Why You Need A Commercial Lawyer If You Are Selling A Business

Why You Need A Commercial Lawyer If You Are Selling A Business

If you are selling a business the complexities of transaction and the legalities that have to be observed means that it almost certainly going to be essential that you have the experts at Commercial Lawyers Perth to advise on the sale to ensure it completes correctly. The last thing you need is to try and save the cost of a lawyer only to find out you are even more out of pocket because the sale was not conducted properly and falls through.

A commercial lawyer is the person who will handle what some refer to as ‘dotting the ‘i’s and crossing the ‘t’s’ although that unfairly underplays the importance of the role that they have. In effect, they will ensure that everything within the sale agreement is complete, accurate, and most importantly valid in terms of the sale proceeding.

Perhaps the most crucial benefit that they provide you is to eradicate and sort any errors which exist within any sale agreements that have been made between the two parties but not yet audited by a lawyer. They will also fix any problems that they find in the agreement of the type outlined below.

Important Details Omitted

Even the most seemingly simple of business sales need to have certain important details included in the final sale agreement. If any of these are omitted, even if unwittingly,  it can cause delays, invalidate the sale, or it could lead to future litigation due to a crucial piece of information being missing.

Details such as the financial aspects of the sale including the agreed value of inventory and equipment, for example, have to be included. Details of what actual inventory and equipment exist needs to be in there too. If it is not it leaves open the potential for the person selling to claim they were not part of the sale when the buyer believed they were.

Financial Clauses Not Complete

Obviously, the financial details of the business being sold are a core element of the transaction, and therefore it is vital that everything which is relevant to the business’s finances and the sale is included.

The sale agreement also needs to have any financial clauses that exist as part of the transaction such as whether the terms of the sale are for payment in full or an upfront payment followed by the balance being paid in instalments. Another example is where the seller is allowed to retain some shares in the company as part of the deal.

Transfer Of Leases Not Arranged

Where a business rents the premises that it operates from, it must be stated within the sale agreement what the arrangements are for the lease of those premises to continue. If the lease agreement is a contract in which the business as an entity is part to then there should not really be any issues.

However, where the problems begin is when it was the business owner who personally entered into a lease agreement with the landlord. Even though they might be selling the business, without a clause that releases them from their contractual obligations to the landlord, including rent payments, they are still legally liable for them.

Commercial lawyers will be able to ensure that any lease agreement is legally transferred, which will obviously involve them communicating with the landlord, and arranging for a new lease to be produced for the new owners.