Agreeing on a price is only the start of selling or buying a business. The business name, the lease, licences, staff, tax registrations and everyday accounts all need to change hands properly. Missing a step can delay settlement or leave the seller responsible for things they no longer control.
This guide walks through the main steps to transfer a business in Queensland, from both sides of the sale. It’s a general guide only. Your solicitor and accountant should advise on your particular sale.
The main steps in a business transfer
- Agree on price and terms. The buyer makes an offer, and the parties agree on the price, what’s included (equipment, stock, the business name, the website and so on) and any conditions.
- Sign a contract of sale. A written contract, usually prepared or reviewed by each party’s solicitor, sets out the price, the settlement date, conditions such as finance and lease approval, and how stock will be appraised.
- Due diligence. The buyer checks the financials, the lease, licences, staff arrangements and anything else the purchase depends on.
- Lease assignment and licences. The landlord’s consent and any licence approvals are organised. These steps often take the longest, so start early.
- Settlement. The balance is paid, stock is counted and appraised, and ownership passes to the buyer.
- Handover. The seller introduces the buyer to staff, suppliers and key customers, and provides any training agreed in the contract.
How to transfer a business name
If the buyer will keep trading under the existing name, the business name needs to be transferred through ASIC:
- The seller starts the transfer. The current owner applies to transfer the name on ASIC Connect, and ASIC issues a transfer number.
- The seller gives the transfer number to the buyer. The buyer uses it to register the business name on ASIC Connect under their own ABN.
- Don’t leave it too long. The transfer number is valid for 4 months and 28 days from when the transfer application was lodged. After that, the name becomes available for anyone to register.
- The registration period starts again. The seller’s remaining registration isn’t carried over or refunded. The buyer chooses a new 1-year or 3-year registration when they register the name, and ASIC cancels the seller’s registration within 28 days.
The ABN doesn’t transfer. An ABN belongs to the owner (the person, partnership, trust or company), not to the business, so the buyer needs their own ABN. If the buyer is buying the shares in a company rather than the business itself, the business name stays with the company and no transfer is needed.
Transferring the lease
For most businesses, the lease is one of the most important parts of the sale, and the landlord must consent to the lease being assigned to the buyer.
Many shop leases in Queensland are covered by the Retail Shop Leases Act 1994. Under that Act:
- The landlord can’t unreasonably withhold consent to an assignment, but can ask for reasonable information such as the buyer’s financial position and business experience.
- The seller must give the buyer an assignor disclosure statement and a copy of the lease, so the buyer understands the rent, outgoings and obligations they are taking on.
- The landlord also gives the buyer a lessor disclosure statement setting out the key lease details.
Sellers should also check whether they stay liable under the lease after the assignment. This depends on the lease and on whether the Act’s process is followed, so get your solicitor’s advice before you sign.
Licences and permits
Many licences and permits don’t transfer automatically with the business:
- Food businesses. Food business licences are issued by local councils. Councils such as Ipswich City Council state that a food business licence doesn’t transfer to a new owner, so the buyer applies for their own licence, and the premises may need an inspection before trading. Check the process with the relevant council (for example Sunshine Coast Council, Noosa Council or Redland City Council) well before settlement.
- Liquor licences. A liquor licence transfer needs approval from the Queensland Office of Liquor and Gaming Regulation.
- Personal licences. Occupational licences held by an individual belong to that person, not to the business, so the buyer or their staff will need their own.
GST and selling a business as a going concern
The sale of a business can be GST-free if it qualifies as a “sale of a going concern”. Under the ATO’s rules, this generally requires that:
- the buyer is registered (or required to be registered) for GST,
- the buyer and seller agree in writing that the sale is of a going concern,
- the seller supplies everything necessary for the business to keep operating, and
- the seller keeps running the business until the day of settlement.
If the sale doesn’t qualify, GST may apply to the price. Talk to your accountant before you sign the contract.
Seller’s checklist after settlement
- Cancel your GST registration and lodge your final business activity statement (BAS).
- Cancel your ABN if you’re no longer running any business.
- Lodge your final tax return, and ask your accountant whether capital gains tax applies and whether any small business CGT concessions are available to you.
- Pay out final wages, super and staff entitlements, or transfer them to the buyer as agreed in the contract.
- Pay any outstanding bills, and close or transfer utilities, phone lines, insurance and supplier accounts.
- Hand over everything the buyer has paid for: the website and domain name, social media accounts, phone numbers, customer and supplier records, passwords and equipment manuals.
Buyer’s checklist
- Have your ABN in place, and register for GST if required.
- Register the business name using the seller’s transfer number.
- Arrange insurance to start from the settlement date.
- Set up bank accounts, payment terminals and utilities in your name.
- Have your licences approved before you start trading.
- Put employment agreements in place for staff who are staying on.
- Contact suppliers to set up accounts in your name.
How a business broker helps
A business transfer has a lot of moving parts. At Verified Businesses, our brokers manage the sale from the first offer through to settlement, working alongside your solicitor and accountant so the lease, licences and handover are organised on time. Read how we appraise a business for sale and our guide to the P&L and balance sheet, or see our 15 steps for a successful business sale.
Frequently asked questions
How long does it take to transfer a business?
It varies with each sale. Lease assignment and licence approvals often take the longest, so start them as early as possible. Your broker will give you a realistic timeframe for your sale.
Can I transfer my business name to the new owner?
Yes. You start the transfer on ASIC Connect, ASIC gives you a transfer number, and the buyer uses that number to register the name under their own ABN.
Do I need a solicitor to sell my business?
We strongly recommend it. Both buyer and seller should have their own solicitor review the contract and the lease, and an accountant advise on GST and tax.
Thinking of buying or selling? Speak with our brokers today – Craig Campbell on 0419 747 709 or Brett Barton on 0408 607 344, or book a free business appraisal.
Disclaimer: Verified Businesses is a business brokerage and does not provide accounting, taxation or legal advice. The above information is general in nature and should not be relied upon as professional advice specific to your circumstances. We recommend seeking independent advice from a suitably qualified accountant, tax adviser or solicitor before making any business or financial decisions.