How Lawyers Assist with Selling or Buying a Business
June 18, 2025
Selling or buying a business can be a complex process involving significant legal, financial, and operational considerations. Engaging a lawyer with experience in selling and buying businesses is crucial to ensure the transaction proceeds smoothly, complies with Australian law, and protects your interests—whether you are a buyer or a seller.
Role of Lawyers in Business Sales and Purchases
Lawyers play a central role in every stage of the business sale or purchase process:
- Due Diligence: Lawyers conduct thorough due diligence to uncover hidden risks, such as undisclosed debts, pending litigation, regulatory issues, or problems with contracts, leases, and intellectual property. This process helps buyers make informed decisions and gives sellers confidence that all disclosures are accurate.
- Drafting and Reviewing Agreements: Lawyers draft and review all key agreements, ensuring they are tailored to the specific transaction and comply with Australian law. This includes the main business sale agreement and any ancillary documents.
- Negotiating Terms: Lawyers negotiate terms on behalf of their clients to secure favorable outcomes, clarify obligations, and address any ambiguities or potential pitfalls in the contract.
- Transfer of Assets and Contracts: They manage the legal transfer of assets, leases, permits, licenses, and ongoing contracts, making sure all necessary approvals and assignments are obtained.
- Employment Law Compliance: Lawyers advise on the treatment of existing employees, transfer of entitlements, and compliance with workplace laws, ensuring a seamless transition for staff.
- Settlement and Completion: They oversee the settlement process, confirming that all conditions are satisfied, payments are made, and legal ownership is transferred without outstanding liabilities.
- Post-Sale Support: Lawyers can provide ongoing advice on post-sale obligations, such as restraint of trade, handover arrangements, and dispute resolution.
Key Agreements and Documents Lawyers Draft
The main legal document in a business sale is the Business Sale Agreement. Lawyers also prepare or review several related documents to safeguard their client’s interests:
- Heads of Agreement or Term Sheet: A preliminary, usually non-binding document setting out the key terms agreed by the parties before the full contract is drafted.
- Business Sale Agreement: The comprehensive contract detailing all terms and conditions of the sale, including what is being sold (assets, shares, goodwill), price, payment terms, and settlement arrangements.
- Transfer Deeds: For transferring ownership of specific assets, intellectual property, or leases.
- Employment Agreements or Transfer Notices: To address the transfer or termination of employees and the treatment of their entitlements.
- Non-Disclosure Agreements (NDAs): To protect confidential information during negotiations and after the sale.
- Completion Checklist: A practical tool to ensure all steps are completed before settlement.
Why Legal Advice Is Essential
Attempting to buy or sell a business without legal guidance exposes parties to significant risks, including:
- Unintended assumption of liabilities.
- Disputes over what is included in the sale.
- Problems with the transfer of leases, contracts, or licenses.
- Employment law breaches.
- Tax and regulatory non-compliance.
Lawyers help ensure all legal requirements are met, documents are properly drafted, and your interests are protected throughout the transaction.
Conclusion
Once the value of a business reaches a certain level, lawyers become indispensable in business sales and purchases. They provide expert guidance, draft and negotiate robust agreements, and manage the legal complexities of the transaction. Engaging a lawyer early in the process is the best way to help ensure a successful, compliant, and dispute-free outcome.
At Crabtree Legal, we understand that protecting your children’s inheritance from potential relationship breakdowns is a crucial concern for many families. The landmark Family Court of Australia decision in Bernard and Bernard [2019] FamCA 421 confirmed that testamentary trust Wills can be an effective tool in safeguarding a beneficiary’s inheritance from being divided upon divorce. Background of the Case In Bernard v Bernard, the husband’s late father created two discretionary testamentary trusts through his Will — one for his son and one for his daughter. The trusts operated as “mirror trusts”: each sibling was the trustee of the other’s trust but had no control over their own trust. The husband was the primary beneficiary of his trust, but the assets were legally owned and controlled by his sister as trustee. When the husband and wife later separated and divorced, the wife sought to have the husband’s inheritance held in the testamentary trust included in the matrimonial property pool for division. However, the husband argued that since he did not legally own or control the trust assets, and his interest was solely as a beneficiary dependent on the trustee’s discretion, the inheritance should be excluded from the property pool. Court’s Decision and Key Findings The Family Court ruled in favor of the husband, finding that the assets in the testamentary trust were not part of the matrimonial pool. The court’s key reasoning was that: The husband was not the settlor of the trust—the deceased father was. The husband had no legal ownership or control over the trust assets. The trustee (the husband’s sister) had complete discretion over income and capital distributions. The husband’s interest was discretionary and not guaranteed, meaning he could not compel distributions. The trust assets were inherited and not acquired during the marriage. This decision confirmed that a properly structured testamentary trust can protect a beneficiary’s inheritance from being divided upon divorce by separating legal ownership and control from mere beneficial interest. Why This Matters for Your Estate Planning Bernard v Bernard highlights how testamentary trust Wills can be used to safeguard your children’s inheritance from future relationship breakdowns, ensuring that inherited assets remain protected within the family and are not treated as divisible property in the event of a divorce. At Crabtree Legal, we specialise in Wills incorporating testamentary trusts and can provide tailored advice and drafting services to help you protect your family’s wealth across generations. Contact Crabtree Legal Today If you want to ensure your children’s inheritance is protected from a future divorce or relationship breakdown, contact Crabtree Legal today. We will guide you through establishing testamentary trust Wills that provide peace of mind and strong asset protection tailored to your family’s needs.
Crabtree Legal extends our sincere thanks to The Executive Centre for graciously hosting yesterday's Member Showcase lunch event, where our Director, Jonathan Crabtree, had the pleasure of presenting to fellow business owners. The session explored the limitations of Artificial Intelligence (AI) in drafting key legal documents for start-ups and Small to Medium Enterprises (SMEs). Together, we examined common pitfalls that arise when relying solely on automated drafting tools, including the risks of incomplete agreements, unenforceable clauses, and loss of commercial protection. We are particularly grateful to the business owners and entrepreneurs who attended and contributed to the discussion. Your questions, insights, and shared experiences sparked an engaging and practical conversation about balancing technological progress with the value of tailored legal advice. At Crabtree Legal, we remain committed to helping Perth’s business community make informed decisions as they grow and protect their ventures. Events like this highlight the strength of collaboration between local professionals and the importance of thoughtful, legally sound documentation in every stage of business development. To learn more about how we assist start-ups and SMEs with business structuring, shareholder agreements, and contract reviews, please contact us.
Testamentary Trust Wills provide significant benefits for individuals and families planning the distribution of their estates in Western Australia, particularly in terms of asset protection, tax efficiency, and supporting vulnerable beneficiaries. These trusts are established within a Will and become effective upon death, offering tailored advantages for diverse family circumstances. Key Benefits of Testamentary Trust Wills Asset Protection Safeguards inheritance from creditors, bankruptcy, and family law disputes by holding assets within a trust rather than direct ownership by beneficiaries. Shields assets from potential misuse or waste by beneficiaries with high-risk behaviours such as gambling, financial instability, or poor money management. Protects funds from being included in divorce settlements, ensuring they remain accessible only to intended family members. Tax Advantages Optimises tax outcomes by enabling income splitting among beneficiaries, especially those on lower marginal tax rates. Allows income distributed to minor children (under 18) via a testamentary trust to receive the full adult tax-free threshold (around $19,000–$22,000 per child annually, tax-free), compared to only about $500 in a standard family trust. Provides flexibility to defer tax liabilities for overseas beneficiaries by controlling the timing and distribution of income. Support for Vulnerable and Young Beneficiaries Helps ensure responsible use of inherited assets by enabling trustees to set age thresholds (e.g., 21, 25, or older) for the release of funds to younger beneficiaries. Allows creation of specialised trusts for beneficiaries living with disabilities, including Social Security Act 1991 (Cth) compliant Special Disability Trusts. Can provide long-term security for those who require ongoing support, such as family members with health challenges or special needs. Estate Planning Flexibility Highly customisable trusts can be tailored for one person, an entire family, or multiple generations, addressing complex family or blended family situations. Enables control over how and when assets are distributed, including restricting access to certain beneficiaries or protecting inheritance lines within families. Trustees are chosen to ensure accountability, oversight, and alignment with the intentions of the Will-maker, often with recommendations for two trustees to reduce risks. Who Should Consider a Testamentary Trust Will? Individuals leaving substantial estates (often $2,000,000 or more) including superannuation or life insurance. Estates intended to support minor children, vulnerable adults, or those likely to face relationship or financial risks. Families wishing to maximise tax savings and asset protection across generations. Crabtree Legal: Expert Guidance for Your Estate Plan Crabtree Legal offers tailored advice on testamentary trust Wills to protect your legacy and secure your family’s future. Whether you need a simple Will or a complex estate plan, we support business owners, families, and individuals through every stage of estate planning, succession, and trust creation. Feel free to contact Crabtree Legal for a personalised consultation to explore how a testamentary trust Will could benefit your unique situation.