Buying a Business in Victoria: A Complete Legal Guide

The purchaser roadmap

1. Prepare. Identify the buyer, advisers, funding, strategic objective and non-negotiable assets, people, premises and approvals.
2. Protect information. Put an appropriate unilateral or mutual confidentiality agreement in place before sensitive material is exchanged.
3. Set the framework. Negotiate Heads of Agreement covering structure, price mechanics, diligence, conditions, employees, tax assumptions and timing.
4. Investigate. Scope legal, financial, tax, operational, technology and regulatory due diligence to the price and risk.
5. Document risk. Negotiate the sale agreement, disclosure, conditions precedent, warranties, indemnities and any retention or escrow.
6. Satisfy conditions. Obtain finance, landlord, counterparty, regulatory, franchise, licence and foreign-investment steps before completion where required.
7. Settle securely. Exchange executed documents and verified funds against an agreed checklist and release mechanics.
8. Integrate. Complete registrations, adjustments, employee onboarding, technology access, notices and post-completion claims management.

Asset sale or share sale?

In an asset sale, the buyer acquires the assets and rights identified in the agreement and assumes the liabilities it agrees to assume. This can allow the buyer to leave unwanted assets and contractual liabilities behind. It does not mean every historical or statutory exposure remains with the seller. Employee transfer rules, revenue liabilities, product and environmental obligations, privacy duties, successor risks and regulatory laws can produce consequences regardless of the parties' allocation.

Assets must be validly transferred. Benefits under a contract may be assignable, but its burdens ordinarily require a novation or another arrangement with the counterparty. Leases, regulated licences, customer relationships, data and employees each require separate work.

In a share sale, the purchaser acquires the shares. The company remains the owner of its assets, the employer and the contracting party. The buyer therefore obtains control of a company carrying its history, liabilities, tax attributes and contingent exposures. Change-of-control clauses, regulatory approvals, shareholder and director loans, banking mandates, guarantees, shareholder arrangements and governance changes still need review.

Neither structure has a universal tax advantage. CGT discounts and small-business CGT concessions depend on the taxpayer, asset, structure and statutory conditions; companies cannot use the general 50% CGT discount. An asset transaction can produce different tax outcomes for goodwill, depreciating assets, trading stock and other assets. The buyer and seller may have competing allocation preferences. The accountant should model the options, with the legal documents matching the agreed treatment.

Read our detailed comparison of an asset sale and share sale in Australia. The immediate purchaser action is to compare both structures before fixing the price, not accept a structure merely because it appears in the seller's draft.

Purchasing entity, finance and governance

Decide whether the purchaser will be an individual, company, trust or partnership with coordinated legal, accounting and finance advice. Consider funding, guarantees, asset protection, tax, future investors and exit. In a share acquisition, using the target's funds or assets to support the acquisition can engage s 260A of the Corporations Act 2001(Cth). Financial assistance must satisfy the no-material-prejudice test, receive the approvals required by s 260B, or fall within an exemption in s 260C. Do not assume post-completion control cures a pre-completion issue.

Confidentiality and Heads of Agreement

Confidentiality agreement

An NDA may be unilateral where only the seller discloses information, or mutual where both sides exchange sensitive material. It should define permitted use and recipients, data-room controls, contact restrictions, announcements, no-solicitation terms where appropriate, legal compulsion, duration and return or destruction. Personal obligations for principals can be appropriate where an individual will receive or control information, but they are not required in every transaction simply because a party is a company.

Heads of Agreement

Heads of Agreement should identify the parties and target; asset or share structure; price, deposit and adjustment method; stock and debtors; funding; due diligence; regulatory, ACCC, landlord and counterparty approvals; employee treatment; GST and other tax assumptions; confidentiality, exclusivity and costs; restraints; timetable; and governing law.

Labelling a document “subject to contract” or “non-binding” is important but not always conclusive. Its words and the parties' conduct determine whether obligations arise. Specify which provisions are binding and which are not. A deposit should have clear holding, release and refund rules. See the specialist guide to Heads of Agreement and letters of intent.

Pre-signing ACCC merger-control screen

Australia's merger-control regime has been mandatory and suspensory since 1 January 2026. An acquisition meeting a prescribed threshold must be notified to the Australian Competition and Consumer Commission and cannot complete unless the ACCC approves it or grants a waiver. The general tests use Australian revenue and, in one limb, transaction value. Acquisitions made during the previous three years can be aggregated, including serial acquisitions of the same or substitutable goods or services. Exemptions and targeted classes also apply.

The commonly relevant general thresholds include combined Australian revenue of at least $200 million together with target Australian revenue of at least $50 million or transaction value of at least $250 million; and an alternative large-acquirer test using acquirer-group Australian revenue of at least $500 million and target Australian revenue of at least $10 million. The legislative instrument contains definitions, aggregation rules and other classes that must be applied to the actual parties and transaction. Thresholds can be amended.

Below-threshold acquisitions can still contravene competition law. Screen the position before signing, allowing time for analysis, notification and an appropriately drafted condition precedent and long-stop date. Do not wait until the proposed settlement date.

Business purchase due diligence

Due diligence tests the seller's information and identifies what must change in the price, structure, contract or integration plan. Agree scope, materiality, assumptions and exclusions at the outset. A staged review may begin with red flags and expand where findings justify it. A data-room checklist does not replace judgement about the business's actual value drivers.

• Corporate and ownership: constituent documents, share and option records, beneficial ownership, related-party dealings, shareholder agreements, loans, guarantees, minutes and authority to sell.
• Financial and tax: source records, management accounts, cash flow, debtors, creditors, working capital, tax compliance, debt-like items, capital expenditure and quality of earnings.
• Contracts and premises: material customers, suppliers, distribution, agency, leases, finance, change-of-control, assignment, termination and unusual liability terms.
• People: employee and contractor status, instruments, pay, leave, long service leave, superannuation, payroll tax, WorkCover, underpayments, sham contracting, disputes and key-person dependence.
• Assets and IP: ownership, condition, finance, PPSR, stock, trade marks, patents, designs, copyright, domain names, software, contractor-created materials and infringement risks.
• Data and technology: privacy notices, consents, customer databases, sensitive information, incidents, backups, cyber controls, cloud and SaaS terms, source code and administrator access.
• Regulatory and risk: licences, permits, complaints, investigations, litigation, planning, environment, safety, insurance and foreign-investment requirements.

The purchaser's immediate action is to turn each material finding into a decision: proceed, seek more evidence, change the price, require remediation, add a condition, warranty or indemnity, retain money, or withdraw. Our specialist business due diligence guide explains the workstreams without turning this roadmap into a data-room manual.

Price and completion mechanics

Enterprise value values the operating business before cash and financial debt. Equity value is the value attributable to owners after the agreed adjustments. A “cash-free, debt-free” headline still requires definitions for cash, debt, debt-like items and surplus or trapped cash.

• Completion accounts adjust the price after completion using actual cash, debt, working capital or net assets at the agreed time.
• Locked box fixes equity value by reference to historical accounts, usually with seller undertakings against leakage and permitted-leakage definitions.
• Earn-out makes part of the price depend on future performance and needs precise metrics, accounting policies, control rules, information rights and dispute machinery.
• Retention or escrow holds part of the price for a defined adjustment, claim or risk, with clear release instructions.

Deal separately with stock, debtors, customer deposits, gift cards, loyalty points, prepaid services, deferred revenue, rebates and obsolete inventory. Specify the stocktake procedure, valuation method and dispute process. Purchase-price allocation should align across the sale agreement, tax filings and accounting records.

No valuation method is inherently right for every business. Earnings, discounted cash flow, net assets or another industry-appropriate method may be used, and tax returns can be relevant evidence without being conclusive. Read our guide to business valuation in Australia and have the accountant lead financial modelling while the lawyer documents the mechanism.

Employees and transfer of business

A share sale does not itself change the employer: the company remains employer and existing employment, instruments, service and accrued entitlements continue. Director, management and reporting changes may follow, but the purchaser cannot treat the share transfer as terminating the workforce.

On an asset sale, the seller and buyer must plan offers, acceptances, terminations, notice, consultation and communications. Part 2-8 of the Fair Work Act 2009 (Cth) creates a transfer of business where employment with the old employer terminates, the employee becomes employed by the new employer within three months, performs the same or substantially the same work, and the statutory connection exists through transferred assets, outsourcing, insourcing or associated entities. A transferring instrument may follow the employee.

Prior service is generally recognised for most National Employment Standards purposes. A non-associated new employer may elect not to recognise service for annual leave and redundancy. Separate provisions address notice and the minimum-employment period for unfair dismissal. Personal and carer's leave, parental leave and flexible-work eligibility are not matters a purchaser can simply exclude with a general notice. An employee who does not accept an offer may or may not be entitled to redundancy depending on the offer, recognition of service and statutory tests. The small-business redundancy exemption and applicable industrial instrument also matter.

Victorian long service leave continuity is separately governed by the Long Service Leave Act 2018 (Vic). The sale agreement can allocate the economic burden through a completion adjustment or indemnity, but cannot contract out of employee rights. Verify employee records, accrued balances, superannuation, payroll tax, WorkCover, underpayments, contractor classification, pending claims, return-to-work obligations and any consultation requirement before offers issue.

Assignment, novation and change of control

An assignment ordinarily transfers a contractual benefit. It does not, without the necessary agreement, release the seller from its obligations or make the buyer bear those obligations. A novation substitutes a party and ordinarily requires agreement among the outgoing party, incoming party and counterparty. A contract may prohibit assignment, require consent, impose conditions or terminate on an asset transfer.

In a share sale the contracting company remains unchanged, but a change-of-control clause may still require notice or consent or give a termination right. Regulatory approval, secrecy, confidentiality, privacy, personal-service or procurement rules can impose separate barriers.

A temporary back-to-back, subcontract or seller-as-agent arrangement can sometimes bridge a delayed consent, but it needs the counterparty's position and the contract's restrictions checked. It is unsuitable where prohibited or where regulated rights cannot be exercised for another. Make irreplaceable contract consents conditions to settlement. See our guide to commercial contracts in Australia.

Retail and commercial lease assignment

First determine whether the Retail Leases Act 2003 (Vic) applies; not every business premises lease is a retail premises lease. An assignment continues the existing lease. A new lease may offer a longer term or different terms, but it is a separate negotiation and can change rent, options, security and obligations.

For a retail lease, the tenant's written request for consent must include the information the landlord reasonably requires about the proposed assignee's financial resources and business experience. The landlord cannot withhold consent except on statutory grounds, including where the proposed use is not permitted, the assignee lacks sufficient resources or experience, or the tenant has not followed the statutory procedure.

Before requesting consent, the outgoing tenant must give the proposed assignee the disclosure statement it received and details of changes. The tenant can ask the landlord for a current disclosure statement. If the landlord does not provide it within 14 days, s 61(5) relieves the tenant of the corresponding s 61(3) obligation and exposes the landlord to the statutory penalty. For an assignment connected with an ongoing business, the tenant must also give the landlord and proposed assignee the disclosure statement prescribed by the Retail Leases Regulations 2023(Vic), including the required business records. The landlord must deal expeditiously and is taken to consent if it does not give written consent or refusal within 28 days after a compliant request. It is not enough to say the landlord simply gives an updated statement directly to the buyer.

Compliance with s 61 can release the assignor and its guarantors from future liability, subject to the statutory conditions. Review arrears, existing defaults, repair and make-good, options, guarantees, bank guarantees, landlord costs and any release or replacement security. Because premises may be essential to trading, consent to an acceptable assignment or a satisfactory new lease should ordinarily be a condition of settlement. See when the Retail Leases Act applies in Victoria.

PPSR, financed equipment and releases

The PPSR is a register of security interests, not ownership. “Personal property” is a statutory concept with exclusions, including land. Search the correct grantor identifiers and any relevant serial-numbered collateral. An AllPAAP registration may cover all present and after-acquired property, but a registration can be defective, discharged, irrelevant or limited by its underlying security agreement. Equipment finance and retention-of-title supply arrangements require particular attention.

The outcome depends on attachment, enforceability, perfection, priority and the taking-free rules in the Personal Property Securities Act 2009 (Cth). A registration does not automatically establish that a financier can repossess every asset described, and it does not mean the seller lacks ownership.

Identify the security interest and affected assets, obtain payout figures and financier undertakings, then agree the appropriate complete discharge, partial release or other release. Some controlled undertakings provide for registration after funds are received. Refresh searches immediately before settlement and verify post-settlement registration. The purchaser may also need its own registrations for vendor finance, leases, bailments or retention-of-title arrangements. Read how the PPSR works and our guide to buying plant and equipment.

GST, going concern and Victorian duty

GST

An asset sale may comprise taxable supplies, GST-free supplies, input-taxed supplies or a mixed supply requiring apportionment. Under s 38-325 of the A New Tax System (Goods and Services Tax) Act 1999 (Cth), a going-concern supply is GST-free only where it is for consideration, the recipient is registered or required to be registered, and the parties agree in writing before the supply that it is a going concern. The supplier must provide everything necessary for continued operation and carry on the enterprise until the day of supply. Registration and a label in the contract are not sufficient by themselves.

A sale of shares is ordinarily an input-taxed financial supply rather than a going-concern supply. The agreement should specify the intended treatment, price allocation and what happens if the ATO takes a different view, including gross-up, indemnity, cooperation and input-tax-credit provisions. Apply ATO Ruling GSTR 2002/5 to the facts with tax advice.

Victorian duty

Victoria abolished general duty on non-land business assets. Motor vehicles remain subject to their own duty regime. Land transfer duty applies where Victorian land is transferred. Landholder duty can apply when a person acquires a relevant interest in a company or unit trust holding Victorian land with an unencumbered value of $1 million or more. Significant-interest thresholds differ by entity type, and aggregation, indirect interests and associated transactions can change the result.

Model duty before signing where land or a landholding entity is involved. Keep detailed land analysis with the specialist guide to buying commercial property in Victoria.

Buying an existing franchised business

The current Franchising Code commenced on 1 April 2025, with additional requirements applying from 1 November 2025. A purchaser should not treat the seller's franchise agreement as an asset that can simply be handed over. Check the Code, the agreement's transfer process and the franchisor's approval.

• obtain the current disclosure document and check the franchise disclosure register;
• identify whether the existing agreement transfers or the buyer must sign a replacement agreement;
• compare remaining term, renewal rights, territory, restraint, supply restrictions and rebates;
• identify transfer, training and onboarding fees, refurbishment and significant capital expenditure;
• check cooling-off or termination rights that apply to the actual transaction; and
• make the business-sale agreement conditional on acceptable franchise documents and approval.

The business-sale timetable and franchise process must work together. Read our guide to the Franchising Code of Conduct.

Privacy, technology, IP, names and licences

Privacy and technology

Use aggregated or de-identified employee and customer information during initial diligence where practicable. Restrict data-room users, permissions, downloads and retention. If the transaction stops, require return or secure destruction. Under the Privacy Act 1988 (Cth), disclosure of personal information during diligence and transfer of a customer database require analysis of purpose, consent, exceptions and the sale structure. Health and other sensitive information needs greater control.

Review marketing consents, privacy notices, complaints, cyber incidents, eligible-data-breach history, backups and security controls. Map software, cloud and SaaS licences; they may prohibit transfer or require a new customer contract. Confirm ownership of source code and contractor-created materials. Settlement should transfer domains, websites and social accounts, deliver administrator credentials and MFA recovery methods securely, and revoke seller access immediately after a verified handover.

Business name and intellectual property

An ASIC-registered business name is not a proprietary trade mark right. The seller applies to transfer the business name and gives the purchaser the ASIC consent-to-transfer number; the purchaser then registers the name to its ABN within the validity period. Separately verify and transfer registered trade marks, patents and designs through the relevant IP Australia process. Copyright requires an effective assignment where it is not already owned, while authors' moral rights require separate treatment and are not assigned like copyright.

Licences and other completion items

Use ABLIS and the responsible regulator to identify each industry licence, permit and approval. Some transfer, some require consent or notification, and others require a fresh application. Include the necessary outcome as a condition where the business cannot lawfully trade without it. Foreign buyers should screen the Foreign Acquisitions and Takeovers Act 1975 (Cth) early because thresholds depend on investor, sector, asset and value, with some sensitive or national-security businesses subject to notification regardless of value.

Also allocate customer deposits, prepaid services, gift cards and loyalty programs; customer and supplier rebates; insurance notifications and run-off cover; vendor finance and guarantees; purchaser PPSR registrations; shareholder and director loans; banking authorities; corporate registers; director and officer changes; planning and environmental issues; payroll tax, WorkCover and statutory registrations.

Sale agreement, disclosure and risk allocation

The business sale agreement should identify exactly what is sold, excluded and assumed; the price and adjustment method; conduct before completion; conditions; termination rights; employee arrangements; tax treatment; restraint; completion deliveries; and post-completion obligations. See the specialist guide to business sale agreements in Victoria.

A representation is a statement that may induce entry into the agreement. A warranty is a contractual promise about a state of affairs. An indemnity allocates specified loss and can have a different measure and claims process; tax indemnities are often separately negotiated. Their legal operation depends on drafting and applicable law.

The seller's disclosure qualifies identified warranties if it meets the agreed disclosure standard. Negotiate caps, baskets, de minimis thresholds, limitation periods, knowledge and materiality qualifiers, conduct of third-party claims and exclusions for matters reflected in the price. Title, authority, fraud and deliberate concealment are often treated differently. Retention or escrow can support recovery where the seller's future solvency is uncertain. Warranties are one protection among several; they are not necessarily the purchaser's primary remedy, and negotiation over a proposed warranty does not itself prove concealment.

Read our guide to representations, warranties and indemnities.

Settlement and post-completion

Settlement is an agreed exchange of verified funds and documents. It commonly uses electronic signatures, secure document exchange and bank transfers, but there is no single mandatory platform for an ordinary business sale. PEXA is relevant only where a connected land transaction or another eligible electronic- conveyancing step is involved; it does not ordinarily conduct a standalone business-sale settlement.

Use a signed completion checklist and settlement statement. Verify payment instructions by speaking to a known contact using a trusted number, particularly after any emailed change. Separate the person who enters payment details from the person who authorises release where possible. Do not rely on reply-email verification for last-minute account changes.

• refresh ASIC, PPSR, insolvency and other agreed searches;
• exchange releases, assignments, novations, lease and franchise documents;
• deliver share transfers, registers, resignations and appointments on a share sale;
• complete the stocktake and agreed price adjustments;
• handover assets, keys, records, credentials and MFA access;
• confirm business-name, IP, licence, domain and insurance steps; and
• record every item left for post-completion and its deadline.

After settlement, finalise completion accounts, working-capital or earn-out processes; register releases and new security interests; onboard employees; update statutory registrations; transfer services and revoke seller access; issue agreed customer and supplier communications; and diary retention, escrow and claim deadlines. A share purchaser should also consider whether a shareholders' agreement is needed; see our guide to shareholders' agreements in Australia.

What to send your lawyer

Provide what is available rather than delaying the first review for a perfect package:

• the draft or signed Heads of Agreement;
• the sale or information memorandum;
• the proposed sale agreement and disclosure material;
• financial material supplied by the seller;
• the premises lease, disclosure statements and correspondence with the landlord;
• the employee schedule and applicable instruments;
• major customer and supplier contracts;
• licence and permit details;
• PPSR search results, equipment finance and asset information;
• the proposed purchasing entity, funding outline and adviser details; and
• the target signing and settlement dates.

Practical buying-a-business checklist

1. Confirm the buyer's objectives, purchasing entity, advisers and funding.
2. Identify the essential assets, people, premises, contracts, licences and approvals.
3. Sign an appropriate NDA before sensitive information is disclosed.
4. Obtain legal and accounting advice before signing Heads of Agreement.
5. Screen ACCC merger control, foreign investment and sector approvals.
6. Agree a staged due diligence scope and materiality threshold.
7. Compare asset and share structures and model tax and duty.
8. Map contract assignment, novation and change-of-control requirements.
9. Start landlord, franchise and licence processes early.
10. Plan employee offers, service recognition, consultation and entitlement adjustments.
11. Search PPSR correctly and agree financier releases before settlement.
12. Document price mechanics, GST, conditions, disclosure, warranties and indemnities.
13. Use verified payment controls and a signed settlement checklist.
14. Complete registrations, technology handover and post-completion adjustments.

Frequently asked questions

Official sources

• Corporations Act 2001 (Cth), including ss 260A–260C
• Fair Work Act 2009 (Cth), Pt 2-8, and Fair Work Ombudsman transfer-of-business guidance
• Long Service Leave Act 2018 (Vic)
• Retail Leases Act 2003 (Vic) and Retail Leases Regulations 2023 (Vic)
• Personal Property Securities Act 2009 (Cth), PPSR — Searching and PPSR — How the PPSR protects buyers and lessees
• A New Tax System (Goods and Services Tax) Act 1999 (Cth), s 38-325, GSTR 2002/5 and ATO going-concern guidance
• Duties Act 2000 (Vic) and State Revenue Office landholder-duty guidance
• ACCC notification thresholds and Competition and Consumer (Notification of Acquisitions) Determination 2025
• Competition and Consumer (Industry Codes—Franchising) Regulations 2024 and ACCC franchising guidance
• OAIC guidance on selling a business and the Privacy Act 1988 (Cth)
• ASIC business-name transfer guidance, IP Australia registers and ABLIS licensing tool
• Australian Government foreign-investment business guidance

How Parke Lawyers can help

Parke Lawyers can assist at distinct stages: review the NDA and Heads of Agreement before signature; review the purchasing entity and structure in coordination with the accountant; scope or stage legal due diligence; negotiate the sale agreement and disclosure; coordinate lease, contract, franchise and licence consents; plan employee transfers; manage settlement; and advise on completion accounts, retentions, escrow and warranty issues after completion.

See our commercial and business law services or contact us before committing to the transaction structure or Heads of Agreement.