Reading time: 3 minutes

Selling your business is exciting, but it is also a complicated process. For medium businesses, there may be more issues to consider than a small business. We set out the key points you should be aware of below.

Selling Your Business

In general, many SMEs choose to sell their business using the Standard Sale of Business Contract 2015. This contract contains the standard clauses usually included in a sale of the business contract. Note that other documents may also need to be attached to the contract depending on the type of deal. For example, the sale of a franchise must include the franchise agreement.

Businesses are also able to add or modify the clauses in the Standard contract with the addition of special conditions, which will take priority over the standard terms in case of inconsistency. For example, as a medium business that may have multiple departments, software programs and procedures, your purchaser may wish to have some specific skills to be included in the training period; this can be set out in a special condition.

Determine exactly what is being sold

The sale of the business agreement must specify what assets the purchaser is buying in exchange for the consideration. Assets of a business may include:

  • Business name;
  • Goodwill;
  • Equipment or plant used by the business;
  • Lease;
  • Employees;
  • Contact details (including phone numbers, emails and social media accounts);
  • Intellectual property;
  • Customer lists.

You must ensure that the purchaser understands precisely what they will be getting in the sale.

Purchase Price

The purchase price is one of the first items to be discussed and agreed on before the sale of the business contract is drawn up. The sale of a medium business will take into account the business’ goodwill and the plant and equipment. Hence, a medium business with more customers and a good reputation will sell at a higher price than a small business.
Once the purchase price is determined, it should also be allocated. This process decides how much should be given to plant and equipment, and goodwill.


As a medium business, you will likely have at least 50 employees. Before selling your business, you must inform all employees of the sale and ascertain which employees desire to stay on with the business. The Standard Contract includes a schedule for employees that allows you to set out details of each remaining employees’ employment agreement and any benefits or long service leave they are entitled to that would carry on to the new employer.
It is up to the purchaser which employees they choose to retain and whether or not they will recognise the service of transferring employees. As the seller, you are responsible for terminating the employment agreements of those who will not be transferred and to pay employee entitlements set out in the Standard contract.

Key Takeaways

Medium businesses should ensure they have considered the value of their business before selling it, reflected in an appropriate purchase price. The agreement should be clear on what is being sold and include any specific details as special conditions. If you are unsure or need assistance in getting the legalities sorted, contact LegalVision today to speak to one of our experienced business lawyers.


How Franchisors Can Avoid Misleading and Deceptive Conduct

Wednesday 18 May | 11:00 - 11:45am

Ensure your franchise is not accused of misleading and deceptive conduct. Register for our free webinar today.
Register Now

New Kid on the Blockchain: Understanding the Proposed Laws for Crypto, NFT and Blockchain Projects

Wednesday 25 May | 10:00 - 10:45am

If you operate in the crypto space, ensure you understand the Federal Government’s proposed licensing and regulation changes. Register today for our free webinar.
Register Now

How to Expand Your Business Into a Franchise

Thursday 26 May | 11:00 - 11:45am

Drive rapid growth in your business by turning it into a franchise. To learn how, join our free webinar. Register today.
Register Now

Day in Court: What Happens When Your Business Goes to Court

Thursday 2 June | 11:00 - 11:45am

If your business is going to court, then you need to understand the process. Our free webinar will explain.
Register Now

How to Manage a Construction Dispute

Thursday 9 June | 11:00 - 11:45am

Protect your construction firm from disputes. To understand how, join our free webinar.
Register Now

Startup Financing: Venture Debt 101

Thursday 23 June | 11:00 - 11:45am

Learn how venture debt can help take your startup to the next level. Register for our free webinar today.
Register Now

About LegalVision: LegalVision is a commercial law firm that provides businesses with affordable and ongoing legal assistance through our industry-first membership.

By becoming a member, you'll have an experienced legal team ready to answer your questions, draft and review your contracts, and resolve your disputes. All the legal assistance your business needs, for a low monthly fee.

Learn more about our membership

Need Legal Help? Submit an Enquiry

If you would like to get in touch with our team and learn more about how our membership can help your business, fill out the form below.

Our Awards

  • 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Winner – Australasian Lawyer
  • 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year - Australasian Law Awards
  • 2019 Most Innovative Firm - Australasian Lawyer