Procedural Roadmap for Business Acquisition (Post Verbal Offer)

Following the acceptance of your verbal offer, the procedural milestones required to advance an acquisition from a preliminary agreement to final settlement.

Asset Sale Structure

Following the acceptance of your verbal offer, we have outlined the procedural milestones required to advance this acquisition from a preliminary agreement to final settlement. Because this transaction is structured as an Asset Sale, you are purchasing the specific assets of the business — goodwill, equipment, intellectual property, and leasehold rights — rather than taking over the vendor’s existing corporate entity. This structure limits your exposure to the seller’s past liabilities but requires specific administrative steps to transition the business to your control.

1. 1Phase 1 — Securing the Transaction
2. 2Phase 2 — Investigation & Due Diligence
3. 3Phase 3 — Legal Structuring & Approvals
4. 4Phase 4 — Finalization & Handover
5. 5Phase 5 — Post-Settlement Transition

Phase 1 — Securing the Transaction

Step 1: Letter of Intent & Exclusivity Deposit

The Letter of Intent (LOI), or Heads of Agreement, serves as the foundational framework for the legal contracts that will follow. This is the first formal step that takes the business off the open market and grants you protected time to conduct your investigations.

The Procedure

Our office will draft the LOI capturing the agreed-upon terms from your verbal offer — including the purchase price, settlement date, training period, and key conditions such as finance approval, lease assignment, and due diligence rights.

Execution & Deposit

Upon your review and signature, an initial refundable deposit is to be paid into our brokerage trust account — typically 10% of the purchase price. This deposit is held securely until settlement or the release of conditions.

Outcome

The receipt of the signed LOI and cleared deposit officially takes the business off the open market, granting you a period of exclusivity to conduct your investigations without the threat of competing offers.

Step 2: Establishment of the Purchasing Entity

Because you are not acquiring the vendor’s company, you must create a new legal "vessel" to purchase and hold the business assets, employ the staff, and enter into the commercial lease. This step must be completed immediately after the LOI is signed.

Instruct Your Accountant

You must immediately instruct your accountant (or lawyer) to establish a highly structured, tax-effective purchasing entity — typically a Pty Ltd company, often acting as trustee for a Family or Unit Trust. The structure chosen will have long-term tax and asset protection implications.

Provide Required Details

You must supply our office with your new entity’s exact Legal Name, Australian Company Number (ACN), and Australian Business Number (ABN) as soon as they are registered with ASIC.

Phase 2 — Investigation & Observation

Step 3: Formal Due Diligence

With exclusivity secured, the vendor will open their books for a comprehensive review. This is your opportunity to verify every claim made in the initial prospectus and assess the true commercial health of the business.

Financial Review

You and your accountant will be granted access to verify the financial performance of the business. This includes analyzing formal tax returns, BAS statements, Profit & Loss reports, and point-of-sale data to confirm the earnings represented in the initial prospectus.

Commercial Review

You will systematically review all operational agreements essential to running the business — including supplier and vendor contracts, existing equipment leases, intellectual property registrations, and client databases.

Employee Assessment

In an Asset Sale, employees are technically terminated by the vendor and re-hired by your new entity. You will review current employee contracts, wage rates, and accrued entitlements such as annual and long service leave — all mathematically adjusted in your favor at settlement.

Phase 3 — Legal Structuring & Approvals

Step 4: Legal Representation & Contract Negotiation

As Due Diligence progresses, the formal legal documentation is prepared and negotiated in parallel. You must appoint a qualified commercial solicitor to represent your interests throughout this process.

Step 5: Landlord Approval & Lease Assignment

This transaction is strictly conditional upon the landlord approving your new entity as the incoming tenant. Without this approval, the acquisition cannot proceed to settlement. Begin this process as early as possible, as landlord response times can vary significantly.

Guarantees & Security Requirements

Be prepared to provide the following as a condition of lease assignment approval:

• Personal Guarantee — signed as the director of your new purchasing entity, making you personally liable for lease obligations.
• Security Bond — commonly a bank guarantee equivalent to 3 months’ rent, held by the landlord as security against default.

These are standard requirements and should be anticipated from the outset of your planning.

Phase 4 — Finalization

Step 6: Settlement, Closing & Handover

Once all conditions — Due Diligence, Finance Approval, and Lease Assignment — are formally satisfied, the transaction moves to execution. This is the final phase where ownership is officially transferred to you.

Execution

Both parties sign the final, binding Business Sale Agreement. All conditions are formally waived or satisfied in writing before this step is completed.

Stocktake

If the sale includes trading stock, an independent stocktake is conducted — usually the night before or the morning of settlement — to determine the final, exact dollar value of inventory to be included in the purchase price.

Funds Transfer

The balance of the purchase price, adjusted for the final stock value and employee leave entitlements, is transferred from your financier or solicitor to the vendor’s solicitor’s (or broker’s) trust account.

Handover

Once funds clear, settlement is declared. Keys, alarm codes, and digital admin rights are officially handed over. You assume total operational and financial control of the business from this moment forward.

Phase 5 — Post-Settlement Transition

Step 7: Vendor Training & Handover

Following successful settlement, this phase allows you to physically step into the business with the vendor’s guidance to ensure a smooth handover. No document review can replace the insight gained from working directly alongside the vendor on-site.

The Procedure: You will work directly alongside the vendor on-site to verify the day-to-day operations, culture, and workflow. This hands-on period is your opportunity to understand the rhythm of the business, meet key staff, and master operational dependencies as you take control.

Training Duration by Business Type

Smaller Enterprises

2 to 4 weeks — retail, hospitality, or service businesses with straightforward operations and a small team.

Larger Operations

1 to 3 months — industrial or commercial operations with extensive personnel, complex workflows, or specialized equipment.

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