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Completing the Sale of a Business

In Short

  • The sale process involves three key stages: pre-completion, the completion day itself, and post-completion, each with specific actions and documents to finalise.
  • Key documents such as contracts, employee agreements, and business records must be prepared and exchanged during completion to ensure a smooth transition.
  • Conditions precedent, like transferring a lease or obtaining approvals, must be completed early to avoid delaying the sale.

Tips for Businesses

To ensure a successful business sale, make sure all conditions precedent are met before completion. These may include securing lease transfers, preparing employee agreements, and gathering essential business records. Using a completion checklist can help ensure everything is ready for a seamless ownership transfer.


Table of Contents

Selling a business involves several steps, moving parts and legal documents. Once you negotiate and exchange a business sale agreement with the other party, parties must transition to the completion process. This broadly involves the buyer and seller’s lawyers working together (and with their respective clients) to fulfil a number of obligations. Once all parties satisfy these obligations, the sale will be complete. Completion can be a stressful and overwhelming process, so it is useful to prepare a completion checklist to keep track of progress. This article discusses the key stages and documents common to most business sale transactions.

Pre-Completion Steps

Before the parties can complete the sale, there are several steps they must take to get ready for the big day (known as completion day). Each of the buyer and seller’s lawyers must review the business sale agreement carefully to ensure their respective clients satisfy these steps. Indeed, many of them can take time and may delay the sale if left to the last minute. 

The table below sets out some common pre-completion steps and the documents required to satisfy them.

Pre-Completion StepsDescriptionDocuments required
Corporate governance approvalsWhile not necessarily always found in the business sale agreement, it is important (and good corporate governance) that the entity entering into the transaction passes the necessary approvals to enter into the transaction and sale agreement. Depending on the company’s constitution and shareholders agreement, this could mean getting shareholder and board approval.board and shareholder resolutions 
Release of encumbrancesIf the business owner (seller) has granted a security interest over any of the assets being sold, those security interests will need to be dealt with. This usually means having that security released by having the secured party sign a notification of discharge. However, for some assets like leased equipment, the security interest will continue with the sale and the buyer will assume liability for the security. If this is the case, the business sale agreement should address this point.notification of discharge
TrainingThere are sometimes requirements for the seller to provide the buyer with training in the business prior to completion.none
StocktakeIf stock is forming part of the business sale, there can be a requirement that the seller completes a stocktake before completion to determine the stock’s value. none
Transferring employeesIf any employees are being transferred, new employment agreements will need to be entered with those employees and the buyer, which recognise their prior service and entitlements (if relevant).employment agreements

Conditions Precedent

Throughout the business sale agreement, there are several conditions that must be satisfied before the completion date. These are known as conditions precedent. 

It is usually a term of the sale agreement that if these conditions are not satisfied by the relevant party (or waived by the party which has the benefit of them), the other party can walk away from the sale. In the case of the buyer, they can potentially have their deposit refunded. 

The table below sets out some common conditions precedent in a business sale and the documents required to satisfy them.

Condition PrecedentDescriptionDocuments required
Dealing with the leaseIf a premise is subject to a lease, the landlord must consent to either the existing lease being assigned or agree to the grant of a new lease in favour of the buyer.deed of assignment (for an assignment); ordeed of termination and release and a new lease (for a grant)
Franchisor approvalsIf the business being sold is a franchise, the franchisor must approve the incoming buyer and enter into a new franchise agreement with them. The seller will need to sign a deed of surrender in release in regard to its franchise agreement with the franchisor.franchise agreement;deed of surrender and release
Key contractsSometimes a business being sold will be party to a key contract that a buyer will want either assigned or to have a new contract entered into with them before completion. This is because without that particular contract being on foot, the business may not be able to run.deed of novation; ornew contract
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Completion Day

On the completion date, both parties must work together to fulfil their respective obligations. Completion can differ greatly between transactions depending on what the business is and what assets are being sold. However, there are some obligations that are usually present in each business sale. Once the completion obligations have been fulfilled by both parties, the sale has been completed and the buyer is now the legal owner of the business. 

The table below sets out some common completion obligations in a business sale.

Completion ObligationDescriptionDocuments required
Deliver title documentsThe seller must deliver to the buyer any certificates of title or other documents relating to proof of ownership of the assets being sold.certificates of title
Deliver business recordsThe seller must deliver to the buyer any business records. Importantly the seller must only deliver the relevant business records, as there may be other records within the company not relevant to the sale.relevant business records
Physically deliver assetsSeller must physically deliver any assets being sold that are capable of physical delivery to the buyer.none
Other assignmentsIf any other contracts are being assigned as part of the sale (such as supply agreements or IP licences), these will need to be assigned at completion. If there are any vehicles, notices of disposal and any other documents required to transfer the registration.deed of assignment or novation;notice of disposal
Business name transferThe seller must deliver the transfer number for the business name to the buyer.none
Login detailsThe seller must deliver to the buyer any login details required for the buyer to access any of the assets being transferred, which may include social media accounts, emails and CRM systems.none
Pay the balance of the purchase priceBuyer must pay the balance of the purchase price, adjusted for any employee entitlements and stock value (if relevant). The buyer’s lawyer will prepare a settlement statement detailing how the purchase price balance has been calculated.settlement statement

Post-Completion Obligations

Sometimes there are post-completion obligations for the seller. These often include training the buyer on the business processes for a certain period of time. It can also include an agreement to be on call for a certain period of time for technical questions and assistance following the sale. The seller will usually have restraint obligations to comply with a certain period of time post-completion.

Key Takeaways

Completion can be a daunting and stressful process, as there can be a number of steps and obligations which both parties must adhere to ensure a smooth end to the transaction. Completion involves a three-step process: pre-completion, day of completion, and post-completion. All of these steps involve different documents and requirements. 

Of particular importance are the conditions precedent in the pre-completion stage, as if these are not fulfilled or waived, the other party will usually have the right to terminate the agreement and walk away from the sale. Likewise, in the case of the buyer, they can potentially have their deposit refunded. It is a good idea to keep a completion checklist handy so all parties can keep track of where things are at with completion.

If you need assistance with completing your business sale, our experienced business sale lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.

Frequently Asked Questions

What is completion?

Completion is the final stage of the business sale process, whereby the legal ownership of the business transfers from the seller to the buyer.

What documents are involved in completion?

It varies between transactions, but generally, it involves deeds of novation and/or assignment to transfer contracts, delivering business records, entering into new employment contracts and getting proof that encumbrances have been released.

Are the parties’ obligations over as soon as completion has occurred?

Not necessarily. Sometimes the seller will have to provide support to the buyer for a period of time following the sale. The seller will also need to comply with any restraints in the business sale agreement.

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Thomas Linnane

Thomas Linnane

Senior Lawyer | View profile

Thomas is a tax and corporate senior lawyer. He is the first point of contact for business structuring, startup and tax enquiries at LegalVision. Thomas has a passion for maximising client experience and satisfaction, and for helping a diverse range of people with their legal needs.

Qualifications: Bachelor of Laws, Bachelor of Media, University of New South Wales.

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