Buying and Selling a Business: Navigating the Legal & Financial Risks - a series of 5 on demand webinars for commercial lawyers

Program 1: Changing Business Structure to Facilitate Business Sale

Getting ready for business sale may require adjusting or changing business structure to help manage risk or improve value. This session looks at the key issues involved with business restructuring when advising a buyer to sell, including:

• Advantages and disadvantages of different business structures and the reasons to change
• Some common business structure transitions:
  • sole trader to partnership
  • partnership to company
  • sole trader to company
• Assessing business structure in terms of:
  • exposure to risk
  • tax considerations
  • transfer duty exposure
  • administration and business operations
• Isolating liabilities rather than cross guarantees
• Case studies

Program 2: Due Diligence Checklists on Business Sales: The Buyer’s Perspective

When it comes to buying a business, clients will turn to their trusted adviser to help guide them through the process. While it can be an exciting time, a failure to properly understand the detail can lead to potential for things to go wrong down the track. This practical session examines the key issues buyers need to navigate, including:

• How are you buying it? – asset sale or share sale
• Key searches and due diligence to consider:
  • PPS issues
  • tax, GST, and Payroll Tax
  • IT issues, including software licences, website, socials, cloud computing etc
  • review of IP ownership
  • leases and freehold
  • review of licenses, leases and consents
  • customer and supplier contracts
• Employee entitlements the buyer must recognise
• Super Guarantee compliance
• Case studies

Program 3: Drafting Business Sale Clauses Addressing Tax and Financial Risk

Getting business sale contracts right present drafting challenges. This session covers some of the key clauses covering tax and financial risk. It includes:

• Drafting financial information and valuation terms – precautionary risk control
• When to use special conditions and conditions precedent
• Allocation of tax liability between buyer and seller
• Allocating financial risk between buyer and seller – bespoke clauses for business type
• Tax liability clauses - sale of assets or purchase of shares in company
• GST clauses – sale of business as a going concern
• Clauses addressing GST free supply and consideration is exclusive of GST
• Case studies: Earn out clauses and tax liability

Program 4: Warranties and Indemnities in Business Sale Contracts

Warranties and indemnities are necessary for both buyer and seller. Getting this right from both perspectives is examined in this session. It includes:

• How far should vendors go with warranties in sale contract?
• Some key warranties:
  • condition of business assets
  • accuracy of financial information
  • compliance and approvals
  • outstanding orders and liabilities
  • employee entitlements
  • tax warranties
• Types of indemnities and their effects
• Limitations on warranties and indemnities
• Indemnities for buyer and third parties
• Indemnity thresholds and liability caps
• Indemnification and insurance
• Limitation periods, warranties and indemnities

Program 5: Evaluating Intellectual Property and Data on Business Acquisition

Intellectual property rights and data management can sometimes be overlooked during a business acquisition. This session looks at managing this risk, including:

• Evaluating seller’s IP documentation – key disclosure schedule issue for IP
• Valuing the IP of acquisition target
• Managing the IP transition – assignment and change of control issues
• Assessing open-source software problems
• Dealing with representations and warranties related to ownership of IP
• Identifying key red flags in IP related agreements
• Data protection and privacy management and control
• Understanding the scope of indemnification and disclaimers by seller on IP issues
• Controlling website and social media IP issues