Overview: what selling a business involves
Selling a business is more than agreeing on a price. You will choose a deal structure (asset sale or share sale), prepare information for buyers, negotiate a Business Sale Agreement, satisfy conditions (such as landlord or franchisor consent), and exchange documents at completion. Good preparation typically improves price certainty and reduces risk.
Key drivers that shape most sales include tax outcomes (e.g. small business CGT concessions), change-of-control impacts on customer and supplier contracts, employee entitlements, lease assignment, regulatory licences/permits, PPSR security releases, and allocation of risk via warranties, indemnities and restraints.
Important: This page is general information about Australian business sale law and process. It is not legal or tax advice. Get advice that considers your entity type, contracts, assets, state or territory requirements and timing.
Sale options and strategy
Compare common structures
- Asset sale vs share sale (or unit sale for trusts)
- Private sale vs broker-led campaign
- Price mechanism: fixed price, stock at valuation, locked box or completion accounts
- Earn-out or vendor finance (risk allocation and security)
- Restraint of trade and non-solicitation scope
- Transition and handover services
Issues that affect value and risk
Contract assignability and change-of-control clauses, key-person reliance, customer concentration, IP ownership, lease tenure and options, compliance history, licences/permits, dispute exposure, and the quality of financials all influence buyer confidence and price certainty.
Early curation of a secure data room, clear heads of agreement and realistic timelines usually shorten due diligence and reduce re-trades.
Key documents and due diligence checklist
Organising documents upfront speeds the process and strengthens your position. A typical seller pack includes:
- Confidentiality Agreement (NDA) and Information Memorandum
- Heads of Agreement / Term Sheet with exclusivity (if needed)
- Business Sale Agreement (asset or share sale) and Disclosure Letter
- Assignments/Novations: customer and supplier contracts, third‑party software, and distribution agreements
- Lease and landlord consent; franchisor consent (if applicable)
- Intellectual property assignment (trade marks, domain, website, branding, content, software)
- PPSR searches and releases; payout letters and discharge of security
- Employee transfer schedule, entitlements reconciliation and offers
- Financial statements, tax returns, BAS, management accounts and stock records
- Licences/registrations (ASIC, ABN, industry permits), privacy and data compliance documents
Expect buyer questions about sustainability of earnings, customer churn, regulatory exposure, litigation, cybersecurity and IP chain of title.
Costs and taxes when selling a business
Typical cost ranges
- Legal fees: $3,000–$20,000+ (complexity, negotiations, number of assignments and security releases)
- Accounting/tax advice: $2,000–$12,000+ (deal structure, CGT concessions, price mechanism)
- Broker commission: 5–10% (minimums common), marketing extra
- Searches/filing: $200–$1,500
- Transition/training: as agreed in contract
Large or regulated businesses, franchised outlets, and multi-site operations tend toward the higher end due to more consents and diligence.
Tax considerations
- Capital gains tax (CGT): consider small business CGT concessions
- GST: often treated as a going concern if conditions are met
- Stamp duty: may apply to certain assets depending on state/territory
- Apportionment: allocate price between plant/equipment, stock, goodwill, IP, and WIP
- Timing: settlement date can affect tax position and working capital
Early tax planning can materially improve net proceeds and reduce post‑completion disputes.
Process and timelines
| Stage | What usually happens |
|---|---|
| Preparation | Assemble financials and key contracts, resolve obvious issues, prepare NDA/IM and data room. Identify consents and security to be released. |
| Go to market | Qualify buyers under NDA, manage Q&A, negotiate heads of agreement (including exclusivity and timetable). |
| Due diligence | Buyer reviews legal, financial, tax and operational records. Seller prepares disclosure and clarifications. |
| Contract negotiation | Agree price mechanism, warranties/indemnities, restraints, employee transfers and completion deliverables. |
| Conditions precedent | Obtain landlord, franchisor, regulator, customer and financier consents; secure PPSR releases and payout letters. |
| Completion | Exchange documents, settle funds, transfer assets/shares, deliver access and logins, and change control of IP and data. |
| Post‑completion | Handover assistance, transition services, earn‑out measurement (if any), final reconciliations and notices. |
Selling a business: FAQ
Do I need a lawyer to sell a business in Australia?
Not strictly, but most sellers use a lawyer to structure the deal, negotiate terms, manage consents and prepare completion documents. It protects value and reduces risk.
What are the main steps to sell a business?
Preparation, go‑to‑market, due diligence, contract negotiation, conditions precedent, completion and post‑completion handover.
What documents are needed?
Commonly: NDA, IM, Heads of Agreement, Business Sale Agreement, Disclosure Letter, contract assignments, IP assignments, employee transfer records, landlord consent, PPSR releases and payout letters.
How much does it cost?
Indicatively: legal $3k–$20k+, accounting/tax $2k–$12k+, broker 5–10% plus marketing, searches/filings $200–$1.5k, plus any duty or regulatory fees.
Asset sale or share sale?
Sellers often prefer share sales (tax/clean exit). Buyers prefer asset sales (select assets, fewer legacy risks). The best structure depends on contracts, licences, tax and buyer profile.
What taxes apply?
CGT (with possible small business concessions), GST (often going concern if conditions met) and state duty in some cases. Get early tax advice.
Get free help with selling a business
Have questions about structure, documents, costs or timelines? Use the form and our Australian team will connect you with business sale lawyers near you for free initial guidance and quotes.