Buying or Selling a Business in Victoria

Whether you are buying or selling a restaurant, café, retail shop, clinic, accounting practice or franchise in Victoria, the legal work usually centres on five things: checking what the business really is, preparing or reviewing the contract of sale, dealing with the shop lease, transferring licences and staff, and managing settlement and adjustments. The earlier a lawyer is involved, the more risk can be built into the contract while price and terms are still open, rather than patched up after the deposit is paid.

Key points

Where a small business is sold through an agent or business broker below a set price, the seller must provide the statutory Section 52 statement, or the buyer may be able to avoid the contract.
Victorian business sales commonly use standard contracts published by the Law Institute of Victoria (LIV) or the Real Estate Institute of Victoria (REIV), supplemented by special conditions.
A liquor licence transfer is applied for by the incoming operator with Liquor Control Victoria, and no alcohol may be sold until it is granted.
Buying assets and buying company shares carry very different historical liabilities and tax consequences.
There is no statutory cooling-off period for business sales in Victoria; protection comes mainly from conditions in the contract.

Who this service is for

Individuals and families buying their first business, including recent permanent residents and people on other visas.
Owners selling because of retirement, relocation or a change of direction, and families handing a business to the next generation.
Buyers and sellers of franchises and of medical or professional practices.
Overseas investors acquiring an Australian business through a company or family members.

What we do

For buyers: reviewing the Section 52 statement, financial records and lease, running company, Personal Property Securities Register (PPSR) and litigation searches, and listing the questions the seller must answer.
For sellers: organising contracts, the lease, staff records and licences before listing, working with the accountant on the Section 52 statement, and drafting the contract of sale and special conditions.
For both sides: negotiating the price allocation (goodwill, equipment, stock), conditions, restraint of trade, training period and warranties.
Handling the lease assignment or new lease, the transfer of liquor and other permits, staff transfer documents, settlement, adjustments and post-settlement notifications.

How the process works

Initial consultation: understanding the deal structure, price, timetable and the risks you care most about, and checking whether any letter of intent has been signed or holding deposit paid.
Document review and searches: completed before signing, with issues identified in writing.
Contract negotiation: turning search results into conditions, price adjustments or warranties.
Conditional period: following up landlord consent, finance approval, licence transfer and accounting verification, and extending or ending the contract if needed.
Settlement: counting stock, calculating adjustments, handing over keys and documents, and notifying the ATO, suppliers and relevant authorities.

Key legal issues in the transaction

Buying assets or buying shares

An asset sale transfers only the listed assets and goodwill, and the old company's debts generally stay with the seller; a share sale buys the whole company together with its past tax, employment and contract liabilities, so it calls for deeper investigation and fuller warranties and indemnities. A share sale can keep existing contracts and licences in place and is sometimes simpler, but if the company owns land, Victorian landholder duty must also be considered.

Going concern and GST

If both parties are registered or required to be registered for GST, the seller supplies everything needed to keep operating and carries on the business until the day of settlement, and the parties agree in writing that it is the supply of a going concern, the sale is generally GST-free. If any element fails, the buyer may have to pay an extra tenth, so the clause wording and whether the price is 'plus GST' must be clear.

Licences, permits and staff

Food businesses usually involve council food business registration, footpath trading permits and the use allowed under the planning permit; venues selling alcohol also need a liquor licence transfer, which the incoming operator should apply for at least eight weeks ahead. For staff, the Fair Work Act 2009 has specific rules on service and accrued leave after a transfer of business, and long service leave may also carry over in Victoria; buyers should also check that past wages were paid in full, as intentional underpayment can be a criminal offence from 2025.

Overseas buyers and visas

Buying a business does not itself bring a visa. The former business innovation and investment visas no longer take new applications, so if you plan to rely on the business for an employer-sponsored or other visa for yourself or staff, get immigration advice before signing and consider making visa or sponsorship eligibility a condition of the contract. Foreign persons buying a business less often reach the Foreign Investment Review Board (FIRB) notification thresholds, but deals that include land or longer-term leasehold interests, or sensitive sectors, need to be checked first.

Restraint of trade and handover

Because the buyer is paying for goodwill, it will usually ask the seller not to open a similar business, or approach existing customers and staff, within a set area and period; the seller should make sure the restraint matches where the customers actually come from and keep exceptions for its own future plans. The parties should also agree how many days the seller will stay on to train, what that covers, and how recipes, supplier relationships and online accounts are handed over.

Stock, equipment and settlement adjustments

The contract should attach an equipment list stating which items the seller owns, which are rented or financed, and which are the landlord's fit-out. Stock is usually counted jointly the day before or on settlement, valued at cost with a cap, excluding expired, damaged or unsaleable items. At settlement, rent, outgoings and utilities are apportioned by the day, the security deposit or bank guarantee is replaced, credits are made for staff entitlements, and the lawyers then disburse funds according to the settlement statement.

What to prepare

Sellers: the last two to three years of tax returns, BAS, profit and loss statements, bank statements and POS reports.
The full lease, all variations, the disclosure statement and correspondence with the landlord.
An equipment list (noting any finance or rental), supplier and franchise agreements, trade marks, website and social media account details.
A staff list, employment contracts, payroll records and accrued leave balances.
Copies of all licences and permits; buyers also need identification, finance approval and details of the purchasing company.

Why practical experience matters

A business sale is a legal matter and a commercial judgment. Justin Chua holds a commerce (accounting) degree, has held a real estate agent's licence and run an agency, has owned restaurant and accommodation businesses, has completed courses with the International Business Brokers Association (IBBA) and the Australian Institute of Business Brokers (AIBB), and is an Accredited Family Business Advisor; property and commercial matters are handled by Tan Chua. The firm works in Chinese and English with clients, accountants, brokers and landlords, and arranges remote signing for clients overseas.

Frequently asked questions

When should I involve a lawyer?

Ideally before signing any letter of intent or paying a holding deposit. Even if the agent says a deposit is needed to 'hold' the business, first confirm when it is fully refundable.

If the price is above the Section 52 limit, does the seller still need to provide information?

The statutory statement may not apply, but the buyer can still require equivalent or more detailed financial information and warranties in the contract, with accounting verification as a condition.

What is different about buying or selling a franchise?

Besides the business contract and lease, the franchisor's consent is needed and the Franchising Code of Conduct applies; the buyer receives the franchisor's disclosure document, and transfers usually take longer.

What do settlement adjustments include?

Common items are stock value, prepaid or outstanding rent and outgoings, credits for staff accrued leave, replacement of the security deposit or bank guarantee, and prepaid utilities, as set out in the contract.

I am overseas. Can the sale be completed remotely?

Yes. Contracts and transfer documents can usually be signed remotely, though some may need to be notarised or authenticated locally; licences such as liquor licences require the applicant to meet training and background requirements, so plan early.

Contact us

For help, call 03 9602 3988 or contact us online. We can meet at our Melbourne CBD office or by video. Initial consultations are charged.

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This page is general information only and is not legal advice.