Information You Need When Selling

Information Required To Sell A Business

Information You Need When Selling


This information is essential in order to present sell a business to prospective buyers, we request that you supply this information as a matter of urgency.

Here is a look at the documents you need when selling a business and what the all mean with examples of these for you to download and view.

Lease Agreement

A retail lease is a type of commercial lease relating to retail premises. Retail leases are governed by the Retail Leases Act 2003 (Vic) (“the Act”), although there are some exceptions.

What Are Retails Premises?

Retail premises are defined under the Act as business premises wholly or predominantly used for selling, hiring or providing goods or services to the public. Business premises that are used primarily for wholesaling, manufacturing or storage are not retail premises and are not covered by the Act.

Some Examples Of Retail Premises

Some examples are: retail shops for the sale of merchandise; bars, cafes and restaurants; petrol stations, car showrooms and car rental outlets; gymnasiums and fitness centres; equipment hire shops; post offices and banks; hotels and bed and breakfasts; hairdressers and beauty salons; medical and counselling suites; accounting and law firms; and architects and surveyors offices.

Disclosure Statement

The Act requires the landlord to furnish a document known as the disclosure statement to the tenant. The disclosure statement broadly describes the key features of the lease. The intention is to let the parties be aware at the outset of what is expected of them under the lease.

Section 52

Or otherwise known as ‘The Vendor Statement’ The seller (or an estate agent acting for the seller) of a business or part of a business being sold for $350,000 or less (excluding stock), must provide a prospective purchaser with a Vendor’s Statement (available from Consumer Affairs Victoria), under the Estate Agents Act 1980 – Section 52 (also known as a Section 52 Statement). Review the Statement carefully on key points such as profits, expenses and stock.

Profit & Loss

The profit and loss statement is a summary of the financial performance of a business over time (monthly, quarterly or annually is most common). It reflects the past performance of the business and is the report most often used by small business owners to track how their business is performing. As the name indicates the profit and loss statement (also known as a statement of financial performance or an income statement) measures the profit or loss of a business over a specified period. A profit and loss statement summarises the income for a period and subtracts the expenses incurred for the same period to calculate the profit or loss for the business.

Balance Sheet

The balance sheet provides a good picture of the financial health of a business and is a tool used to evaluate a business’s liquidity. It helps a small business owner identify trends and quickly grasp the financial strength and capabilities of their business. The balance sheet is the financial statement used to report on the financial position of the business to the owner and other stakeholders such as banks and investors. The balance sheet is a statement of what a business owns (assets) and owes (liabilities), and the value of the owner’s equity (or net worth of the business) at a specific point in time. The balance sheet is also known as a statement of financial position because it shows a summary of the business’s financial position at a particular point in time. The difference between the assets and liabilities is known as owner’s equity. The balance sheet is so named because the equity must equal assets minus liabilities.

Plant & Equipment

The register is a list of all assets detailing purchase price and current value taking into account any accumulated depreciation. A property, plant and equipment register should include: Purchase date – Purchase price – A short description of the asset – The location of the asset – The insurance value Details of the calculation of depreciation and accumulated depreciation.

  • It is also appropriate to group similar assets in the same place in the register e.g. office equipment can all be included under the same heading whereas equipment located in the church worship area should be included under another heading. Structuring the register tin this way will help when it is being reviewed to ensure all items included in it are still held.

 

Franchise Agreement

(if applicable) – A Franchise Agreement is a legal, binding contract between a franchisor and franchisee. A franchise agreement contents can vary in content depending upon the franchise system, the state jurisdiction of the franchisor, franchisee, and arbitrator.

Permits

Examples of common business licenses and permits include:

  • Liquor license
  • Motor dealers license
  • Building contractor’s license
  • Real estate agents license
  • Travel agents license
  • Council Permits

Absolute Business Brokers engages in transactions that require the utmost level of confidentiality, similar to the relationships of Lawyers and Accountants with their clients. We will not discuss any confidential details concerning our agreement to sell your business over the telephone, nor will we give confidential information to potential buyers until they have signed a confidentiality and nondisclosure agreement to sell your business.

 

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