What To Ask For When Buying A Business: Questions And Documents For Buyers

Buying an existing business can be an exciting shortcut to growth. You’re stepping into something that (hopefully) already has customers, systems, cashflow and a market reputation.

But buying a business in Australia isn’t just about agreeing on a price and taking over the keys. The real risk sits in what you don’t know yet: hidden debts, overstated revenue, untransferable licences, supplier terms that can be terminated overnight, or assets that aren’t actually owned by the seller.

If you’re working out what to ask for when buying a business, a good rule is this: you want enough information to verify the value of what you’re buying, and enough legal protection to avoid inheriting problems you didn’t agree to.

Below, we set out the key questions to ask, the documents to request, and the legal checks Australian buyers should run before you sign a Business Sale Agreement.

First: What Are You Actually Buying (Assets, Shares, Or Just “Goodwill”)?

Before you request documents, clarify the deal structure. This shapes what you need to ask for, what liabilities you might inherit, and what protections you can negotiate.

Asset Sale Vs Share Sale

• Asset sale: You buy specific assets (equipment, stock, IP, customer lists, lease rights, etc). The seller keeps the business entity. This is common for small businesses and often preferred by buyers because you can avoid taking on unknown liabilities (but you still need to check for things like security interests).
• Share sale: You buy the shares in the company that owns the business. That means you’re buying the entity with its history, contracts, and liabilities (known and unknown). This can be simpler operationally (contracts may stay in place), but riskier if due diligence is weak.

If you’re not sure which structure is being proposed, ask the seller (and your lawyer) early, because your document list will change significantly.

Questions To Ask Upfront

• Is this an asset sale or a share sale?
• What is included in the sale price (stock, equipment, IP, customer database, phone number, website, social accounts)?
• What is excluded?
• Are you buying the trading name only, or the legal entity too?
• Are any key assets owned personally by the seller (or leased/hired)?

It’s also worth confirming whether the purchase is “walk in, walk out” (meaning stock and operating assets are included) and whether a stocktake will occur at completion.

Financial And Tax Questions: What To Ask For When Buying A Business (And What To Verify)

Most buyers focus heavily on financials, and for good reason. But it’s not just “is the business profitable?” It’s also “is the revenue sustainable, provable, and correctly recorded?”

Here are the documents to request and the questions to ask so you can validate the numbers.

Documents To Request

• Profit and loss (P&L) statements for at least the last 2–3 financial years (and year-to-date).
• Balance sheets for the same period.
• BAS statements (Business Activity Statements) and GST records.
• Tax returns (business and/or company, depending on structure).
• Bank statements (to match deposits to revenue claims).
• Accounts receivable/payable ageing reports (who owes money to the business, and who the business owes).
• Inventory/stock records and stocktake history (if relevant).
• List of assets with purchase dates and depreciation schedule (especially for equipment-heavy businesses).

Questions To Ask

• What are the main revenue drivers (walk-ins, subscriptions, recurring contracts, online sales, referrals)?
• How concentrated is revenue (for example, do 1–3 customers make up most income)?
• Are there seasonal fluctuations?
• What are the major expenses, and are any expenses “personal” to the seller that won’t continue?
• Are there any outstanding debts, tax liabilities or payment plans?
• Are there any “cash” sales not recorded properly (a red flag for both risk and valuation)?

Where possible, aim to reconcile what you’re being told with third-party evidence (bank deposits, merchant statements, contracts, and tax reporting). If anything doesn’t reconcile, treat that as a due diligence issue to resolve before you commit.

GST And “Going Concern” Treatment

Many business sales are structured as a “going concern” for GST purposes. Whether that applies depends on the circumstances, the contract terms, and whether the business is being sold as an operating enterprise.

Rather than guessing, ask:

• Is the sale intended to be treated as a GST-free supply of a going concern?
• What conditions must be met before settlement (for example, the seller continues operating up to completion)?
• Will the contract allocate GST responsibility and evidence requirements?

This section is general information only and isn’t tax advice. Your accountant should confirm the GST treatment for your specific purchase, and your lawyer should ensure the sale documentation properly reflects what’s agreed.

Ownership, Assets, And PPSR Checks: Make Sure You’re Actually Getting Clear Title

One of the most overlooked parts of buying a business is confirming the seller has the right to sell the assets free and clear.

In Australia, assets can be subject to security interests (for example, equipment financed under a lease, or assets secured under a general security agreement). If you buy without checking, you could pay for assets that a lender can still claim.

Key Documents To Request

• Asset register showing what is owned vs leased/hired/financed.
• Invoices/receipts for major equipment purchases (helpful evidence of ownership).
• Finance agreements relating to equipment, vehicles, or business funding.
• List of encumbrances (anything secured against business assets).

The PPSR: What To Ask And What To Do

The Personal Property Securities Register (PPSR) is a national register that can reveal whether there are registered security interests over certain personal property.

As part of your due diligence, it’s common to:

• request the seller discloses all security interests, and
• run your own checks before completion.

Depending on the assets involved, you may want to run a PPSR search against the relevant details (for example, serial-numbered goods like vehicles, or against the grantor for broader security registrations). If you’re unsure how to do this, the articles on the PPSR and a PPSR check are a useful starting point.

Questions To Ask About Assets

• Which assets are owned outright, and which are leased, rented, or under finance?
• Are any assets shared with another business/entity?
• Are there any security interests registered over the assets or the seller entity?
• Will the seller provide releases from financiers at settlement?
• What warranties will the seller give that assets are transferred with clear title?

If the seller can’t deliver clear title, that doesn’t always mean the deal is dead. It may mean you need conditions precedent (things that must happen before completion), price adjustments, or tighter settlement mechanics.

Contracts, Leases, And Key Relationships: What Needs To Transfer (Or Be Re-Signed)?

A business is often worth far more than its physical assets. The real value can sit in its contracts and relationships: its premises lease, supplier pricing, exclusive arrangements, recurring customers, and licences that make trading possible.

The important point is that many contracts do not automatically transfer just because you bought the business assets.

Commercial Lease And Premises Documents

If the business operates from a physical location, the lease can make or break the deal. You’ll usually need an assignment of lease, a new lease, or a landlord consent process.

Ask for:

• a copy of the current lease (and any amendments, side letters or renewal options)
• the current rent, outgoings, bond/bank guarantee details, and rent review dates
• the permitted use clause (to ensure your intended business activities fit)
• any landlord notices or disputes (for example, breaches or arrears)
• details of fit-out ownership (who owns what, and what happens at end of lease)

Also ask the seller:

• Has the landlord agreed in principle to the transfer?
• Is there any requirement for you to provide personal guarantees?
• Are there any upcoming rent increases or refurbishment obligations?

Supplier And Customer Contracts

For any business with material supplier terms or ongoing customers, request:

• a list of top suppliers (and copies of key supply agreements)
• copies of customer contracts (especially for recurring revenue)
• details of any exclusivity arrangements or rebates
• any contract termination rights triggered by a “change of control” or sale

This is an area where buyers can get caught out. You might assume you’re buying “the whole operation”, but then find out a key supplier can terminate on 30 days’ notice or renegotiate pricing immediately.

Intellectual Property And Branding

Your ability to trade under the business name (and keep the customer trust tied to that name) is critical.

Ask for:

• details of who owns the business name, domain name, logos, and branding materials
• website ownership and access (CMS logins, hosting, analytics, email accounts)
• social media account ownership and transfer plan
• any trade marks registered (or trade mark applications), plus evidence of ownership

Make sure IP is explicitly dealt with in the sale documentation. If ownership is unclear, you may need a separate IP assignment or tighter clauses in the Business Sale Agreement.

Customer Data And Privacy Compliance

If the business holds customer databases, mailing lists, or loyalty program data, you should check what was collected, how it’s used, and whether it can be transferred to you lawfully.

Request copies of:

• the Privacy Policy (if the business has one)
• terms and conditions for membership/loyalty programs
• any consents collected for marketing
• data breach response procedures (if any)

Even small businesses can have privacy obligations depending on what data they collect and how they use it. If you’ll be running the business online or collecting customer details, having a properly drafted Privacy Policy is a practical starting point.

People, Compliance, And Risk: Employees, Licences, Disputes, And “Red Flag” Questions

When you buy a business, you’re often stepping into an ecosystem of people and compliance requirements. That includes staff, contractors, licences, safety systems, and sometimes ongoing disputes.

This is where asking the right questions can protect you from taking on obligations you didn’t price into the deal.

Employees And Contractors

Ask for:

• a staff list (roles, start dates, hours, pay rates, leave balances)
• copies of employment contracts and contractor agreements
• details of any bonuses, commissions or incentive arrangements
• any workplace policies (especially WHS, conduct, harassment, and leave policies)
• superannuation compliance confirmation

Depending on the structure, employees may transfer with the business (and their accrued entitlements can matter a lot), or they may need to be terminated and re-hired. Either way, you’ll want your contracts ready to go, such as an Employment Contract tailored to the roles you’re taking on.

Key questions to ask include:

• Are any employees on visas or subject to special conditions?
• Are there any current disputes, unfair dismissal claims, or underpayment issues?
• Are there any key employees essential to the business’s performance, and will they stay?

Licences, Permits, And Industry Approvals

Licensing issues can delay settlement or prevent you from trading after completion.

Ask:

• What licences/permits are required to operate (state, local council, industry regulator)?
• Which licences are transferable, and which require a new application?
• Are there any compliance notices, audits, or recent breaches?

If the business relies heavily on a specific approval (for example, food-related licences or regulated activities), consider making the sale conditional on you obtaining that licence, or at least on the seller assisting with the transition.

Insurance And Claims History

While insurance doesn’t always “transfer”, you should still ask for:

• current insurance certificates (public liability, professional indemnity, property, cyber, etc.)
• claims history and incidents in the last few years
• any known risks that insurers have flagged

This helps you assess risk (and it also helps you get appropriate cover quickly once you take over).

Disputes, Complaints, And Regulatory Issues

You should ask plainly:

• Are there any disputes with customers, suppliers, landlords, employees, or regulators?
• Have there been any threats of legal action?
• Are there any outstanding refunds, chargebacks, warranty claims, or ACCC complaints?

Also ask for any documentation that supports the answer (for example, correspondence, settlement deeds, or formal notices). If something is unresolved, your lawyer can help you negotiate warranties, indemnities, or retention amounts to protect you.

Consumer Law And Advertising Practices

When you take over a business, you also inherit its market-facing representations (website claims, ads, product promises, refund processes). If those practices aren’t compliant, you can be starting your ownership journey with avoidable legal risk.

Ask for:

• refund and returns policy currently in use
• warranty or guarantee wording on marketing materials
• standard customer terms and conditions

In Australia, the Australian Consumer Law (ACL) sets out non-excludable consumer guarantees and rules about misleading or deceptive conduct. If the business is making blanket statements like “no refunds” or “warranty is only 12 months” (when the product should reasonably last longer), you may need to update those materials quickly. It’s also worth having a properly drafted misleading or deceptive conduct risk lens when reviewing marketing and sales scripts.

Documents You’ll Usually Need Before You Sign (And What They Should Cover)

Once you’ve gathered information from the seller, you need to translate it into a contract structure that protects you.

In most Australian business purchases, the central document is a Business Sale Agreement. Depending on the deal, you may also need a lease assignment, IP assignments, restraint clauses, and settlement documents.

Business Sale Agreement (And Key Clauses To Look For)

Your Business Sale Agreement should clearly set out:

• What you’re buying: a detailed list of assets (and what’s excluded).
• Purchase price and adjustments: including stock valuation, apportionments, and any earn-outs or vendor finance.
• Conditions precedent: for example, landlord consent, finance approval, key contract novations, licence approvals, or acceptable due diligence.
• Warranties: seller promises about ownership, financial accuracy, compliance, and undisclosed liabilities.
• Indemnities: seller responsibility for certain losses if issues arise (for example, pre-completion tax liabilities).
• Restraints: preventing the seller from competing or poaching staff/customers for a period.
• Transition support: handover period, training, introductions to suppliers/customers, and access to systems.
• Completion mechanics: what happens on settlement day and what must be delivered.

If you’re buying a business with complex moving parts (multiple sites, lots of employees, regulated licences, large customer contracts), it’s especially important that the contract reflects the reality of how the business operates.

Heads Of Agreement (Optional, But Common)

Some deals start with a Heads of Agreement (or Letter of Offer) before the full contract. This can be useful to lock in commercial terms while lawyers prepare the detailed documents.

Be careful here: depending on wording, these documents can sometimes be binding (even if you think it’s “just a summary”). Treat it seriously and get it reviewed before signing.

Restraint And Confidentiality Documents

In many purchases, you’ll want confidence that the seller won’t set up across the road and take the customer base you just paid for.

Ask whether the sale includes:

• restraint of trade provisions (non-compete, non-solicitation)
• confidentiality obligations about business information
• clear ownership of customer lists, operating manuals, and internal processes

Restraints need to be carefully drafted to be enforceable (they must be reasonable in scope, time and geography), so this is a key area for legal help.

Company Documents (If It’s A Share Sale)

If you’re buying shares in a company, request a company “due diligence pack” including:

• ASIC company extract and details of issued shares
• constitution and any replaceable rules reliance
• shareholders agreement (if one exists)
• director resolutions and key company registers

If you’re stepping into an ownership structure with other shareholders (or keeping the seller on for a period), you may need a Shareholders Agreement and/or a Company Constitution that matches how decisions will be made going forward.

Settlement Checklist And Handover Items

Even straightforward deals can fall apart at completion if nobody has listed what needs to be handed over.

A practical settlement checklist often includes:

• keys, alarm codes, and security access
• POS logins and software subscriptions
• website hosting/admin access and domain transfers
• supplier account transfers and credit terms applications
• staff communications and transition plan
• handover training dates and scope

This is where a good lawyer can help you connect the operational reality to the legal documents, so the handover is clean and you can keep trading without disruption.

Key Takeaways

• When you’re deciding what to ask for when buying a business, focus on verifying value (financials and contracts) and reducing risk (liabilities, compliance, and clear asset title).
• Request core financial documents like P&Ls, balance sheets, BAS, tax returns, and bank statements, and reconcile them rather than relying on summaries.
• Confirm ownership of key assets and check for security interests, including running relevant PPSR checks where appropriate.
• Review the lease, supplier contracts, customer agreements, and IP carefully, because many relationships don’t automatically transfer on an asset sale.
• Ask direct questions about employees, disputes, licences, and regulatory issues so you can price risk properly and negotiate protections.
• A well-drafted Business Sale Agreement should include clear inclusions/exclusions, conditions precedent, warranties, indemnities, restraints, and practical completion steps.

If you’d like help buying a business (including due diligence and reviewing or drafting your Business Sale Agreement), you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.