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Preparing for the sale of a small business below $350,000
DOES THE ESTATE AGENTS ACT APPLY TO THE SALE OF YOUR BUSINESS?
According to Section 52 of the Estate Agents Act 1980, the vendor of a business or a portion of that business that is being sold for $350,000 or less is required to provide the purchaser with a Vendor’s Statement, which is also known as a Section 52 Statement (the statement).
The statement must provide the purchaser with financial information of the last two operating years, with the financial data of the most recent year not being older than 3 months from the date of the statement’s preparation.
The statement shows the purchaser of the business information such as:
- details about the business, including address, trading hours, if the business premises are owned or leased, and business documents such as licences, permits and registrations;
- adjusted net profit figure, after deducting financing, depreciation, amortisation and personal expenses of the vendor; and
- statement by a certified practicing accountant declaring that the accounting and financial information is in accordance with the vendor’s books and is true and fair.
A solicitor should be appointed to help with the legal requirements of the sale of the business.
We can assist you in preparing the Section 52 Statement as well as determining a fair sale value for your business. To contact us please call Marcello Fratangeli on (03) 9832 8449.