Buying or selling a business is a milestone decision that comes with significant risks. Whether you are purchasing a café in Manly, selling a shop in Parramatta, or transferring ownership of a family business in Wollongong, it’s essential to understand the legal steps involved in buying or selling a business in NSW.
At MCB Lawyers, we guide business owners through every stage — from due diligence to settlement — to ensure smooth transactions and strong legal protection.
Key Takeaways
- Due diligence is critical before buying or selling a business in NSW.
- The Contract of Sale, lease transfer, and employee arrangements must be carefully reviewed.
- Professional advice from a business lawyer in NSW can save time, money, and disputes.
Buying or selling a business in NSW? Our commercial lawyers help you manage contracts, leases, and due diligence to protect your investment.
1. Conducting Due Diligence
Due diligence is the foundation of any business sale.
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Buyers should review financials, leases, contracts, licences, and liabilities.
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Sellers must prepare accurate records to avoid future claims.
Failing to conduct due diligence may lead to unexpected debts, compliance issues, or overvaluing the business.
2. Negotiating the Heads of Agreement
A Heads of Agreement (or term sheet) sets out the core terms — price, deposit, inclusions, and settlement date.
While often not binding, it prevents misunderstandings and helps negotiations move forward.
3. Drafting and Reviewing the Contract of Sale
The Contract of Sale of Business is the key legal document. It covers:
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Purchase price and payment terms
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Assets included in the sale (goodwill, stock, equipment, IP)
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Conditions precedent (finance approval, landlord consent)
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Restraint of trade clauses
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Settlement process and ownership transfer
Always have the contract reviewed by an experienced business sale lawyer in NSW.
4. Lease Assignments and Property Issues
If the business operates from leased premises, the lease must be transferred to the buyer with landlord approval.
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Buyers should ensure lease terms align with their plans.
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Sellers must comply with landlord requirements for assignment.
Leases are often a major point of negotiation.
5. Employee and Staffing Considerations
Employment arrangements must be clearly documented:
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How will accrued entitlements (leave, superannuation) be handled?
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Will existing staff be offered ongoing employment?
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Are key employees critical to business continuity?
6. Regulatory Approvals and Licences
Some industries (hospitality, healthcare, childcare, financial services) require licences. Buyers must ensure licences are transferred or reapplied for before settlement.
7. Settlement and Post-Completion
At settlement, funds and documents are exchanged, and ownership passes.
Sellers may also be required to:
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Assist with handover and training
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Introduce clients
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Honour restraint of trade clauses
Why Legal Advice is Critical
Every stage of a business sale carries legal and financial risks. An experienced business lawyer in NSW can:
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Identify liabilities and risks before contracts are signed
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Negotiate favourable terms in the contract of sale
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Manage lease transfers, staff issues, and licence approvals
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Protect your interests at every stage
At MCB Lawyers, we provide tailored advice for buyers and sellers in Manly, Parramatta, and Wollongong.
Final Thoughts
Buying or selling a business is more than a transaction — it’s a life-changing decision. By following the right legal steps and engaging the right advice, you can safeguard your investment and secure your future.
📞 Thinking of buying or selling a business in NSW? Contact MCB Lawyers today for legal guidance.
Frequently Asked Questions
1. What legal steps are involved in buying or selling a business in NSW?
The key steps include conducting due diligence, negotiating a Heads of Agreement, reviewing and signing a Contract of Sale, transferring the lease, dealing with employees and entitlements, obtaining any necessary licences, and finalising settlement. Each stage carries legal risks, so professional advice is essential.
2. Do I need a lawyer to sell my business in NSW?
Yes. A business sale involves complex contracts, lease transfers, and employee entitlements. A lawyer ensures the terms are fair, compliant with NSW law, and that your financial and legal interests are protected throughout the process.
3. What is due diligence when buying a business?
Due diligence is a detailed investigation into the business before purchase. It includes reviewing financial records, contracts, leases, licences, employees, and liabilities. It ensures the buyer knows exactly what they are purchasing and avoids hidden risks.
Disclaimer: This blog post is for general information only and does not constitute legal advice. Please seek tailored legal advice before acting on any of the information provided.