Selling Your Business? Here’s What You Need to Know Before You List

Thinking about selling your business in the next 6 to 12 months?

Whether you're heading into retirement, moving on to your next venture, or simply ready for a change, selling a business involves much more than listing it for sale and shaking hands with a buyer.

Behind the scenes, there’s a complex web of legal, financial, and operational factors that need to be managed if you want a smooth exit - and the best possible return.

At Bane Legal Services, we don’t provide legal advice, and we’re not a law firm - but with over 30 years in business, we know how to connect sellers like you with the right commercial lawyer for your transaction. Here’s what you need to know as you prepare your business for sale - and how the right legal support can make all the difference.

Why Proper Preparation Pays Off

Selling a business is often the biggest financial move a business owner will ever make. It’s your chance to unlock the value you’ve worked hard to build - but poor preparation can lead to delays, disputes, or deals that fall apart entirely.

A legally sound, well-documented business sale can help you:

• Attract serious buyers

• Maximise your sale price

• Avoid legal risks and post-sale liabilities

Key Legal Considerations When Selling a Business

Here’s a breakdown of the most common legal factors your lawyer will help you manage - and why they matter.

1. Asset Sale vs Share Sale - What’s the Difference?

The structure of your sale affects everything from tax outcomes to what’s included in the deal.

• Asset Sale: Often used by sole traders, partnerships or trusts. The buyer purchases specific assets like equipment, contracts, or goodwill.

• Share Sale: Common for companies. The buyer purchases shares and takes on ownership of the entire company - liabilities and all.

Your lawyer can help you assess which structure best suits your situation, based on legal and tax implications.

2. Contract Review - Avoid Nasty Surprises

Before you list your business, all contracts should be reviewed - think commercial leases, supplier agreements, employee contracts, IP licences, and more.

Key questions include:

• Are the contracts transferable to a new owner?

• Do any require landlord or third-party consent?

• Are there any outdated, lapsed, or risky clauses that need attention?

Cleaning up your contractual affairs can make your business more attractive and reduce deal-killing delays during negotiations.

3. Due Diligence - Be Ready for Buyer Scrutiny

Serious buyers will dive deep into your business before signing anything. You’ll need to provide:

• Financial statements (ideally 3 years’ worth)

• Employment records

• Legal and compliance documents

• Key supplier and lease agreements

Having these documents neatly organised - often in a secure digital “data room” - makes the due diligence phase faster and more professional.

4. Managing Employees the Right Way

Employee transitions are a key part of business sales, and mishandling them can lead to Fair Work compliance issues or unhappy staff.

Important points to consider:

• Will employees be offered ongoing employment with the buyer?

• Have accrued leave and redundancy entitlements been calculated?

• Is there a plan in place for clear and timely staff communication?

A clear HR strategy can protect your legal obligations and keep your team (and customers) happy during the handover.

5. Restraints, Warranties and Future Risks

Most buyers will expect:

• Restraint of trade clauses to stop you from opening a competing business nearby.

• Warranties to confirm the financial and operational health of the business.

It’s critical to understand exactly what you’re agreeing to, including how long any restrictions last and what liabilities you might still carry post-sale.

Practical Tips for a Smooth Sale

Here are some ways to get ahead before you even find a buyer:

1. Get your house in order - Financials, contracts, and registrations should all be up-to-date.

2. Protect your IP - Ensure trademarks, domain names, and business names are legally registered and owned by the right entity.

3. Start early - Preparing six to twelve months in advance gives you time to resolve any issues that could reduce your sale value.

4. Engage a lawyer early - Having the right legal support from the outset can save time, money, and stress later.

How Bane Legal Services Can Help

Bane Legal Services is not a law firm, and we don’t offer legal advice. What we do offer is something many business owners tell us is even harder to find - the right commercial lawyer for the job.

With 30+ years of business and commercial experience, we understand what’s at stake in a business sale. We can connect you with lawyers who:

• Conduct pre-sale legal audits

• Draft or review your business sale agreement

• Negotiate fair terms on your behalf

• Ensure compliance with Australian law at every step

We help take the guesswork out of finding the right legal fit - so you can focus on getting the best outcome from your sale.

Frequently Asked Questions

Q: How long does it take to sell a business in Australia?

A: Most sales take between 6 and 12 months from preparation to settlement, depending on business complexity and market conditions.

Q: Do I still need a lawyer if I’m using a business broker?

A: Yes. Brokers help with finding buyers and negotiating price - but you still need a qualified lawyer to draft and review legal documents, manage compliance, and protect your interests.

Q: What’s the difference between an asset sale and a share sale?

A: An asset sale involves selling the business assets only; a share sale involves selling the company itself. Tax, risk, and transfer requirements differ significantly.

Q: How can I increase my business value before selling?

A: Tidy up your books, secure key contracts, protect your IP, and ensure compliance. Buyers pay more for a well-run, low-risk business.

Disclaimer: This blog is for general information only and is not legal advice. Always seek qualified legal advice for your situation.

Ready to sell your business?

Let’s help you find the right legal expert to guide you through it.

[Contact Bane Legal Services] today for a confidential conversation.