Step 1: Should I sell my business?
Selling your business will change your life so it's important to consider the options and implications before you decide to sell. Whatever your reasons for selling, ensure you're making the right decision by asking yourself the following:
- Am I really ready to sell, or do I just need a break?
- Have I considered other options, such as bringing in outside management?
- Why am I selling? Buyers will want to know the answer to this question so prepare a truthful answer that will not jeopardise the success of the sale.
- Will my family and friends support my decision to sell?
- Is the timing right? Could the market and sale price be better if I waited? As a general rule, the best time to sell is when the business and your sales are peaking and the industry is likely to attract great interest.
- Will the sale benefit me financially?
- Will I be restricted from trading in my profession once the business is sold? This is a common clause in contracts for the sale of a business.
You should also seek professional advice. Talk with a business or financial advisor, accountant, and lawyer to make sure you achieve the best possible outcome from your decision.
Think about your staff
You also need to consider your employees. How will they be affected by the sale of your business? If you decide to sell you should inform employees and address their concerns.
It's important to note that whoever buys your business
is not obliged to employ your former employees. When the business is sold you may have obligations to pay entitlements which could include severance pay and leave entitlements.
For more information about your responsibilities to employees when you sell your business visit the:
What are the tax implications if you sell your business?
There are many tax issues to consider when selling your business which include:
- goods and services tax;
- capital gains tax;
- private expenses;
- finalising employee/independent contract or obligations;
- record keeping obligations;
- lodging final income tax returns; and
- cancelling registrations. Read more.
Do I have obligations under my lease if I sell the business?
If you operate your business from leased commercial premises. your obligations under the lease do not automatically transfer to the new owner upon sale of the business. You will still be legally liable for the rent and all other obligations under the lease unless you arrange to have the lease assigned (transferred from one tenant to another) to the new owner of your business who will then become the new tenant.
Refer to your lease to ensure you are permitted to assign the lease and understand the process required for the assignment. Generally, leases will require the tenant to request the assignment of the lease in writing.
Tenants with retail leases covered by the Act have the right to assign the lease subject to the right of the landlord to withhold consent on reasonable grounds.Source: www.smallbusiness.wa.gov.au
Category: Personal Finance