Page 21 - SEll Your Business Booklet

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STEP 7. Sale and Purchase Agreement STEP 8. Due Diligence Sale and Purchase

Negotiating the sale The buyer double-checks

of your business your information

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Signing the Agreement doesn’t mean
the business is sold. The buyer will want to Due Diligence
verify the information supplied and review
any details not previously available due to
commercial sensitivity.

The length of time a buyer What a buyer may want to review:
requests for the due diligence
process to be completed will often DUE DILIGENCE FINANCIAL
depend on the complexity of the
business. A buyer can terminate • Products and supply lists • P&L accounts for 2-3 years
an agreement for a number of • Customer lists • Monthly sales figures
reasons during this process, but • Supplier lists • Year-to-date sales figures
they are less likely to do so if your
IM is explicit and accurate. • Plant and equipment lists • GST returns
• Plant or equipment leases • Aged debtors and creditors
• Computer programs • Staffing and payroll
TIP The time • Building leases • Stock values and quantities
allowed for the due • Supply agreements • Work-in-progress estimates
diligence process will be • Distribution agreements • Any new product development
detailed in the Sale and • Franchise or agency • Budgets and forecasts
Purchase Agreement agreements
and is normally 5 to 15 • Copyright or licence
working days. agreements
• Local authority consents/
zoning approvals
• Any pending legal actions
• Employment agreements
• Staff schedules/roster
• Insurance policies and claims
history

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