Question 1

Do you need a settlement agent when buying or selling a business?

Accepted Answer

While it isn't a legal requirement to use a business settlement agent, buying or selling a business is more involved than a standard real estate transaction. There are additional requirements, such as specific licences and permits for different types of businesses, pro-rating outgoings and complex contract conditions. As experienced business settlement agents, we will ensure every detail is handled correctly, reducing stress and liabilities to deliver a smooth transaction from start to finish.

Question 2

How are business outgoing and stock values calculated at settlement?

Accepted Answer

When a business is handed over to a new owner, the assets and liabilities may need to be adjusted as part of the settlement process. That includes business outgoings such as rent, rates and other annualised charges or income streams, so that the buyer and seller both pay their fair share. Stock is considered an asset and should be included in the business valuation before settlement, usually with a stocktake process after settlement to make any final adjustments to the price. As your Business Settlement Agent we will prepare or assist you with these adjustments and explain them before settlement is finalised.

Question 3

What happens to the commercial lease when I buy an established business?

Accepted Answer

If you're buying a business that operates from a leased premises, the commercial lease will need to be assigned to you as the new owner. This may be an assignment document, or a new lease may need to be negotiated with the landlord. Either way, make sure you carefully review the terms before signing to make sure you are aware of your rights and obligations. As your settlement agent we will make sure any conditions like this are satisfied and can advise you on the best way to achieve it prior to settlement going ahead.

Question 4

Why do I need a settlement agent?

Accepted Answer

The settlement process in Western Australia is extremely complex and involves many legal requirements, systems, processes and deadlines, that if missed, can incur severe financial penalties. As experienced settlement agents, West End Settlements can help you successfully navigate the process, identify potential issues before they arise, and see you through to the successful settlement you deserve without the stress of any missed deadlines.

Question 5

What does a settlement agent do?

Accepted Answer

We handle the complex legal paperwork, financial calculations and communications between all parties, making sure the property is legally handed over on settlement day. Responsibilities can range depending on the transaction in question, but covers things like Checking the Certificate of Title, Prepares and processes the documents to transfer the legal title to the property or business, Coordinating with mortgage brokers and banks, Ensures compliance with the agreed contract terms and conditions, Calculating financial adjustments, including council rates, water charges and land tax, Managing transfer duty requirements.

Business Settlements

Our Business Settlement Services include:

Buying and selling established businesses

Transfer of business names and licences

Stock and asset adjustments

Pro-rating business outgoings

ASIC PPSR compliance searches

Questions Answered