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.
Information Your should Provide
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Vendor's (your) Details e.g. name, contact details, references (if any), Reason for selling business
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Business Details: Business Name (if applicable in sale), Age of business, ABN, Service, Customer Lists
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Documents: Permits, licenses and registrations, equipment leases, contracts & agreements with customers and suppliers
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Equipment: Inventory of all equipment (if applicable)
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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:
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the name and address of the business and of the vendor(s)
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Statements by the vendor relating to the trading record of the business
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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).
Information Package
Remember the little information package we would have sent out to you before joining out group? Outlining the advantages and strengths of our business and what we had to offer. Or look at our website, and how we present ourselves to prospective purchasers. Or if you ever enquired to franchises you may recall the information they provided you in order to try and sell their business. These information packages are made up for a reason, and it's not to waste ink, paper and postage but instead to enhance the sale of a business.
You may want to consider putting together an information package containing some of the above information (don't include information such as client details and addresses, this information should only be divulged after the sale of contract is signed or a deposit is made for obvious reasons)