Considerations for a Business Purchase

Structuring the Acquisition: Asset Sale vs Share Sale

Decide whether to acquire the business via an asset purchase (acquiring selected business assets and possibly liabilities) or by buying shares in the company that owns and operates the business. This choice will affect tax outcomes, transferability of licences and contracts, assumption of liabilities, and transfer of employees. Each structure has different implications for risk, regulatory compliance, and tax effectiveness, and this decision should be guided by a thorough review of both commercial priorities and legal and tax advice.

Buyer Entity Choice and Structuring

Careful consideration should be given to the most appropriate entity to use for the acquisition, such as an individual, company, trust, or partnership. Factors influencing this choice include tax effectiveness (CGT concessions for individuals/trusts may apply), asset protection, liability exposure, and succession planning. In some cases, a company or trust structure may be preferable to isolate risks and manage profits.

Due Diligence

Undertake comprehensive legal, financial, and commercial due diligence. This should include searches of public registers and a systematic review of statutory records, business licences, contracts, real property interests, intellectual property, employment arrangements, litigation exposures, and compliance history. Due diligence protects against unknown liabilities and ensures there are no impediments to transfer

Employees and Employment Law

In asset purchases, employee relationships do not automatically transfer. The seller must usually terminate employment arrangements and the buyer must offer re-employment, keeping in mind accrued entitlements and ensuring compliance with the Fair Work Act 2009 and any applicable awards. In share sales, employment contracts generally continue, but due diligence checks are still essential

Other Practical Steps

Practical matters include exclusivity arrangements, confidentiality agreements, information memoranda, and the organization of settlement logistics.

How We Can Help

If you need assistance purchasing a business in Queensland, contact MobbsMarr Legal for a careful consideration of the acquisition structure, entity selection, regulatory compliance, due diligence, employee transfer, and effective risk management through contractual documentation.

We work closely with your tax and commercial advisors at each stage to ensure a successful transaction