What is a 'sale of business as a going concern' under Australian law?

A going concern sale means the buyer purchases the business as a fully operational entity, acquiring all assets and arrangements necessary for the continued operation of the business. Under section 38-325 of the A New Tax System (Goods and Services Tax) Act 1999 (Cth), the supply of a going concern is GST-free if: (a) both the vendor and purchaser are registered or required to be registered for GST; (b) the vendor carries on the business until the completion date; and (c) the supply includes all things necessary for the continued operation of the business. This GST-free treatment represents a significant saving of 10% of the purchase price and must be expressly agreed in the Sale Agreement. If the Australian Taxation Office subsequently determines that the supply does not qualify as a going concern, the purchaser is typically required to pay the GST to the vendor.

What due diligence should a purchaser conduct before buying a business in Australia?

A purchaser should conduct thorough due diligence before buying any business in Australia. Financial due diligence should review at least three years of financial statements, BAS statements, ATO correspondence, and bank statements to verify the business's financial performance and identify any tax obligations. Legal due diligence should review all material contracts, leases, licences, permits, and employment agreements, and identify any undisclosed litigation or disputes. The purchaser should search the PPSR under the Personal Property Securities Act 2009 (Cth) for any security interests registered against the business assets. ASIC searches should be conducted against the vendor's company. Regulatory compliance should be verified, including compliance with the Australian Consumer Law, Fair Work Act 2009, and applicable WHS legislation. The purchaser should engage a solicitor and a registered tax agent to advise on these matters.

How does a business sale affect employees in Australia?

Under Part 2-8 of the Fair Work Act 2009 (Cth), the sale of a business as a going concern constitutes a 'transfer of business'. Where a transfer of business occurs, enterprise agreements and other transferable instruments that applied to employees in the old business will continue to apply to those employees in the new business. The purchaser must offer employment to transferring employees on terms and conditions no less favourable than their existing terms. The vendor is responsible for all employee entitlements (including annual leave, long service leave, superannuation, and personal leave) accrued up to and including the completion date. The purchaser should obtain a complete employee list, including accrued leave balances, well before completion so that any purchase price adjustment for recognised employee entitlements can be calculated and agreed.

Is a restraint of trade clause enforceable in an Australian business sale?

Yes, restraint of trade clauses are enforceable in Australia in the context of a business sale when they are reasonably necessary to protect the purchaser's investment in the goodwill purchased, and are reasonable in their scope, duration, and geographic area. Australian courts have consistently recognised that a purchaser of goodwill is entitled to protect the benefit of that goodwill by restraining the vendor from competing with the business. The courts apply a 'read down' approach — if a restraint is found to be too broad, the court may reduce it to a reasonable scope rather than strike it out entirely. In New South Wales, the Restraints of Trade Act 1976 (NSW) provides the court with explicit power to enforce a restraint to the extent that it is reasonable. Both parties should seek independent legal advice regarding the scope and enforceability of any restraint clause.

What is the difference between a Business Sale Agreement and a Business Purchase Agreement?

A Business Sale Agreement and a Business Purchase Agreement are different names for the same type of document: a legally binding contract between the vendor (seller) and purchaser (buyer) for the sale and purchase of a business as a going concern. The terminology used often depends on which party's solicitor drafted the agreement — solicitors acting for vendors may call it a 'Business Sale Agreement' while solicitors acting for purchasers may call it a 'Business Purchase Agreement'. The terms of both types of agreement are substantively the same and cover the sale of the business assets (including goodwill, stock, plant, equipment, licences, and contracts), the purchase price and GST treatment, due diligence, employee transfer, restraint of trade, vendor warranties, and completion. Australian solicitors commonly use either term interchangeably.

Business Purchase Agreement — Sale of Business (Australia)

This Business Purchase Agreement (the "Agreement") is entered into on [Agreement Date] by and between:

VENDOR:

[Vendor Name] (ABN [Vendor ABN], ACN [Vendor ACN]), of [Vendor Address], [Vendor Suburb] [Vendor State] [Vendor Postcode] (the "Vendor"); and

PURCHASER:

[Purchaser Name] (ABN [Purchaser ABN], ACN [Purchaser ACN]), of [Purchaser Address], [Purchaser Suburb] [Purchaser State] [Purchaser Postcode] (the "Purchaser").

The Vendor and the Purchaser are referred to collectively as the "Parties".

BACKGROUND

A. The Vendor carries on the business known as [Business Name], being a [Business Description] operated at [Business Address], [Business Suburb] [Business State] [Business Postcode] (the "Business").

B. The Vendor wishes to sell, and the Purchaser wishes to purchase, the Business as a going concern on the terms and conditions set out in this Agreement.

NOW THEREFORE, in consideration of the mutual promises and covenants contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties agree as follows:

1. SALE OF BUSINESS AS GOING CONCERN

1.1 Subject to the terms and conditions of this Agreement, the Vendor agrees to sell and the Purchaser agrees to purchase the Business as a going concern, including the following assets:

Goodwill of the Business, including the business name '[Business Name]', trade marks, customer and supplier relationships, social media accounts, and the right to represent to customers that the Purchaser is the successor to the Business;
All stock-in-trade and inventory as at the Completion Date, subject to stocktake;
All plant, equipment, fixtures, fittings, tools, and machinery used in the Business as listed in Schedule 1;
All transferable licences, permits, registrations, and approvals held in connection with the Business, subject to any required consents;
All contracts, leases, and agreements of the Business to the extent assignable or novatable with third-party consent;
All books, records, customer lists, supplier lists, databases, and other business information relating to the Business; and
The intellectual property of the Business including trade marks, domain names, websites, and software licences.

1.2 The Purchaser does not assume any liability or obligation of the Vendor except as expressly stated in this Agreement.

2. PURCHASE PRICE AND ALLOCATION

2.1 The total purchase price payable for the Business is AUD [Total Purchase Price] (the "Purchase Price"), allocated as follows:

Goodwill: AUD [Goodwill Value]
Stock and inventory (subject to stocktake adjustment at Completion): AUD [Stock Value]
Plant and equipment: AUD [Plant Equipment Value]
Other assets: AUD [Other Assets Value]

2.2 The Purchaser shall pay a deposit of AUD [Deposit Amount] upon execution of this Agreement. The deposit shall be held in the Vendor's solicitor's trust account and credited against the Purchase Price at Completion.

2.3 The balance of the Purchase Price shall be paid by the Purchaser to the Vendor in cleared funds on the Completion Date.

2.4 The stock and inventory allocation is an estimate only. A stocktake shall be conducted by the Parties (or their representatives) within 2 business days prior to the Completion Date and the Purchase Price shall be adjusted accordingly.

3. GOODS AND SERVICES TAX (GST)

3.1 The Parties intend that the sale of the Business under this Agreement constitutes the supply of a going concern for the purposes of section 38-325 of the A New Tax System (Goods and Services Tax) Act 1999 (Cth) ("GST Act").

3.2 For the supply to be GST-free under section 38-325 of the GST Act, the Parties acknowledge that:

The Vendor is registered or required to be registered for GST;
The Purchaser is registered or required to be registered for GST at Completion;
The supply includes everything necessary (including goodwill) for the continued operation of the Business; and
The Vendor will carry on the Business until the Completion Date.

4. COMPLETION

4.1 Completion shall take place on [Completion Date] (the "Completion Date") at the offices of the Vendor's solicitor, or at such other time and place as the Parties agree in writing.

4.2 At Completion, the Vendor shall:

Deliver to the Purchaser all keys, access codes, passwords, and means of access to the business premises and systems;
Execute and deliver all transfer documents, assignments, novations, and other instruments required to vest the Business assets in the Purchaser;
Deliver all business records, licences, permits, plant, stock, equipment, and other tangible assets included in the sale;
Provide written confirmation that all PPSR registrations against the business assets have been discharged; and
Deliver a statutory declaration that all Vendor warranties remain true and correct as at the Completion Date.

4.3 At Completion, the Purchaser shall pay the balance of the Purchase Price to the Vendor in cleared funds.

4.4 Risk in the Business passes from the Vendor to the Purchaser at 5:00 pm on the Completion Date. All income, expenses, and outgoings of the Business are adjusted as at that time.

5. VENDOR WARRANTIES

5.1 The Vendor warrants to the Purchaser that, as at the date of this Agreement and as at the Completion Date:

The Vendor has full power and authority to enter into this Agreement and to sell the Business;
The Vendor is the sole legal and beneficial owner of the Business and has good title to all assets included in the sale;
The financial accounts and trading information provided to the Purchaser are true, accurate, and not misleading;
There are no legal proceedings, disputes, or regulatory investigations pending or threatened against the Vendor or the Business;
All licences, permits, and registrations required to operate the Business are current and in good standing;
The Vendor has not done or omitted to do anything that would cause a material adverse change in the Business between the date of this Agreement and the Completion Date;
The Business has no undisclosed liabilities, debts, or commitments (other than those incurred in the ordinary course of business);
All plant and equipment included in the sale is in good working order, fair wear and tear excepted; and
The Business complies with all applicable laws and regulations, including the Australian Consumer Law, the Fair Work Act 2009 (Cth), and applicable workplace health and safety legislation.

5.2 The Purchaser must notify the Vendor in writing of any warranty claim within [Warranty Period] months of the Completion Date. Any claim not notified within that period is extinguished.

6. GENERAL PROVISIONS

6.1 Entire Agreement: This Agreement (together with its schedules) constitutes the entire agreement between the Parties regarding the sale of the Business and supersedes all prior representations, negotiations, and understandings, whether oral or written.

6.2 Amendments: No amendment is effective unless in writing and signed by both Parties.

6.3 Severability: An invalid or unenforceable provision does not affect the validity of the remaining provisions.

6.4 Default: If either Party defaults in a material obligation and fails to remedy the default within 10 business days of written notice, the non-defaulting Party may terminate this Agreement and seek damages. Upon the Purchaser's default, the Vendor may forfeit the deposit as liquidated damages.

6.5 Stamp Duty: The Purchaser shall pay all stamp duty, transfer duty, or other government imposts payable on this Agreement and the transfer of the Business assets.

6.6 Notices: All notices must be in writing and delivered by hand, post, or email to the Party's address in this Agreement.

6.7 Governing Law: This Agreement is governed by the laws of [Governing State], Australia. The Parties submit to the exclusive jurisdiction of the courts of [Governing State].

6.8 Independent Advice: Each Party acknowledges that it has had the opportunity to obtain independent legal and financial advice before signing this Agreement.

EXECUTED as an agreement on [Agreement Date].

VENDOR:

Name: [Vendor Name]

ABN: [Vendor ABN]

PURCHASER:

Name: [Purchaser Name]

ABN: [Purchaser ABN]

Vendor

________________

Signature

Date: ________________

Purchaser

________________

Signature

Date: ________________

Maintained by Vladislav Sergienko, Founder·Template last modified: 2026-06-23·Report an error

What Is a Business Purchase Agreement — Sale of Business (Australia)?

A Business Purchase Agreement — Sale of Business in Australia transfers ownership of a business or its assets from seller to buyer and records the price, assets included, and warranties given, with the sale governed by the Corporations Act 2001 (Cth).

Under a Business Purchase Agreement, the vendor agrees to sell and the purchaser agrees to buy the business as a going concern — meaning the business is transferred as a fully operational entity with all assets, goodwill, contracts, licences, stock, and other elements necessary for it to continue operating. This is the standard structure for most business sales in Australia, as distinct from a share sale (where the buyer acquires shares in the company that owns the business) or an asset sale (where only specific assets are transferred).

One of the most important tax considerations in any Australian business sale is whether the transaction qualifies as a GST-free supply of a going concern under section 38-325 of the A New Tax System (Goods and Services Tax) Act 1999 (Cth). Where both the vendor and purchaser are registered for GST, the vendor continues to carry on the business until completion, and the supply includes all things necessary for the continued operation of the business, no GST is payable on the purchase price — saving the purchaser 10% of what can be a very significant sum.

Goodwill is usually the most valuable component of a business sale in Australia. It represents the value of the business's customer relationships, brand reputation, trading history, supplier networks, and ongoing business connections. Because goodwill is intangible, a Business Purchase Agreement must contain strong provisions protecting the purchaser's investment in goodwill — including strong restraint of trade obligations on the vendor preventing them from competing with the sold business after completion.

The Australia Business Purchase Agreement — Sale of Business (Australia) template is governed by Australian federal and state law and is suitable for use in all Australian states and territories including New South Wales, Victoria, Queensland, Western Australia, South Australia, Tasmania, the Australian Capital Territory, and the Northern Territory.

The legal framework governing the Business Purchase Agreement — Sale of Business (Australia) in Australia draws on several key statutes and regulatory bodies. Under the Corporations Act 2001 (Cth), the Australian Securities and Investments Commission (ASIC) regulates companies and financial services. Section 127 of the Corporations Act 2001 governs company execution of documents. The Australian Competition and Consumer Commission (ACCC) enforces the Competition and Consumer Act 2010 (Cth). The Australian Taxation Office (ATO) administers the Goods and Services Tax under the A New Tax System (Goods and Services Tax) Act 1999. The Federal Court of Australia and Supreme Courts of each state have jurisdiction over corporate disputes. Parties executing a Business Purchase Agreement — Sale of Business (Australia) in Australia should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Corporations Act 2001 (Cth) sets the foundational requirements.

When Do You Need a Business Purchase Agreement — Sale of Business (Australia)?

A Business Purchase Agreement is required whenever a buyer wishes to acquire an entire business as a going concern in Australia. It is the appropriate document for any transaction involving the transfer of a business's goodwill, operations, trading relationships, and assets from one entity to another.

You need a Business Purchase Agreement when you are: buying or selling a retail business, café, restaurant, professional practice, trade business, service business, or online business; acquiring a franchise business or a licensed premises; purchasing a business from a retiring owner; acquiring a business from an estate or executor following the death of the owner; completing an arm's length commercial acquisition of an SME (small to medium enterprise) in any industry.

A Business Purchase Agreement is particularly important — and legally essential — where the transaction involves: the transfer of employees under the Fair Work Act 2009 (Cth); the assignment of commercial leases requiring landlord consent; the novation or assignment of material supplier or customer contracts; the transfer of regulatory licences and permits (such as liquor licences, food business registrations, or trade licences) requiring regulatory approval; or a claim for GST-free going concern treatment under section 38-325 of the GST Act.

A Business Purchase Agreement is also the appropriate vehicle for addressing a due diligence period — a period during which the purchaser investigates the financial performance, contractual obligations, regulatory compliance, and overall health of the business before committing to completing the transaction. A properly drafted due diligence clause gives the purchaser the right to withdraw if due diligence reveals material issues, while giving the vendor certainty about the process and timeline.

Both the vendor and the purchaser should seek independent legal advice from a solicitor experienced in commercial transactions, and independent accounting and tax advice from a registered tax agent, before signing any Business Purchase Agreement. The CGT, stamp duty, and GST implications of a business sale can be substantial, and both parties need professional guidance to structure the transaction appropriately.

What to Include in Your Business Purchase Agreement — Sale of Business (Australia)

A thorough Australian Business Purchase Agreement should include several essential provisions to adequately protect both the vendor and the purchaser throughout the transaction.

The sale of business clause defines precisely what is being sold and purchased as a going concern. This includes an itemised description of all assets included in the sale (goodwill, stock, plant and equipment, intellectual property, leases, licences, contracts, and customer records) and a clear statement of any excluded assets. Schedules should be attached listing all significant assets in detail.

The purchase price and allocation clause sets out the total consideration payable by the purchaser and how it is allocated across different asset classes. The allocation is critical for CGT purposes — particularly for the vendor's ability to access CGT small business concessions under Division 152 of the Income Tax Assessment Act 1997 (Cth) — and for the purchaser's depreciation and future CGT cost base calculations. Both parties should obtain independent tax advice regarding the allocation before signing.

The GST going concern clause addresses whether the sale qualifies as a GST-free supply of a going concern under section 38-325 of the A New Tax System (Goods and Services Tax) Act 1999 (Cth). This clause is essential in every Australian business sale and must clearly state the parties' intentions regarding GST and the consequences if the ATO determines that the GST-free concession does not apply.

The due diligence clause gives the purchaser a reasonable period to investigate the business before committing to completion. The clause should specify the duration of the due diligence period, the information and access the vendor must provide, and the purchaser's right to withdraw if due diligence reveals unacceptable issues.

The employee transfer clause addresses the requirements of Part 2-8 of the Fair Work Act 2009 (Cth) regarding the treatment of employees in a transfer of business, including the recognition of accrued leave entitlements and the continuation of transferable industrial instruments.

The vendor warranties are representations given by the vendor to the purchaser about the accuracy of financial information, the vendor's title to the business assets, the absence of undisclosed liabilities, the current status of licences and permits, and the ongoing compliance of the business with applicable laws. The restraint of trade clause prevents the vendor from competing with the purchaser's newly acquired business, protecting the value of the goodwill purchased.

Additional compliance elements for a Business Purchase Agreement — Sale of Business (Australia) used in Australia include: Under the Corporations Act 2001 (Cth), the Australian Securities and Investments Commission (ASIC) regulates companies and financial services. Section 127 of the Corporations Act 2001 governs company execution of documents. The Australian Competition and Consumer Commission (ACCC) enforces the Competition and Consumer Act 2010 (Cth). The Australian Taxation Office (ATO) administers the Goods and Services Tax under the A New Tax System (Goods and Services Tax) Act 1999. The Federal Court of Australia and Supreme Courts of each state have jurisdiction over corporate disputes. Forms-legal.com provides this template as a starting point for Australia-compliant documentation.

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Forms Legal. (2026). Business Purchase Agreement — Sale of Business (Australia) (Australia) [Legal document template]. Forms Legal. https://forms-legal.com/australia/business/bills-of-sale/business-purchase-agreement-australia

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@misc{formslegal-business-purchase-agreement-australia,
  author       = {{Forms Legal}},
  title        = {Business Purchase Agreement — Sale of Business (Australia) (Australia)},
  year         = {2026},
  howpublished = {\url{https://forms-legal.com/australia/business/bills-of-sale/business-purchase-agreement-australia}},
  note         = {Free legal document template. Based on Corporations Act 2001 (Cth)}
}

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Business Purchase Agreement — Sale of Business (Australia)

What Is a Business Purchase Agreement — Sale of Business (Australia)?

When Do You Need a Business Purchase Agreement — Sale of Business (Australia)?

What to Include in Your Business Purchase Agreement — Sale of Business (Australia)

Cite this page

Also available for these jurisdictions:

Frequently Asked Questions

Related Documents

Business Sale Agreement (Australia)

Asset Purchase Agreement (Australia)

Share Purchase Agreement (Australia)

Heads of Agreement (Australia)

Purchase Offer Letter (Australia)