9 Legal Considerations When Buying Or Selling A Small Business In Queensland

Buying or selling a small business in Queensland is an exciting venture, but it's also a complex legal process with specific local requirements. Whether you're a buyer looking for a new opportunity or a seller ready to move on, understanding the key legal considerations will help protect your interests and ensure a smooth transaction.

1. Contract Of Sale

The business sale contract in Queensland must clearly outline all agreed terms.

This includes:

• Purchase price and payment terms

• Assets and liabilities being transferred

• Adjustments for employee entitlements, stock, and rent

• Restraint of trade provisions

• Training or handover periods

• Conditions precedent (e.g. finance approval, lease assignment)

• Settlement date

  
  

In Queensland, the standard form REIQ Business Sale Contract is commonly used, but it must be drafted properly to ensure it is appropriate for the parties, and the nature of the transaction. Legal advice is essential to ensure the contract protects your interests and complies with relevant legislation.

2. Due Diligence

In Queensland, the buyer should conduct extensive and thorough due diligence. Whilst not a standard condition of an REIQ business sale contract, it is a common special condition our lawyers always recommend.

Due diligence should include researching and reviewing any document related to:

• Financial records and tax returns

• The business structure and ABN registration

• Lease agreements and supplier contracts

• Licences, permits, and regulatory approvals

• Employment records and entitlements

• Any ongoing disputes or liabilities

  
  

Sellers should ensure all records are accurate and accessible to avoid issues that could delay the buyer's right to undertake due diligence, or cause later disputes should something become known after settlement.

3. Transfer Of Business Assets

Assets may include tangible items (e.g. stock and equipment) and intangible assets (e.g. intellectual property, goodwill, domain names etc.)

In Queensland, intellectual property and licences must be correctly transferred or assigned under Queensland-specific laws and national frameworks (e.g. ASIC for business names and IP Australia for trademarks).

4. Lease Agreements

If the business operates from leased premises, the lease must either be assigned to the buyer or terminated.

Under Queensland law, an Assignment of Lease usually requires the landlord’s consent, which must not be unreasonably withheld, but there are strict procedures for requesting assignment. Both parties must also consider lease terms such as rent increases, renewal options, and make-good obligations.

5. Employees & Workplace Law

In Queensland, the Fair Work Act 2009 governs employment obligations.

Buyers must decide whether to:

• Offer new employment contracts to existing staff, or

• Not continue their employment

If continuing employment, accrued entitlements (annual leave, long service leave) may carry over, unless otherwise agreed and adjusted in the sale price.

A properly drafted contract of sale will specify how employee entitlements are handled and who is responsible for each.

6. Licences, Permits & Industry Regulations

Some businesses in Queensland require special licences or permits.

These may include:

• Liquor licences (Office of Liquor and Gaming Regulation Queensland)

• Food business licences (local councils)

• Trade-specific licences (QBCC)

It’s important to ensure these licences can be transferred to the buyer or re-applied for as part of the transaction. Local council approval may also be required for zoning or planning compliance.

7. GST And Tax Considerations

In Queensland, most business sales will involve GST, unless the sale qualifies as a going concern.

For the transaction to be exclusive of GST as a going concern:

• the business must be operating until the day of sale

• all necessary assets and agreements must be transferred

• the buyer must be registered for GST

Other tax considerations include Capital Gains Tax (CGT) for the seller and stamp duty exemptions (available in Queensland for most business assets, though not for land or some leasehold interests).

Its important to speak with any financial advisor and accountant as both a buyer and seller to ensure your financial and tax obligations are being met and protected where necessary.

8. Restraint Of Trade Clauses

A restraint of trade clause* is important for buyers to protect their investment. A valid restraint of trade will prevent the seller from setting up a competing business within a specified time frame and physical area.

In Queensland, courts will only enforce restraints that are reasonable in scope, time, and geography—so they must be carefully drafted.

*A quick note that this restraint of trade is different from a restraint enforced against an employee through their employment contract.

9. Franchise Agreements (If Applicable)

If the business being sold is part of a franchise, the Franchising Code of Conduct applies Australia-wide.

Buyers must obtain the franchisor’s consent and receive the necessary disclosure documents. Sellers must comply with strict notice and information requirements. Failing to follow the correct process could result in delays, disputes or termination of the franchise.

Get The Right Legal Advice From Start To Settlement

Selling or buying a business in Queensland involves much more than just agreeing on a price. From contracts and compliance to employee matters and tax implications, every step carries legal consequences. At RHC Solicitors, our senior commercial lawyers provide practical and tailored legal advice to guide you through this complex process, and ensure your interests are protected and met throughout the transaction.

Thinking about buying or selling a business? Contact our experienced commercial lawyers to get started.

Disclaimer: This publication is not intended to be comprehensive, nor does it constitute legal advice. We are unable to ensure the information is current and there is no guarantee in relation to accuracy. You should seek legal or other professional advice before acting or relying on any of the content of this publication. The views and/or opinions expressed in this publication is that of the author and may not necessarily represent the views and/or opinions of RHC Solicitors.

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