Australia guides

How to sell a business in Australia

Selling a business in Australia generally moves through preparation, valuation, a confidential listing, buyer qualification, a heads of agreement, due diligence, a contract of sale and settlement. Some details — the type of sales authority a broker uses, and whether any cooling-off period applies — vary by state. Tax outcomes depend on whether the sale qualifies as a GST-free "going concern" and whether you meet the conditions for small business CGT concessions, both of which depend on your specific facts.

By the bizflip team · Published 29 August 2026 · Facts checked 29 August 2026 · Sources listed below

Selling a business in Australia usually moves through the same broad stages, whether you sell privately, through a broker, or by listing on a marketplace: preparation, valuation, a (usually anonymised) listing, buyer qualification and a confidentiality agreement, a non-binding heads of agreement, due diligence, a binding contract of sale, and settlement. Some details — the type of sales authority a broker asks you to sign, and whether any cooling-off period applies — depend on which state or territory you're in. Tax outcomes depend on whether the sale qualifies as a GST-free "going concern" and whether you meet the conditions for small business CGT concessions; both turn on your specific facts, so check with your accountant and solicitor before you sign anything.

The process, step by step

There is no single legal template for selling a business the way there is for a residential property purchase. In practice, most sales follow this sequence:

• Prepare the business — financials, contracts and records in order
• Get an independent valuation to ground the asking price
• List the business, usually anonymised at first
• Qualify buyers and have them sign a confidentiality agreement (NDA)
• Negotiate and sign a heads of agreement (a non-binding term sheet)
• Buyer conducts due diligence
• Sign a binding contract of sale
• Settle — transfer assets, licences, leases and (if applicable) staff

Preparation and valuation

Buyers and their advisers will ask for at least two to three years of financial statements, tax returns, supplier and customer contracts, lease terms, and employee records. Resolving outstanding legal or compliance issues before you go to market avoids them surfacing during due diligence, when they carry more weight in price negotiations. You'll also need to decide, with advice, whether you're selling the business's assets (the more common structure for SMEs) or selling shares in the company that owns it — this changes both the legal risk each side carries and the tax treatment.

An independent valuation gives you a defensible starting point for price. Common approaches include an earnings multiple (applied to EBITDA or owner-adjusted earnings) and an asset-based valuation; which is more appropriate depends on the business model. A buyer will form their own view during due diligence regardless, so a valuation is a negotiating anchor, not a guaranteed sale price.

Listing, confidentiality and buyer qualification

Most business-for-sale listings are anonymised: the trading name, exact address and detailed financials are withheld until a prospective buyer signs a non-disclosure agreement (NDA). This protects the seller from unsettling staff, customers, landlords, suppliers or competitors while a sale is still uncertain. A confidentiality agreement before sensitive financials are shared is standard practice in a legitimate sale process. Sellers and brokers typically also ask buyers to show proof of funds or finance capacity before releasing identifying detail, to filter out unqualified enquiries.

Engaging a broker: sales authorities and state rules

If you use a business broker or agent, each state licenses them separately and requires a written sales (agency) authority before they can act for you or earn commission. The type of authority, and how long it runs, varies by state:

Keep this separate from the sale contract itself: a cooling-off right on the agency agreement (the contract with your broker) is not the same as a cooling-off right on the contract of sale (the contract with the buyer). Business sale contracts in Australia generally do not carry a statutory cooling-off period — unlike some residential property purchases — so any right to withdraw after signing has to be negotiated and written into the contract as a special condition; it doesn't exist by default.

Heads of agreement and due diligence

Once a buyer is qualified and interested, the commercial terms are usually captured first in a heads of agreement (also called a term sheet) — price, structure (asset or share sale), deposit, any exclusivity period, key conditions, and a target settlement date. This document is typically mostly non-binding, aside from clauses like confidentiality and exclusivity. It sets expectations while the buyer completes due diligence: reviewing financial records, contracts, leases, licences, employee arrangements and any litigation or compliance history, usually with their own accountant and solicitor.

Contract of sale and settlement

If due diligence doesn't raise dealbreakers, the parties move to a binding contract of sale, prepared by solicitors. It typically sets out: exactly which assets and liabilities are included; the price and payment structure; the deposit (often around 10%, but negotiable); conditions precedent such as landlord consent to assign the lease, finance approval, or transfer of a required licence; warranties from the seller; and any restraint-of-trade clause limiting the seller from competing nearby afterward.

• Licence and registration transfers can take time to process — plan for this early, since some can take months
• Employee entitlements and transfer obligations depend on Fair Work rules and whether employment is offered on similar terms
• You remain responsible for lease and other contractual obligations until settlement actually happens, not just until you sign
• Notify the ATO and relevant regulators once the sale settles

Tax: GST and small business CGT concessions

GST: a business sale can be GST-free if it qualifies as the "supply of a going concern" under section 38-325 of the GST Act. Broadly, this needs: both buyer and seller registered (or required to be registered) for GST; a written agreement between the parties that the sale is of a going concern; the seller supplying everything necessary for the buyer to continue operating the business; and the seller actually carrying on the business up until the day of the sale. If any of these isn't met, the exemption can fail and GST may apply — get this assessed and documented before settlement, not after.

CGT: selling a business assets usually triggers a capital gain or loss, which is reported in your tax return. If your business meets the basic conditions — broadly, aggregated turnover under $2 million, or net assets under $6 million, plus an active asset test — you may be able to reduce or disregard some of that gain under the ATO's small business CGT concessions. There are four: the 15-year exemption (the full gain is exempt if you've owned the asset at least 15 years and other conditions are met), the 50% active asset reduction, the retirement exemption (up to a $500,000 lifetime limit, with a superannuation contribution requirement if you're under 55), and a rollover that lets you defer the gain for up to two years. Eligibility rules are detailed and interact with how the sale is structured (asset sale vs share sale), so this is one to work through with your accountant before you set a price, not after settlement. Note: from 1 July 2027, legislated reform raises the turnover threshold for the 50% active asset reduction specifically to $10 million aggregated turnover — the $2M/$6M figures above remain current for now and still apply to the other three concessions.

Getting help

A solicitor to prepare and review the contract of sale, and an accountant or tax adviser to work through the GST and CGT position, are the two professionals worth engaging early rather than after an offer arrives. If you use a broker, read the sales authority carefully before signing — it sets their fee, the term, and what happens if you sell privately during that term. Listing a business for sale on bizflip is free.

Sources

Every load-bearing claim in this guide, and where it comes from:

• A sale can be GST-free as a 'supply of a going concern' under s38-325, requiring both parties GST-registered, a written agreement it's a going concern, transfer of everything needed to continue the business, and the seller carrying on the business until the day of sale. — Australian Taxation Office
• Basic conditions for small business CGT concessions include a CGT small business entity turnover test and a maximum net asset value test, plus the active asset test. — Australian Taxation Office
• The four small business CGT concessions are the 15-year exemption, the 50% active asset reduction, the retirement exemption (lifetime limit of $500,000), and the small business rollover (defer up to two years). — Grant Thornton Australia
• A one-business-day cooling-off period applies under section 59 of the Property and Stock Agents Act 2002 to agency agreements for the sale of residential or rural property in NSW. — NSW Government
• Text of section 59 (cooling-off period for residential or rural agency agreements) of the NSW Property and Stock Agents Act 2002. — AustLII
• Business agents and estate agents in Victoria are licensed and regulated by Consumer Affairs Victoria, including rules on sale authorities and commission. — Consumer Affairs Victoria
• Steps for completing a business sale in Queensland: letter of intent/heads of agreement, due diligence, purchase agreement, licence transfers, notifying the ATO and councils, and settlement/handover. — Business Queensland
• General guidance on the steps and obligations involved in selling a business in Australia, including licence transfers and notifying relevant parties. — business.gov.au (Australian Government)

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