If you own a particular business, there may come a time in your life when you will consider selling it. Chances are, you think about selling all your products and supplies to one company as well as tools and resources to another. However, the whole process can become confusing along the way, especially if you don’t have any idea of what to do. The truth is that there are several ways to sell your business, and one of them is to sell your business as a going concern.
In this article, we’ll cover what the sale of a business as a going concern entails and what factors to consider if you want to pursue this option successfully.
BUSINESS SALE AS A GOING CONCERN EXPLAINED
In a nutshell, it entails selling your business to a particular purchaser with all the aspects of your business necessary to help the purchaser keep the operations going. This means that all your products, services, workforce, tools, and other resources will be sold entirely to the buyer. Furthermore, know that you will be required to keep your business running until the settlement date. Ultimately, the goal is to have all aspects of your business sold while keeping it operational during the transition period.
Tax matters: One important matter to consider when selling your business as a going concern is regarding the taxes involved. Know that this sale option may provide you with a tax exemption, as long as the following criteria are met:
- The payment has been made for the sale of a business.
- The purchaser is registered for GST.
- The vendor and purchaser have agreed in writing.
- The vendor supplies all things necessary for the business operation to continue until the day of sale.
SEVERAL FACTORS TO CONSIDER
Below are three major factors to consider when pursuing this business sale option:
Legal advice:
You will require legal advice to ensure that your SOBA clearly indicates that the sale is a going concern and includes the appropriate GST promises to suffice the tax law. A commercial lawyer can help you prepare your application so that you remain compliant with the law throughout the sale period.
Business continuity:
You must ensure that the business continues to run while still in your possession until the final transfer on the settlement date. Keep in mind that this obligation may be included in your SOBA.
Taxation advice:
You must meet and satisfy the GST requirements before you can take advantage of the tax exemption and other tax concerns also need to be addressed. This is why hiring a commercial lawyer or a tax consultant can help you with important tax matters during the sale period.
CONCLUSION
A business sale as a going concern is an excellent option when you think it is time to sell your business. However, you will need to think critically and make decisions deliberately when pursuing this option. As outlined above, you should receive appropriate legal counsel from a commercial lawyer, continue to run the business, and seek taxation advice from a tax professional.
If you’re looking for commercial lawyers in Brisbane to provide legal solutions or services for commercial and property needs, then reach out to us at GLG legal now!
