The ins and outs of selling and closing a business

Whether a business is being sold or closed down, it is important that assets are dealt with and that the relevant third parties are notified.

The two main reasons why business owners may choose to close down their business are where it is time to retire and it cannot be passed on or sold, and where the business is no longer making enough money to keep going.

Closing down a business can be simple if it is done in a systematic process. Some things to consider include:

• Advising all suppliers and customers;
   
• Dealing with any debtors and creditors; and
   
• Meeting all tax related matters such as paying off Tax Office debts such as GST, FBT and income tax liabilities, deregistration of tax related registrations, finalising employee payments and lodging a final tax return.

If the business is to be sold, important points to consider include:

• Determining the market value of the business (including any goodwill);
• Determining which assets and liabilities will be transferred; and
• Ensuring all the necessary paperwork such as legal documents are completed and agreed upon by both parties.

Lastly, each state or territory may have additional requirements that may also need to be satisfied.

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