35 Questions To Ask When Buying a Business in Australia

Buying a business can be a faster path to growth than starting from scratch. You get customers, systems and revenue from day one.

But a good business on paper can hide big risks in the detail.

The right questions help you uncover what you’re really buying, negotiate a fair price, and set the deal up properly so you’re protected long after completion.

Below, we’ve compiled the essential questions to ask when buying a business in Australia, why each one matters, and how to translate the answers into a safer deal.

Why Do The Right Questions Matter When Buying A Business?

Questions drive your due diligence. They test the story the seller is telling you against documents, numbers and legal obligations.

Good questions can reveal issues before you commit, give you leverage to renegotiate, or help you walk away from a risky purchase.

They also clarify deal structure (asset vs share sale), working capital needs, handover support, and ongoing obligations so there are no surprises later.

If you want a structured legal review alongside your commercial review, consider getting Legal Due Diligence early in the process.

The Big Picture: Commercial, Financial And Legal Health Checks

Performance And Customers

• How does the business actually make money? Which products or services drive most revenue?
• What are the top 10 customers and what percentage of revenue do they represent?
• Are key customers tied to the founder personally, or to the business brand and systems?
• Seasonality: which months are strong or weak, and why?
• Pipeline: what’s already contracted vs what’s just an estimate?

Financials And Working Capital

• Can we review at least 3 years of financial statements, BAS and tax filings?
• How do gross margins and overheads trend over time?
• What working capital is required to keep the business running post-completion (stock, deposits, unbilled WIP)?
• Are there any large or unusual liabilities (ATO debts, loan covenants, director guarantees)?
• Are there one-off items or owner benefits embedded in expenses that won’t continue?

Operations And Systems

• What software, SOPs and KPIs are in place to run the business day-to-day?
• Where are the operational bottlenecks or single points of failure?
• What will the seller do during handover and for how long?
• Which licenses or approvals does the business need to operate, and are they current?

The Essential Questions To Ask The Seller

1) What Exactly Is Being Sold?

Clarify the deal structure upfront. Are you buying shares in a company (and with it, all assets and liabilities), or buying selected assets out of the business?

Each option has different tax, liability and practical implications, so it’s critical to understand the share sale vs asset sale trade-offs before you sign heads of agreement.

2) Will Customers, Suppliers And Key Contracts Transfer?

• Which customer, supplier and distributor contracts exist, and what are their terms and renewal dates?
• Do contracts require consent to assign (for asset sales) or change of control approvals (for share sales)?
• Are there termination-for-convenience clauses that could be exercised right after completion?
• Are there exclusivity, minimum spend or rebate arrangements that affect value?

Ask for copies of all material contracts and a summary schedule (counterparty, term, renewal, fees, termination and assignment provisions).

3) Who Are The Key People And What Keeps Them Here?

• Who are the critical employees and contractors? What do their Employment Agreements or contractor terms say?
• Are there change of control clauses, unvested bonuses or long service leave liabilities you’ll inherit?
• What’s the turnover rate and why do people leave?

If roles and incentives aren’t clear, plan for retention bonuses or revised terms as part of completion.

4) What Premises Does The Business Rely On?

• Is there a lease, sublease or licence? What is the term, options, rent reviews and outgoings?
• Does the lease allow assignment to you, and will the landlord consent?
• Any make-good obligations or unusual lease fees that could bite at renewal?

If premises are central to value, align completion with landlord consent and confirm rent review mechanics in writing.

5) What Intellectual Property And Data Are Included?

• Who owns the brand, logo, domain names and content? Are trade marks registered?
• Is any IP owned by the founder personally or a third party, and can it be transferred?
• What datasets, CRM and mailing lists are included, and are they compliant with Australian privacy laws?

Make sure the sale includes all relevant registrations and that you have the right to continue using the IP and data post-completion.

6) What Liabilities Am I Inheriting?

• Unpaid super, ATO debts, employee entitlements, product warranties, gift cards and credits - what’s the status?
• Are there disputes, threatened claims, or compliance investigations?
• Any personal guarantees by the seller that need to be released or replaced?

Uncovering liabilities early lets you negotiate price adjustments, retention amounts or specific indemnities.

7) What Are The Biggest Risks From Your Perspective?

Ask the seller directly what keeps them up at night. The answer often points to the real issues you need to test during due diligence.

Deal Structure, Price And Risk Allocation

Asset Sale Or Share Sale?

In an asset sale, you pick the assets you want (stock, equipment, IP, contracts) and usually leave liabilities behind. In a share sale, you buy the company that owns everything, including liabilities.

Your lawyers will draft either an Asset Sale Agreement or a Share Sale Agreement to reflect the structure and the risk allocation you negotiate.

How Is The Purchase Price Built Up?

• What is the baseline enterprise value and how was it calculated (EBIT multiple, revenue multiple, DCF)?
• What stock, WIP and cash is included or excluded? How are prepayments and deposits treated?
• Is there a working capital adjustment at completion? What’s the target and methodology?
• Any earn-outs or retention amounts to bridge valuation gaps?

What Warranties, Indemnities And Restraints Will Apply?

• Which warranties will the seller give about the business (ownership of assets, accuracy of financials, compliance, no undisclosed liabilities)?
• Will there be specific indemnities for known risks (e.g. a pending dispute)?
• What restraint of trade (non-compete, non-solicit) will protect your goodwill, and for how long and where?

These legal protections are negotiated and then baked into the sale agreement to reduce your downside if something material was missed or misrepresented.

What Handover Support Will You Get?

• Will the seller provide transition assistance (e.g. 4-12 weeks) and be available for key introductions?
• Will the founder work in the business under a short-term consultancy, and on what terms?
• Who controls communications to customers and staff about the change of ownership?

Financing And Timeline: How Will You Complete The Deal?

How Will You Fund The Purchase?

• Cash, bank finance, or a portion of price deferred or contingent (earn-out)?
• Is the seller willing to provide part of the funding through a Vendor Finance Agreement and security over the business assets?
• Are there lender conditions you must satisfy before completion (e.g. assignment of key contracts, landlord consent)?

What Are The Conditions Precedent?

• Third-party consents: landlord, franchisor, key customers or suppliers.
• Regulatory approvals or licences in your name if required by law.
• Board or investor approvals if you’re buying through a company.

List these conditions and set realistic timeframes. Don’t agree to complete until they’re met or adequately waived with protections.

What Needs To Happen At Completion?

• Asset deliveries (stock count, equipment, IP assignments, domain transfers, passwords, data exports).
• Company deliveries (share certificates, updated registers, resignations and appointments, bank mandate changes).
• Releases of security interests and guarantees, and handover of keys, access cards and devices.

Use a practical completion checklist to keep everyone aligned on who does what on the day.

What Legal Documents Will You Need?

Your exact suite depends on the deal, but most business acquisitions will involve these core documents.

• Heads Of Agreement/Term Sheet: Outlines the key commercial terms and exclusivity while you complete due diligence.
• Sale Agreement: The main contract setting out price, assets or shares being sold, warranties, indemnities, restraints and completion mechanics. This will be either an Asset Sale Agreement or a Share Sale Agreement.
• Disclosure Letter: The seller’s formal disclosures against the warranties.
• Assignment/Novation Deeds: Transfer key contracts, licences and warranties to you where required.
• IP Assignment And Trade Mark Transfers: Move ownership of brand, domains, content and registrations.
• Employment/Contractor Agreements: Re-issue or transfer staff agreements and confirm entitlements.
• Lease Assignment Or New Lease: Ensure the right to occupy continues in your name with agreed terms.
• Finance/Security Documents: Loan agreements, security registrations or a Vendor Finance Agreement if part of the price is deferred.

If you want an end-to-end legal roadmap for acquisition, Sprintlaw’s Business Purchase Package is designed to cover what you’ll need from deal terms to completion.

A Practical, Buyer-Focused Question List You Can Use

Here’s a consolidated checklist of questions to ask when buying a business. Use it to guide your calls, site visits and document requests.

Commercial

• What is the business model and why do customers choose you over competitors?
• How concentrated is revenue across customers, products, regions or channels?
• What growth initiatives work today and which ones have failed?

Financial

• Can we review monthly P&L and cash flow for the last 36 months?
• What’s included in the price (stock, WIP, cash, prepayments)?
• Any off-balance-sheet items or personal expenses through the business?

Legal/Contractual

• List of all material contracts and any that require consent to transfer or change of control.
• Summary of licences and permits needed to operate and their status.
• Any disputes, notices, compliance issues or insurance claims in the last 3 years?

People

• Org chart, key roles, tenure, salaries, bonuses and pending entitlements.
• Any roles that will change or become redundant after completion?
• Retention plans for critical staff during transition.

Premises

• Copies of current leases or licences, options and rent review schedules.
• Landlord requirements for assignment and any fees or bank guarantees.

IP/Data/Tech

• List of registered and unregistered IP and who owns it today.
• Software stack, key integrations and any bespoke code ownership or licences.
• Data assets included in the sale and their legal basis for use.

Transition

• Handover plan with dates, deliverables, and seller availability.
• Customer and staff communication plan and timing.
• What success looks like 90 days post-completion.

Key Takeaways

• Asking the right questions early is the best way to uncover risks, validate value and shape a safer deal.
• Clarify structure first: understand the differences between a share sale vs asset sale and the implications for liabilities and consents.
• Map your conditions precedent and use a clear completion checklist so settlement runs smoothly.
• Lock in legal protections through a well-drafted sale agreement, targeted warranties and practical restraints.
• Line up funding early; if needed, consider a structured Vendor Finance Agreement to bridge the gap.
• Get professional help with Legal Due Diligence and the core documents you’ll need for completion and handover.

If you’d like a consultation on buying a business in Australia, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.