Things you should know about change of ownership
Posted: 23 Mar , 2017Business planning
There may be situations where your business changes ownership.
Reasons for a change of ownership can include:
- selling your business
- transferring your business to a family member or friend
- adding new partners to the business.
If you're selling or transferring your business
If you're changing ownership of the business by transferring it to a family member or friend, or if you're selling your business and will no longer be part of it, you'll need to:
- cancel your Australian Business Number (ABN) (make sure you've met all your reporting and payment obligations first)
- either transfer your business name (if the new owners want to continue using it) or cancel your business name (if they don't want to use it anymore)
- cancel other tax registrations, such as Goods and Services Tax (GST)
- lodge any final tax returns
- pay any outstanding activity statements and instalment notices
- make GST adjustments on your final activity statements
- pay any outstanding bills, such as water and electricity
- transfer any other assets, such as domain names or web registration, to the new owner
- transfer any business records, customer records and employee records to the new owner.
Transfer lease agreements, permits and licenses
It’s a good idea to transfer your leases to the new business owner at the same time your business is transferred.
If you're selling your business, you're still responsible for any lease agreements and obligations for your business until they are transferred to the new owner.
Different leases can have varying conditions when it comes to transfer of ownership, so make sure you understand the conditions of your lease agreements before you transfer them to the new owner.
Also keep in mind that transferring licenses can take a long time (sometimes up to 12 months), so it’s important to plan for this early in the process.
If you're adding new partners
If new partners are joining the business you'll need to:
- update your partnership details on the business name register by adding the new partners to the registration (you can also remove any partners that are leaving, as long as there are at least two partners left in the business)
- apply for a new ABN or add the details of new partners to the existing ABN registration
- sign a partnership agreement with the new partners to set out the terms and conditions of the partnership
- update your details with the ATO for tax purposes.
This content was first published on www.business.gov.au