Business and commercial
Buying or selling a business in Western Australia
A business sale is a bigger legal commitment than most property transactions, and the two sides are not mirror images. Buyers manage the risk of what they cannot see. Sellers manage the risk of what they have promised, and what follows them after settlement through warranties, restraints and guarantees that do not end automatically.
Conflict clearance and written engagement are required before the firm acts.Quick answer
What should you check before buying or selling a business in Western Australia?
The sale contract is only one part of a business transaction. Value can depend on the lease, licences, employees, intellectual property, equipment, stock, restraints, finance and the accuracy of information supplied. Buyers should decide the purchasing entity and complete due diligence before signing, and confirm the lease can be assigned. Sellers should prepare records months ahead, negotiate a cap and time limit on warranties, and obtain formal releases from personal guarantees, which do not end automatically on sale.
- The sale contract is only one part of the transaction.
- Lease assignment or a new lease is often essential to the value, and consent takes time.
- Asset and share purchases carry different risk and tax consequences.
- Warranties expose a seller after settlement unless capped and time-limited.
- Personal guarantees survive a sale unless the lender or landlord formally releases you.
Jurisdiction: Western Australia.
If you are buying
Your exposure as a buyer is everything you were not told. The contract, the conditions and the due diligence period are the tools that manage it. Get the offer reviewed before signing — even one marked subject to due diligence sets the conditions, the deposit terms and the timetable that govern everything after it.
- Identify exactly what is being purchased: assets, stock, goodwill, intellectual property, licences.
- Review financial and operational information with appropriate advisers.
- Confirm the lease can be assigned to you, and on what terms.
- Check licences, employees, equipment and key contracts, and run PPSR searches.
- Make required conditions clear, measurable and long enough to be useful.
- Decide the purchasing entity before signing.
If you are selling: preparing the business
Selling is the side most owners under-prepare, and the risks run in the opposite direction: the deal is agreed, then unravels during the buyer's due diligence — or it completes and follows you home. The work worth doing starts months before a buyer appears, because anything a buyer cannot verify becomes either a price reduction or a special condition.
- Financial records that reconcile to your BAS and tax returns.
- A lease with enough term, or a renewed option, to be worth assigning.
- Written employment records with accrued entitlements quantified.
- Licences and approvals current and held in the right name.
- Ownership of the business name, domain, website and social accounts held by the selling entity.
- Related-party and informal arrangements documented or unwound.
If you are selling: what you are promising
The warranties in a sale contract are the seller's real exposure. They are your written promises about the business's financial position, legal compliance, contracts, employees and assets — and if one turns out to be wrong, the buyer may have a claim against you after settlement. Standard-form contracts frequently contain warranties broader than a seller should give. Worth negotiating: what you warrant, disclosure against those warranties, a cap on total liability, and a time limit after which claims can no longer be brought. Restraints of trade deserve the same attention: a restraint that inadvertently prevents you working in your own trade anywhere in Perth for five years is a very different retirement than you planned.
Getting released — the step sellers forget
Selling the business does not automatically release you from the personal guarantees you have given. Your guarantee on the premises lease, on equipment finance, on the overdraft — each continues until the landlord or lender formally releases you. If the buyer defaults after settlement and you were never released, the claim can come back to you. These releases must be negotiated as a condition of sale, not assumed.
The lease and the landlord
If the premises matter to the business, the landlord effectively holds a veto over your sale. Consent to assignment takes time and typically involves assessing the buyer's finances and experience, so start it early — deals routinely stall at this step. Consent alone does not release you from your obligations under the lease unless that is specifically negotiated. Reviewing the lease and assigning it are two different jobs, and nearly every business sale with premises needs both.
Advice in English and Vietnamese
Contracts, warranties and guarantees are hard enough in your first language. We advise, explain the documents and correspond in Vietnamese or English at every stage.
Process
- 1
Initial consultation: the deal, the documents and a written fixed-fee quote for the whole transaction.
- 2
Contract review and negotiation before anything is signed.
- 3
Legal due diligence: PPSR, business name and intellectual property, contracts needing consent, licences.
- 4
Lease assignment and landlord consent, started early because it is the most common cause of delay.
- 5
Finance and guarantee documents, including any certificate of independent advice.
- 6
Settlement: conditions, adjustments for stock and employee entitlements, transfer documents, completion.
- 7
For sellers, releases from personal guarantees obtained as a condition of sale.
What to prepare
- The sale contract or the broker's information memorandum.
- The premises lease, and any offer to lease or assignment documents.
- Financial statements and tax returns for the last two to three years.
- Employee list with awards, tenure and accrued entitlements.
- Equipment list, and any finance or lease agreements over it.
- Licences, approvals and any franchise documents.
- Details of any personal guarantees already given.
Risks, deadlines and common mistakes
- Signing an offer before advice — the conditions in that first document decide whether you can exit and recover your deposit.
- Leaving lease assignment until late; landlord consent is the most frequent cause of a stalled settlement.
- Assuming a sale releases you from personal guarantees. It does not.
- Accepting the seller's restraint as drafted, or giving a restraint wider than your own future needs.
- Warranties without a liability cap or a time limit for claims.
- Equipment under finance that is not the seller's to sell until paid out.
Fees and scope
Business settlement is $1,750 for buyers and $1,350 for sellers, including GST. That covers settlement of an agreed transaction: reviewing the executed contract for settlement, preparing and exchanging settlement documents, adjustments for stock and employee entitlements, coordinating with the other side, the broker and any financier, attending settlement, and a written settlement statement. Add a commercial lease review for $750 instead of the standalone $1,100, so settlement plus lease review is $2,500 for a buyer and $2,100 for a seller; retail premises add $550 for the disclosure statement review. Reviewing a lease and assigning it are different jobs — assignment, along with due diligence, contract negotiation, franchise document review and guarantee releases, is quoted separately. We put the whole transaction in one written fixed fee after the first meeting rather than quoting a low number that grows. An initial consultation is $350 for one hour, credited in full against your fees if you instruct us on the transaction.
COMMON QUESTIONS
Frequently asked questions
Should I buy the assets or the shares?+
Asset and share purchases have different risk, tax and contractual consequences. The right structure depends on the business, liabilities and advice from your lawyer and accountant.
Why does the lease matter so much?+
For many businesses the premises are essential. If the lease cannot be assigned or a new lease obtained on workable terms, the value of the business can change significantly.
What is due diligence?+
Due diligence is the structured review of the business's finances, contracts, licences, employees and risks before you commit, so conditions and price reflect what you are actually buying.
Do restraints of trade apply?+
Sale contracts often include restraints preventing the seller from competing. Their enforceability depends on how they are drafted and the circumstances.
How do I prepare my business for sale?+
Start months before going to market. Get financial records reconciling to your tax lodgements, secure enough lease term to be worth assigning, quantify employee entitlements, confirm licences and the business name are held in the right entity, and document or unwind informal related-party arrangements. Anything a buyer cannot verify becomes either a price reduction or a special condition, so preparation is the cheapest negotiating leverage a seller has.
Am I still liable after I sell the business?+
Potentially, in two ways. Personal guarantees on the lease, equipment finance or overdraft continue until the landlord or lender formally releases you — selling does not do it automatically. Separately, the warranties you give in the sale contract can expose you to claims after settlement. Negotiating guarantee releases as a condition of sale, and a cap and time limit on warranty claims, are the two protections that matter most to a departing owner.
What are warranties in a business sale contract?+
Warranties are the seller's written promises about the business: its financial position, legal compliance, contracts, employees and assets. If a warranty proves untrue the buyer may have a claim after settlement. Sellers should negotiate their scope, make proper disclosure of known issues, and seek a cap on total liability and a time limit for claims. Buyers should ensure the warranties actually cover what they are relying on.
Do I need a lawyer if I am using a business broker?+
Yes, because they do different jobs. A broker markets the business, finds the counterparty and negotiates commercial terms. The contract, due diligence, lease assignment, guarantee releases and settlement are legal work, and the standard-form contract a broker provides is drafted for general use, not for your deal.
How long does buying or selling a business take?+
Commonly one to three months from signed contract to settlement, but it depends on the conditions. Landlord consent to lease assignment is the most frequent cause of delay, followed by finance approval and licence transfers. Deals with franchises or liquor licences take longer. Starting the lease assignment early is the best way to protect the timetable.
Can you act for both the buyer and the seller?+
No. The parties' interests conflict, so each side needs its own lawyer. We act for one side and run a conflict check before accepting instructions, which is why it is worth making contact early.