Selling or Buying a Business Entity

Selling or Purchasing a Business Entity

 

 

 

 

 

 

 

The types of business structures you may need to consider when buying or selling a business include:

  • Sole Trader – this structure allows you to conduct your business on your own or with employees. You are responsible for all debts
  • Partnership – this structure is formed under the Partnership Act. Liability for all debts falls on the partners jointly and severally
  • Limited partnership or Incorporation limited partnership – these business structures allow partners to limit their liability to an amount registered under the Partnership Act
  • Limited liability company – the shareholders of this structure have limited liability and have strict responsibilities set out in the Corporations Act
  • Trusts – usually appropriate for holding business assets, rather than trading

Franchising is a type of business ownership which allows an individual, partnership or company to operate an independent business under the banner of an already established business. A franchise agreement is a document outlining the rights and obligations of both the franchisor and the franchisee. Before entering into a franchise you should check the reputation, track record and financial stability of the franchisor very carefully. Also, find out what advertising budget and back up services the franchisor offers.

Goodwill is a way of describing a special asset of a business for which a purchaser can be called upon to pay. It arises for a variety of reasons, for example, the location of the premises, the quality of the products sold, the performance of the staff, the absence of competition,etc. It is generally reflected in earning power and should be thoroughly assessed by your accountant.

When buying a business you need to consider whether the purchase of business is subject to a lease and whether the lease is to be transferred or a new lease granted.  You need expert legal advise on the purchase of business to protect your interests in this transaction.  Linda Emery Solicitor has  expertise in business law to advise you.

Linda Emery is a Gosford Lawyer with over 30 years of experience.  As a local Gosford Lawyer she is friendly,  approachable and professional.

Call Linda’s office to seek legal advice