Buying Business Assets in Australia

Buying a business doesn’t always mean buying the whole company.

In Australia, a lot of small business owners and startup founders choose an asset purchase instead of a “share sale” (where you buy the shares in a company). Why? Because an asset purchase can give you more control over what you take on - and what you leave behind.

That said, an asset purchase is still a legally significant transaction. If you’re buying the right equipment, stock, IP, customer contracts, or even a whole “business operation” (without buying the seller’s company), you’ll want to make sure the deal is documented properly, you’ve done your checks, and you’re not accidentally inheriting someone else’s problems.

Below, we’ll walk you through how asset purchases work in Australia, what you should check before you sign, and what should be covered in your asset sale agreement so you can move forward with confidence. We’ll also flag a few tax and duty issues to raise with your accountant before you lock anything in.

What Is An Asset Purchase (And When Does It Make Sense)?

An asset purchase is when you buy specific assets from a business, rather than buying the legal entity (the company) itself.

In practice, it often means you and the seller agree on a list of things you’re buying - and a list of things you’re not.

Common Assets Included In An Asset Purchase

An asset purchase can be flexible. Depending on what you’re buying, the assets might include:

Plant and equipment (machinery, computers, tools, vehicles)
Stock/inventory
Intellectual property (IP) (brand name, logo, domain, software, designs)
Customer lists and marketing databases (where legally transferable)
Business systems (processes, templates, SOPs)
Website and social media accounts
Goodwill (the value of reputation, repeat customers, and presence in the market)
Contracts (supplier agreements, customer contracts, licences) if they can be assigned or novated
Lease rights (if you’re taking over premises, usually via an assignment or new lease)

Small businesses and startups often lean towards an asset purchase because it can reduce risk. With a share purchase, you’re stepping into the company “as is” - including its liabilities, historical compliance issues, and any unknown claims that pop up later.

With an asset purchase, you can often:

avoid unwanted liabilities (like old debts, tax issues, or disputes - noting there are still exceptions)
pick and choose the assets you actually need
structure the deal around practical handover (what is transferring, when, and how)

But it’s not automatically “safer” just because it’s an asset purchase. If the agreement isn’t clear, or you don’t do the right due diligence, you can still end up buying assets that are encumbered, not owned by the seller, or not transferable.

What Actually Transfers In An Asset Purchase (And What Usually Doesn’t)?

One of the biggest misunderstandings we see is assuming that buying “the business” automatically means you get everything needed to run it.

In an asset purchase, only what is expressly included (and capable of being transferred) will move across to you.

Ownership Vs “Right To Use”

Some assets are easy to transfer (like physical equipment the seller owns outright). Others are more complicated because the seller may not fully own them, or they may be tied to third-party approvals.

Examples:

Software: the seller may only have a licence (not ownership), and that licence may be non-transferable.
Website domains: you’ll want a clear transfer process and access to registrar accounts.
Social media accounts: platforms have their own rules - “transfer” might mean changing admin access rather than a legal assignment.
Supplier/customer contracts: the contract might require consent before it can be assigned, or it may need a novation.

Employees And Entitlements (Be Careful Here)

Employees don’t automatically transfer in an asset purchase. If you want to keep staff on, you’ll need to consider how their employment will transition - for example, whether you’ll offer them new employment, whether the deal is a “transfer of business” under workplace laws, and how (and if) accrued entitlements will be recognised or paid out.

This area can have flow-on consequences for leave, redundancy and other obligations, so it’s worth getting specific advice based on the structure of your deal. If you’re planning to hire or retain employees after the purchase, it’s a good idea to have properly drafted Employment Contract documents ready to go so the handover is smooth and expectations are clear.

Licences, Permits And Registrations

Many licences and permits are personal to the holder. In other words, the seller’s licence may not “transfer” to you, even if you buy the business assets.

This is common in regulated industries (food, health, childcare, security, transport, and many others). Your asset purchase agreement should deal with what happens if a licence can’t be transferred in time - for example, by making completion conditional on approvals.

Due Diligence For An Asset Purchase: The Checks You Shouldn’t Skip

Due diligence is the process of checking what you’re buying, confirming the seller’s claims, and identifying risks before you commit.

For a small business buyer, good due diligence doesn’t have to be complicated - but it does need to be targeted and documented.

1. Confirm The Seller Actually Owns The Assets

It sounds obvious, but it matters. Assets could be:

leased (not owned)
financed (secured against a lender)
owned by a related entity (not the seller)
subject to joint ownership or third-party rights

Ask for purchase receipts, equipment registers, warranty documentation, and any finance agreements that relate to major items.

2. Run A PPSR Check (Security Interests)

If you’re buying vehicles, equipment, or other valuable personal property, you should consider whether a lender or another party has a registered security interest over it on the PPSR.

A PPSR search can help you identify whether an asset is encumbered before you hand over money. Depending on what you’re buying, you might also want the agreement to require the seller to remove any registrations before completion.

It can also be worth understanding how the PPSR system works generally, especially if you plan to finance the purchase or use business assets as collateral later on - PPSR is a common area where small business buyers get caught out.

3. Check IP Ownership And Transferability

If the value of the purchase is tied to the brand, website, or product designs, you’ll want to confirm:

who owns the IP (company? founder personally? contractor?)
whether any contractors created key assets (and whether there’s an assignment)
what exactly is transferring (business name, domain, logo files, code repositories, customer databases)

IP transfer is commonly handled via an IP assignment clause or a separate deed. If you’re also taking over ongoing software development or support, you may need additional contracts to cover that relationship.

4. Review Key Contracts You’re Relying On

If the business depends on a major supplier, a key customer agreement, or distribution rights, you’ll want to review those contracts carefully.

Specifically, check:

assignment/novation clauses
termination rights (including change of control or change of operator)
pricing and exclusivity terms
minimum purchase commitments
who owns customer data and how it can be used

If the contract can’t be transferred, you may need the seller to help you negotiate a new agreement with the third party.

5. Understand What You’re Paying For: Stock, Goodwill And Adjustments

Asset deals often include a mix of “hard” value (equipment, stock) and “soft” value (goodwill). Your agreement should be clear about:

how stock is counted and valued (and when)
whether you’re paying a separate goodwill amount
what happens if assets are damaged, missing, or not in working order at handover

This is where many disputes start - not because anyone intended to do the wrong thing, but because the agreement didn’t specify the method and timing clearly.

6. Flag GST, CGT And Duty Early (With Your Accountant)

Tax outcomes can materially change the real price of the deal. For example, asset sales can involve GST (unless the transaction qualifies as a GST-free supply of a “going concern”), capital gains tax (CGT) for the seller, and potentially stamp duty in some states/territories (often depending on the type of assets, like land or “dutiable property”).

Because the right treatment depends on your specific facts (and the contract wording), it’s worth speaking with your accountant or tax adviser early and making sure the agreement matches the intended tax position.

What Should Be Included In An Asset Sale Agreement?

The asset sale agreement is the legal document that sets out what’s being bought, the price, the handover process, and who is responsible if something goes wrong.

Even if you have a good relationship with the seller, a properly drafted agreement protects both sides by putting the deal in writing in plain terms.

In most cases, you’ll want an agreement that is tailored to the assets, risk profile, and handover requirements of your industry. A generic template can miss the details that matter (especially around IP, contracts, staff, tax, and restraints).

These are some of the core clauses we commonly see in a well-structured asset purchase agreement.

Assets Included (And Excluded)

This should be a detailed schedule of assets, including serial numbers where relevant, as well as clear exclusions.

If the seller is keeping certain items (or you’re not buying certain liabilities), it needs to be spelled out clearly.

Purchase Price, Deposit And Payment Terms

The agreement should cover:

the total purchase price and what it covers
deposit amount (if any) and when it becomes non-refundable (if at all)
payment method and timing
any adjustments (stock valuation, prepaid expenses, apportionment of rent or subscriptions)

If you’re buying through instalments, or vendor finance is involved, you’ll want to document it carefully so both sides know what happens if there’s a missed payment.

GST, “Going Concern” And Tax Invoices

If GST applies (or if you intend the sale to be GST-free as a “going concern”), the agreement should deal with this clearly - including any required statements, what each party must do to satisfy the conditions, and whether a tax invoice needs to be issued.

This is also a good place to align with your accountant’s advice on how the purchase price should be allocated across asset categories (which can affect tax outcomes).

Conditions Precedent (What Must Happen Before Completion)

Many asset purchases should be conditional on certain things happening first, such as:

finance approval
landlord consent to transfer a lease
third-party consent to assign key contracts
removal of PPSR security interests
regulatory or licensing approvals

This matters because you don’t want to be locked into completing the purchase if something essential doesn’t come through.

Warranties And Indemnities (Risk Allocation)

Warranties are promises the seller makes about the assets - for example, that they own them, that they’re not encumbered (or that any encumbrances will be cleared), and that the assets are in working order (if that’s what’s agreed).

Indemnities are clauses that allocate responsibility if a specific risk event happens. For example, if there’s a claim that the seller’s IP infringed someone else’s rights, you may want the seller to cover that (depending on the deal and bargaining power).

These clauses can get technical, but they’re a major part of protecting your position in an asset purchase.

Restraints Of Trade And Transition Support

If you’re paying for goodwill, it’s common to include a restraint so the seller can’t immediately set up a competing business and take customers back.

You may also want transition support clauses, such as:

training for a set period after completion
handover of supplier introductions and passwords
assistance with customer communications

The agreement should be realistic and practical - it should reflect how the business actually operates day to day.

Completion Steps And Deliverables

A smooth settlement day usually depends on a clear checklist. Your agreement (or an attached completion checklist) should cover what each party needs to deliver at completion, such as:

signed transfer documents
keys and access cards
login credentials (securely transferred)
domain transfer approvals
IP assignment documents
handover of business records (as agreed)

If you want a structured approach to the paperwork, a dedicated Asset Sale Agreement can be tailored to the assets you’re acquiring and the way the handover will work in practice.

Common Legal Issues In Asset Purchases (And How To Avoid Them)

Asset purchases can be an excellent way to grow quickly - but there are a few recurring “gotchas” that are worth watching out for.

Assuming “No Liabilities” Means Zero Risk

While an asset purchase can help you avoid taking on many historical liabilities, it doesn’t automatically eliminate all risk. Some obligations can follow the business activity, and you can still face issues if, for example, key assets weren’t validly transferred or you start using IP you don’t own.

This is why your due diligence, warranties, indemnities, and completion steps matter.

Not Dealing Properly With The Lease

If the business operates from leased premises, the lease is often one of the most critical pieces of the puzzle.

You may need:

an assignment of lease (with landlord consent), or
a brand new lease in your name.

The asset purchase agreement should line up with whatever the landlord requires and include timing protections (so you’re not forced to complete if consent isn’t granted).

Overlooking Privacy And Customer Data

If customer databases, mailing lists, or CRM systems are part of the “assets”, you should think carefully about privacy compliance and what consents are in place.

In Australia, transferring and using customer data can be restricted by the Privacy Act (and, for marketing messages, the Spam Act). In practice, you may not be able to simply “buy” a list and start contacting people unless the original collection notices and consents cover that use - and you may need a careful transition plan (for example, seller-led communications, opt-ins, or updated privacy disclosures).

Many businesses also need a Privacy Policy (particularly if you’re collecting personal information online), and you should make sure your onboarding process for existing customers is handled appropriately.

Operating Without Clear Terms Once You Take Over

Once you’re running the business, you’ll want your own contracts in place (not the seller’s outdated documents, or something copied from the internet).

Depending on your business model, this might include:

Customer terms or a service agreement
Website terms if you sell online
Supplier agreements (especially if you rely on consistent stock or lead times)
Employment contracts and workplace policies

If you’re standardising how you sell goods or services, strong Terms of Trade can help set expectations around payment, delivery, refunds, and risk.

Forgetting About Consumer Law

If you’re selling to customers (whether B2C or small business customers), you’ll need to comply with the Australian Consumer Law (ACL), including rules around misleading or deceptive conduct, consumer guarantees, refunds, and warranties.

This becomes especially important when you’re taking over an established brand and continuing existing marketing claims. If you’re refreshing the website, ads, or product descriptions, it’s worth ensuring you understand the misleading or deceptive conduct risks before you go live.

Key Takeaways

An asset purchase lets you buy selected business assets (like equipment, stock, IP, and goodwill) without buying the seller’s company, which can help you manage risk.
In an asset purchase, only what’s listed in the agreement (and capable of being transferred) actually moves across - so clarity around inclusions, exclusions, and handover steps is essential.
Good due diligence often includes confirming ownership, checking for security interests (including via the PPSR), reviewing key contracts, and verifying IP rights.
A strong asset sale agreement should cover the assets, price and adjustments, GST treatment, conditions precedent, warranties and indemnities, restraints, and a practical completion checklist.
Common pitfalls include overlooking lease transfer requirements, assuming customer data can be freely transferred, and operating without updated contracts and compliance processes after settlement.

If you’d like help with an asset purchase or getting an asset sale agreement in place, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.

Buying Business Assets in Australia: Steps for Small Businesses