay for them. If the vendor wants to give them to you for nothing that is fine then you can put them on the books.

Contract Of Sale

A contract of sale should include details of both parties (Vendor and Purchaser). Should also include the contact details of the business. Details of sale, including a break down of Purchase price, any restrictions to the vendor and any further agreements made and should be signed by both parties.



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