Business Sale Agreement Checklist For Buyers

You've found a business you want to buy, the price feels about right, and the seller has sent through a business sale agreement. That's exciting - but it's also the moment where you want to slow down and check exactly what you're agreeing to.

A business sale agreement in Australia can look deceptively standard. The tricky parts are often in the details: which assets are included, what happens to employees, whether the lease can be assigned, and what promises the seller is actually making about the business.

The good news is that you don't need to become a lawyer to spot the big issues. You just need a practical checklist, a clear view of what matters for your deal, and tailored advice before you sign.

What Should You Check First In A Business Sale Agreement?

You should first check whether the agreement matches the commercial deal you think you've agreed. If the basics are wrong, the rest of the contract can send you down the wrong path.

Start with the front page and the schedule. These parts usually set out the key commercial terms, including the parties, business name, purchase price, deposit, completion date and assets being sold.

Check these items carefully:

• Buyer details: Is the buyer your personal name, company name, trustee name or another entity? If you're buying through a company, make sure the ACN is correct.
• Seller details: Is the seller the actual legal owner of the business assets? A trading name or business name isn't the same as the legal owner.
• Business description: Does it clearly describe the business you're buying, including location, website, social media accounts and trading name?
• Purchase price: Does the price include GST or is GST added on top? Many business sales are treated as the sale of a going concern for GST purposes, but the agreement needs to deal with this properly.
• Deposit: Who holds it, when is it refundable, and what happens if completion doesn't occur?
• Completion date: Is the date realistic, especially if you need landlord consent, finance approval or transfer of licences?

A simple fill-in outline for a buyer's review might look like this. A lawyer should tailor it before you rely on it for your transaction:

1. Parties: Write the exact legal names, ABNs, ACNs and trustee details if relevant.
2. Business Being Sold: Describe the business, premises, trading names and online channels.
3. Assets Included: List equipment, stock, IP, records, goodwill, customer lists and digital assets.
4. Liabilities Excluded Or Assumed: State which debts, employee entitlements or contract obligations you're taking on.
5. Conditions: Add finance, due diligence, landlord consent, licence transfer and key contract approvals.
6. Seller Warranties: Record the promises you need about accounts, debts, disputes, employees and compliance.
7. Completion Deliverables: List exactly what must be handed over on settlement day.

What Assets And Liabilities Are You Actually Buying?

It depends on whether you're buying assets under an asset purchase agreement or shares under a share purchase agreement, but in most small business purchases you should assume you're only getting the assets that are clearly listed. Anything left vague can become a dispute later.

An asset sale agreement checklist should separate what you get from what you don't. This is especially useful if the business relies on equipment, stock, customer databases, software subscriptions or a valuable trading name.

Check whether the agreement includes:

• Plant and equipment: Coffee machines, vehicles, tools, shelving, computers, fit-out and point-of-sale systems.
• Stock: How stock will be counted and valued at completion, and whether there's a cap on the stock value.
• Intellectual property: Business names, trade marks, logos, copyright materials, domain names, website content and social media handles.
• Customer and supplier records: Databases, order history, booking systems and CRM data, subject to privacy law requirements.
• Goodwill: The value of the business reputation, customer relationships and trading history, sometimes dealt with in a goodwill sale agreement.
• Permits and licences: Only if they can legally be transferred or reissued to you.

Also check what liabilities you aren't taking on. You usually won't want responsibility for the seller's old debts, unpaid suppliers, pre-completion tax issues, employee claims from before completion or warranties given to past customers unless you've priced that risk in.

Search the Personal Property Securities Register before completion if key assets might be financed or secured. For example, if a delivery van or expensive oven is subject to a registered security interest, you want that registration released or dealt with at completion so you're not buying someone else's secured asset problem.

What Should The Agreement Say About Employees?

The agreement should clearly say which employees you'll offer employment to, what entitlements are being transferred or adjusted, and what happens if someone doesn't accept your offer. Employee issues can directly affect the true cost of buying the business.

Under the Fair Work Act 2009, a transfer of business can occur where an employee finishes with the seller, starts with you within 3 months, and does substantially the same work, with a connection between the old and new employer. Buying business assets can be one of those connections.

For each employee, ask for a schedule showing:

• name, role and location
• full-time, part-time or casual status
• award or enterprise agreement coverage
• ordinary pay rate, loadings, allowances and bonuses
• accrued annual leave, personal leave and long service leave
• start date and length of service
• any written employment contract or restraint

You should also check whether service will be recognised. In some transfers, you may choose not to recognise prior service for certain entitlements if you tell the employee in writing before they start. However, the rules are technical and can change depending on whether the businesses are associated entities and which entitlement you're looking at.

Say you buy a Brisbane cafe for $300,000. The seller tells you there are 4 staff, but the agreement doesn't mention leave. During review, you find $12,000 in accrued annual leave and an employee with 6 years of service who may be building towards long service leave under Queensland law. You might ask for a price adjustment at completion, require the seller to pay out certain entitlements, or decide not to take on that employee. Without that review, your real purchase price could be higher than you expected.

When you employ staff after completion, give them new written employment contracts and the Fair Work Information Statement. Casuals also need the Casual Employment Information Statement.

What Happens To The Lease, Licences And Key Contracts?

You shouldn't assume the lease, licences or supplier contracts will transfer automatically. Many of these require consent from a landlord, regulator, franchisor, supplier or customer.

If the business trades from premises, the lease is often one of the biggest deal-breakers. Check:

• whether the lease allows assignment to a buyer
• what the landlord needs before giving consent
• whether the seller is in breach or behind on rent
• the remaining lease term and any option periods
• rent review dates, outgoings and make good obligations
• whether you need a new bank guarantee or personal guarantee

Retail lease rules are state and territory based, so the process can differ depending on where the premises are located. For example, there may be disclosure statement requirements and rules about landlord consent. If the business relies on that site, make landlord consent a condition of completion.

Next, check licences and permits. Food business registrations, liquor licences, council permits, childcare approvals, health registrations and industry-specific licences may not be transferable. You may need to apply for your own licence or approval before you can trade.

Key contracts need the same treatment. Look for clauses that restrict assignment, change of control or subcontracting. This matters if the business relies on one major customer or one exclusive supplier. If that contract doesn't transfer, you may be buying a business without the revenue stream you based your valuation on.

For privacy, ask whether customer data can be transferred to you and whether customers need to be notified. If the business is covered by the Privacy Act 1988 or handles sensitive information, you should check that the database transfer fits the privacy policy and consent position.

What Warranties, Restraints And Conditions Should You Ask For?

You should ask for warranties, restraints and conditions that match the risks you're actually taking on. These clauses are where your business purchase legal review can add the most value.

Seller Warranties

Warranties are promises from the seller about the condition of the business. If a warranty turns out to be false, you may have contractual rights against the seller.

Common buyer warranties cover:

• the seller owns the assets and can sell them
• the financial records given to you're accurate
• there are no undisclosed debts, disputes or investigations
• equipment is owned outright or finance has been disclosed
• employee information is complete and current
• the business has complied with the Australian Consumer Law, privacy laws and workplace laws
• no major customer or supplier has said they will leave

Restraints

A restraint can stop the seller from competing with the business after completion, but it needs to be reasonable. Overly broad restraints can be hard to enforce.

For example, a restraint stopping the seller from opening a competing cafe within 3 kilometres for 2 years may be more defensible than a restraint stopping them from working in hospitality anywhere in Australia for 10 years. What is reasonable depends on the business, industry, location and goodwill you're buying.

Conditions Before Completion

Conditions give you an exit or pause if something essential doesn't happen, including under a heads of agreement. Consider conditions for finance approval, satisfactory due diligence, landlord consent, licence transfer, PPSR releases, stocktake, franchise consent, and approval of key contracts.

If a condition matters to the deal, don't leave it as a handshake promise. Put it in the agreement with a clear deadline and consequence if it isn't satisfied.

What Needs To Happen At Completion?

Completion should only happen when the seller is ready to hand over everything needed for you to take control of the business. A clear completion checklist helps avoid a messy first week of trading.

Ask for a completion schedule that sets out what each side must do on the day. This usually includes payment of the balance of the purchase price, transfer documents and practical handover items.

Your buying a business contract checklist should include these completion deliverables:

• ASIC business name transfer number and evidence the seller has started the ASIC Connect transfer, where a registered business name is included
• domain name transfer and login details
• website, hosting, email and social media account access
• trade mark assignment documents, if trade marks are included
• equipment manuals, keys, alarm codes and security access
• customer lists, supplier lists and business records
• stocktake report and final stock value
• lease assignment or new lease documents
• licence transfer approvals or evidence of your new approvals
• PPSR releases for secured assets
• employee records for transferring staff
• training or handover period details

Also check adjustments. The purchase price may need to be adjusted for stock, rent, outgoings, employee entitlements, deposits, prepayments or customer gift cards. The agreement should explain who prepares the adjustment statement, when it's reviewed, and how disagreements are resolved.

Don't forget post-completion help. If the seller is staying on for 2 weeks under a transition services agreement to introduce you to suppliers and show you systems, write down the days, hours, tasks and whether that assistance is included in the price. A friendly handover can become awkward if expectations aren't clear.

Common Mistakes To Avoid Before Signing

The most common mistake is signing before you've checked whether the agreement protects the deal you actually want. Once the contract is signed, your bargaining power is usually lower.

Watch out for these buyer-side traps:

• Relying only on the seller's template: A seller-drafted agreement may be fair, but it can also leave out protections a buyer would normally ask for.
• Not checking who owns the assets: Equipment, vehicles, IP and domains may be owned by a related company, a director personally or a finance provider.
• Ignoring employee liabilities: Leave, long service leave and underpayment issues can materially change the deal economics.
• Assuming the lease will transfer: If the landlord says no, the business may not be able to trade from its current location.
• Accepting vague warranties: A promise that everything is fine is much less useful than targeted warranties about accounts, debts, staff and compliance.
• Leaving digital assets out: Domains, Google Business Profile access, email accounts, booking platforms and social media handles can be central to modern goodwill.
• Forgetting the Australian Consumer Law: If you're taking over customer orders, gift cards or warranty obligations, check who is responsible for pre-completion issues.

A legal review doesn't need to slow the deal down unnecessarily. The goal is to identify the points that genuinely affect risk, price and control of the business, then negotiate those points before you're locked in.

Templates and standard forms can be a useful starting point, but business purchases are rarely identical. A tailored agreement is especially valuable where there are employees, premises, IP, licences, finance conditions, vendor finance arrangements or a high reliance on a few key customers.

Key Takeaways

• Check the basics first: buyer, seller, price, GST treatment, deposit, completion date and conditions.
• Make sure the agreement lists every asset you're buying, including IP, digital accounts, stock, records and goodwill.
• Review employee arrangements carefully, including accrued entitlements, transfer of business rules and new employment contracts.
• Don't assume leases, licences or major contracts will transfer without consent or a fresh application.
• Ask for practical warranties, reasonable restraints and completion deliverables that match the real risks in the deal.
• Get the agreement reviewed before signing, while you still have room to negotiate.

If you'd like help with reviewing your business sale agreement, checking employee and lease issues, or negotiating buyer protections before you sign, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.