Business Sales & Acquisitions
Buying or selling a business is one of the most consequential transactions an owner ever undertakes. Armstrong Lawyers acts for vendors and purchasers of small to mid-market businesses in Victoria, from owner-operator transactions through to share sales of established companies. We work alongside accountants, business brokers and financiers to take the deal cleanly from heads of agreement to completion.
Before signing a heads of agreement, both sides benefit from reading our guides to buying a business in Victoria and selling a business in Victoria.
Share sales vs business (asset) sales
The first question on any sale is whether to sell the shares in the company or the underlying business and assets. Each structure has different stamp duty, capital gains tax, GST, contract novation and employee implications. We advise on the right structure for the transaction, in coordination with the client's accountant.
Section 52 vendor statements
For the sale of a small business in Victoria (currently with a total price of $450,000 or less), section 52 of the Estate Agents Act 1980 (Vic) requires the vendor to provide a statement disclosing prescribed information about the business, including financial results, leases, plant and goodwill. Defects in the section 52 statement can give the purchaser a right to avoid the contract. We prepare these statements carefully, with the supporting financial information.
Due diligence
We run legal due diligence for purchasers — contracts, leases, IP, employees, regulatory approvals, litigation and any threatened claims — and we manage vendor-side due diligence preparation so the deal is not derailed by surprises. For vendors, presenting an organised data room significantly improves price and terms.
Sale agreements and protections
We negotiate the sale agreement itself — purchase price mechanics (including stock at completion, working capital adjustments and earn-outs), warranties and indemnities, vendor disclosures, escrow and retention, restraint of trade, transitional services and handover. The aim is a balanced agreement that closes, not one that lawyers admire.
Settlement and post-completion
We coordinate landlord consents to lease assignment, transfer of key supplier and customer contracts, transfer of employees, ASIC and licensing notifications and the actual movement of money at settlement. Post-completion, we assist with any warranty claims, earn-out disputes and integration issues.
Frequently asked questions
Should I sell my business as a share sale or an asset sale?
It depends on the structure of the business and the tax position of the seller and buyer. Share sales preserve contracts, licences and employee continuity but transfer all historical liabilities. Asset sales let the buyer cherry-pick assets and leave liabilities behind, but trigger contract novations, lease consents and employee transfer issues. The stamp duty, CGT and GST consequences differ in each case and need to be modelled with your accountant before committing.
When is a section 52 vendor statement required in Victoria?
Section 52 of the Estate Agents Act 1980 (Vic) requires a vendor's statement for the sale of a small business in Victoria — currently where the total price is $450,000 or less. The statement must disclose prescribed financial and operational information about the business. A defective or absent section 52 statement can give the purchaser a right to avoid the contract, even after settlement.
How long does a business sale take to complete?
A straightforward owner-operator sale typically runs four to eight weeks from signed contract to settlement, driven mainly by landlord consent to lease assignment and finance approval. Share sales of larger companies with due diligence, warranties and earn-outs commonly take three to six months. Building realistic timing into the contract is more important than pushing for an aggressive completion date.
What due diligence should a buyer carry out?
Legal due diligence usually covers ownership structure, material contracts, leases, intellectual property, employee entitlements, regulatory licences and approvals, litigation and threatened claims, insurance, and tax compliance. Financial and operational due diligence sits alongside the legal review. The findings drive the warranty, indemnity and price-adjustment provisions in the contract.
Are restraints of trade on the seller enforceable?
Yes, to the extent reasonably necessary to protect the goodwill purchased. Restraints in business sale agreements are routinely enforced by Victorian courts where the scope (duration, geographic area and prohibited activities) is no broader than required. Cascading restraints (multiple layered options, with the broadest enforceable level upheld) are standard practice.
Do employees automatically transfer to the buyer?
In an asset sale, employees do not automatically transfer — they are terminated by the seller and offered employment by the buyer. The Fair Work Act 2009 (Cth) contains specific rules about recognition of prior service for accrued entitlements where the buyer is an 'associated entity' or where service is recognised by agreement. Outstanding leave entitlements are typically adjusted at settlement. In a share sale, the employer entity does not change so employees continue without interruption.
What warranties should a seller agree to give?
Standard seller warranties cover title to the business or shares, accuracy of financial information, compliance with laws, ownership of key assets, status of contracts and absence of undisclosed litigation. Sellers should disclose against the warranties in a disclosure letter, cap their liability by amount and time, and exclude consequential loss. The right balance protects the buyer against material surprises without exposing the seller to unlimited post-completion risk.
Related services
- Commercial Law → — structuring, shareholder agreements and ongoing commercial advice for the buyer or seller.
- Franchising → — for the sale or purchase of a franchised business.
- Employment Law → — transferring employees on a business sale.
From the Information Centre
Further reading
Visit the Armstrong Lawyers Information Centre for commentary on Victorian legal issues relevant to this area of practice.
Speak with Armstrong Lawyers
If you are selling or buying a business in Victoria and need clear, commercial legal advice, Contact Armstrong Lawyers on 134 134 or submit an enquiry through our contact page.