PNA Legal

A quick sale needs a ready vendor. You can expect buyers to want to review takings, receipts for purchases, wage books, a copy of your lease and to trial the business. Get ready by keeping some basics handy, a copy of your lease and a list of equipment is a good starting point. Your broker or business agent will find a buyer and negotiate a price, the rest is up to us, the lawyers.

You don't want to pay two commissions. For starters, make sure that all agency agreements are "open" agreements, that is, you (or another broker) are free to find a buyer without incurring a selling fee to the original agent. Never sign more than one exclusive agency. Exclusive agencies technically entitle the agent to a commission even if you, or another broker finds the buyer.

Set reasonable time limits on the agency period. When a buyer is found, precautions should be taken to ensure that the buyer was not introduced to you or the business earlier by another agent. We can insert safeguards into the sale contract to protect you against double commissions

With care. Landlords can torpedo a sale if the proper procedures are not followed or if the buyer does not have the same (or greater) financial resources and retailing skills as you. Landlords have up to 28 days from the date you make a written request to consent to the transfer of the lease. The clock does not start ticking until your lawyers submit a detailed and well crafted application for consent. It is important that the qualifications and financial resources of the buyer are a match, and the earlier that is sorted out the better.

If the sale is handled right, no. If not, you may be forced to fork over one eleventh of the sale price to the ATO. Typically most retail food businesses qualify as going concerns, and are therefore GST neutral. There are however some traps, including where you, as the seller, are also the landlord of the shop, or if the GST status of the buyer is mistaken, or even if there is a glitch in the paperwork.

Be careful, if you have not followed the correct procedures (and unfortunately very few sellers do), the landlord can come after you for unpaid rent and lease money.

Sellers of retail businesses are entitled to a statutory release of liability under the Retail Leases Act provided certain disclosures are made to a buyer, and the landlord, before the transfer of lease takes place. Imagine the peace of mind knowing that you've sold the business with no comebacks. When you sell, make sure you understand your rights and say goodbye to your landlord for good.