Alex is Sprintlaw's co-founder and principal lawyer. Alex previously worked at a top-tier firm as a lawyer specialising in technology and media contracts, and founded a digital agency which he sold in 2015.
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Buying an existing business can feel like the “fast track” option - you’re stepping into something that already has customers, suppliers, systems and (hopefully) cashflow.
But if you’re buying a business in Queensland, it’s also easy to inherit problems you didn’t bargain for: unpaid debts, messy employee entitlements, unclear ownership of key assets, or contracts that don’t actually transfer to you.
The good news is you can manage many of these risks with a practical legal checklist and a clear understanding of how business sales tend to work in Queensland. Below, we’ll walk you through the key steps we typically recommend to small businesses and startups before they sign anything or pay a deposit. (This is general information only - you should get tailored legal advice and also speak with your accountant about tax and structuring before you proceed.)
1. Start With The Right Deal Structure (Asset Sale vs Share Sale)
Before you do any deep due diligence, get clear on what you’re actually buying. In Australia, business purchases usually happen in one of two ways:
Asset Sale (Most Common For Small Businesses)
An asset sale generally means you buy selected business assets (for example: equipment, stock, goodwill, customer lists, website, phone number, intellectual property) and you leave behind liabilities you don’t agree to take on.
This structure is popular because it can reduce the risk of “surprise” liabilities - but it only works properly if the contract clearly lists exactly what’s included and excluded. It can also have different tax outcomes (for both buyer and seller), so it’s worth getting tax advice early.
Share Sale (Buying The Company Itself)
A share sale means you buy the shares in the company that owns the business. The company stays the same legal entity - you just become the owner of it.
This can be simpler in some ways (the company already holds the licences, leases, contracts and assets), but it often carries more risk because the company may also carry historical liabilities (including tax, employment, contractual and regulatory issues).
If you’re deciding between structures, it’s worth getting advice early - the structure affects everything from risk and due diligence to tax treatment and how easily key contracts can transfer.
2. Confirm What You’re Buying (And Who Actually Owns It)
A common problem when buying a business in QLD is assuming that the seller owns everything used in the business. In practice, businesses often use a mix of owned, leased, licensed, and financed assets.
As part of your legal review, you’ll want to identify:
- Plant and equipment: What items are included? Are they owned outright, leased, or under finance?
- Stock: How will it be valued on completion (at cost, wholesale, retail, or via stocktake)?
- Intellectual property (IP): Business name, trade marks, domain names, logos, social accounts, software, processes and materials.
- Goodwill: What you’re paying for in terms of reputation, customer base and brand value.
- Digital assets: Website, email lists, CRM data, and access credentials (and whether you can legally use/transfer that data).
Do A PPSR Check Before You Pay
If assets are under finance or secured lending, there may be a registered security interest over them. That can mean a lender may have rights over those assets even after settlement if things aren’t handled correctly.
As a practical step, many buyers run a PPSR check as part of due diligence, especially where you’re buying equipment, vehicles, or higher-value assets. (Note: PPSR searches typically attract a small government fee, although some providers may offer limited searches via promotions.)
This won’t replace a proper contract review - but it’s a strong early warning system.
3. Review The Business Sale Contract And Key “Deal” Clauses
In Queensland, business sales are commonly documented through a business sale agreement (and sometimes additional documents like a deed of assignment of lease, IP assignment, restraint deed, and employment transition documents).
Even when the seller provides a “standard” contract, it’s still worth treating it as negotiable - because this contract controls what you get, when you get it, and what happens if things go wrong.
Clauses Buyers Should Pay Close Attention To
- What’s included in the sale: A detailed schedule of assets, IP, stock, and business records.
- Purchase price and adjustments: Stock valuation method, deposits, any working capital adjustments, and treatment of prepaid expenses.
- Conditions precedent: Finance approval, lease assignment, franchisor consent, key supplier consent, or licences being transferred.
- Restraint of trade / non-compete: Preventing the seller from opening a competing business nearby (scope and enforceability matter).
- Warranties and disclosures: What the seller promises is true (and what happens if it isn’t).
- Training and handover support: How long the seller must assist after settlement and what’s included.
- Default and termination rights: Your rights if the seller can’t complete, and the seller’s rights if you can’t complete.
Be Careful With Deposits And “Subject To” Language
Deposits are often paid early, sometimes before your due diligence is complete. Make sure the contract clearly states whether the deposit is refundable and when.
Also, be wary of vague “subject to” conditions that don’t give you a clear right to exit. If a deal is “subject to finance” or “subject to landlord consent”, your ability to terminate should be properly documented.
4. Due Diligence Checklist: Financial, Legal, People, And Operations
Due diligence is where you validate that the business is what the seller says it is. Think of it as making sure you’re not paying a premium for “potential” that doesn’t actually exist.
Here’s a practical due diligence checklist we often recommend when you’re buying a business in Queensland.
Financial Due Diligence
- Profit and loss statements (ideally for 2–3 years)
- BAS statements and GST reporting history
- Bank statements matching reported revenue
- Cashflow patterns (seasonality, customer concentration risks)
- Major recurring expenses and contracts (rent, subscriptions, utilities)
Legal Due Diligence
- Confirm the seller has authority to sell (owners, shareholders, trustees)
- Review key customer and supplier contracts (and whether they can be assigned)
- Identify disputes, claims, complaints or threatened litigation
- Check licences/permits needed to operate (and transfer requirements)
- Confirm ownership of IP and digital assets (including domains and software)
- Check for security interests (including a PPSR check)
Operational Due Diligence
- Systems and processes (POS, booking systems, stock management)
- Key suppliers and whether pricing/credit terms will continue
- Warranties, maintenance schedules, and service history of equipment
- Marketing channels and performance (website traffic, SEO, mailing lists)
Employment And People Due Diligence
If the business has staff, your purchase decision shouldn’t be made without understanding the employment position. Employees can be one of the most valuable parts of the business - and one of the biggest sources of risk if entitlements aren’t handled correctly.
Consider:
- Whether employees will transfer to you, and on what terms (including whether the sale may be treated as a “transfer of business” under the Fair Work Act)
- Any accrued annual leave, long service leave, and other entitlements (and who is responsible for them on settlement)
- Whether there are underpayment risks (award classification, overtime, allowances)
- Existing employment contracts and workplace policies
If you’re taking staff on, you’ll usually want your own Employment Contract templates (tailored to the roles and the relevant award/enterprise agreement) ready to go for the transition.
5. Leases, Licences, And Approvals In Queensland (Don’t Leave These Late)
For many Queensland business purchases, the biggest “make or break” item is the premises.
If the business operates from a physical location, you’ll usually need the lease transferred (assigned) to you, or you’ll need a new lease. This process can take time, and landlords may require financials, personal guarantees, and legal documents before approval.
Lease Assignment And Landlord Consent
Where you’re taking over an existing lease, this is often documented with a deed of assignment and landlord consent process. Your contract should ideally be conditional on landlord consent if the location is essential to the business.
If you’re negotiating the lease at the same time as buying the business, it’s common to have the lease reviewed so you understand:
- rent and outgoings
- repair and maintenance obligations
- permitted use (can you operate the business as intended?)
- options to renew
- make good obligations on exit
Business Licences And Regulatory Requirements
Depending on the industry, you may need Queensland (and sometimes local council) licences or permits. Some licences can be transferred. Others must be re-applied for under your name/entity.
This commonly comes up in industries like food and hospitality, health and personal services, childcare, transport, and regulated retail.
Make sure the sale contract clearly allocates responsibility for:
- what approvals are required
- who applies for them
- what happens if approvals are not obtained in time
6. The Legal Documents You’ll Want Ready Before Settlement
Buying the business is only part of the legal work. The next part is making sure you can run it safely from day one, with the right contracts and policies in place.
Not every business needs every document below, but these are common essentials for small businesses and startups after a purchase.
- Business Sale Agreement: sets out what you’re buying, the price, settlement process, and seller warranties.
- Confidentiality Agreement (NDA): useful before you receive sensitive financials and customer information from the seller.
- Assignment/Transfer Documents: for IP, domain names, social media accounts, and key contracts.
- Lease Transfer Documents: if you’re taking over premises, you may need landlord consent and assignment documentation.
- Privacy Policy: if you collect personal information (for example, online orders, enquiries, or email marketing), a Privacy Policy helps set expectations and supports compliance.
- Website Terms: if the business runs online, Website Terms and Conditions can protect you by setting rules around use, content, and limitations of liability.
- Customer Terms: if you sell goods/services, clear Business Terms can reduce disputes about scope, delivery, payment, cancellations and liability.
- Employment Contracts: if staff are transferring or you’re hiring post-settlement, having an Employment Contract ready helps manage expectations and compliance.
- Shareholders Agreement (If You’re Buying With A Co-Founder/Investor): if you’re purchasing through a company with multiple owners, a Shareholders Agreement can clarify decision-making, exits, funding, and roles.
If you’re buying the business through a company (or setting one up for the purchase), make sure your company’s internal rules are also set up properly - for example, with a Company Constitution where needed.
Key Takeaways
- When buying a business in QLD, start by confirming the deal structure (asset sale vs share sale), because it changes what you inherit and what you can exclude.
- Make sure you can clearly identify and verify ownership of what you’re buying - including equipment, stock, goodwill, digital assets and intellectual property.
- A contract review matters: key clauses like inclusions, restraints, warranties, conditions, and deposits can significantly change your risk profile.
- Due diligence should cover financials, legal compliance, contracts, employees, and operational dependencies (like key suppliers and systems).
- Don’t leave premises and approvals to the last minute - lease assignment and licence transfers can delay settlement or derail the deal.
- Have your post-settlement legal documents ready (customer terms, privacy, website terms, employment contracts, and founder/shareholder arrangements) so you can operate confidently from day one.
If you’d like help reviewing a business purchase or setting up the right legal documents for your acquisition in Queensland, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
Official Sources to Check
Rules and regulator guidance can change. Check the current official material most relevant to this issue before relying on the article:
Control the transaction before completion
What should the buyer or seller line up?
Deal perimeter, due diligence, liabilities, employee and contract transfers, approvals and completion mechanics need to be resolved as one transaction.
