• Skip to main content
  • Skip to primary sidebar
  • Skip to footer
[email protected] (02) 9299 4912

Lawyers Sydney | Solicitors in North Shore, Sydney

  • Home
  • Our Story
    • Our Community
    • Our Environment
  • Our Services
    • Sydney’s Premier Commercial Law Firm
      • Starting A New Business
        • New Business Structures
      • Buying & Selling a Business
        • Corporate Mergers and Acquisitions (M&A)
        • Sale or Purchase of Shares in a Private Company
        • FAQ – Sale of Business
        • FAQ – Purchase of Business
      • Commercial Dispute Resolution Law in Sydney
      • Corporate Governance & Asset Protection
      • Intellectual Property & IP Law
      • Contract Law
      • Climate Change, Energy Law & Carbon Trading
    • DEBT RECOVERY LAW
      • Debt Recovery Process
      • Enforcing a Debt or Judgment
      • Car Accidents & Motor Vehicle Claims
    • PROBATE LAW
      • Applying for a Grant of Probate
      • Contesting a Will
      • FAQ’s – Executors and the Administration of Deceased Estates
    • Civil Disputes & Litigation
      • Commercial Dispute Resolution Law in Sydney
        • Shareholder Disputes
        • Partnership Disputes
        • Director’s Disputes
        • Contract & Property Disputes
      • Litigation
        • COMMERCIAL LITIGATION LAWYERS IN SYDNEY
      • Negligence
      • Alternative Dispute Resolution (ADR)
    • Property & Conveyancing
      • Retail & Commercial Leases
      • Selling a Property
        • FAQ – Selling a Property
      • Buying a Property
        • FAQ – Buying a Property
      • Transferring Property in NSW
      • Property Owners Disputes
      • Caveats
      • Mortgages & Securities
      • Option Agreements
      • Electronic Conveyancing in NSW
    • WILL DISPUTE LAW
      • Drafting a Will
        • Children in Wills
        • Letter of Wishes
        • Digital Assets in a Will
      • Power of Attorney
      • Guardianship & Enduring Guardians
      • Elder Law
      • FAQ’s – Wills and Estates
    • Bankruptcy & Insolvency
      • Personal Bankruptcy
        • Bankruptcy Notices
        • Debt Agreements
        • Enforcing a Debt or Judgment
      • Company Insolvency
        • Creditor’s Statutory Demand
        • Creditor’s Petition
        • Winding Up or Deregistering a Company
    • Building & Construction
      • Building & Construction Contracts
      • Building & Construction Disputes
      • Security for Payments Act
    • SYDNEY EMPLOYMENT LAW
    • Insurance Law
    • Public Notary
  • Online Quotes
    • Simple Will Quote
    • Debt Recovery Quote
    • Conveyancing Quote
  • Meet the Team
    • Michelle Rockliff
    • Nicole Rockliff
    • Sarah Mooney
    • Nathan Rockliff
    • Trudy David
  • News & Articles
  • Contact Us
You are here: Home / News / Property & Conveyancing / Due Diligence

15/02/2012

Due Diligence


What is due diligence?

The term “due diligence” may appear to some as having some highly technical and complex meaning. However, in simple terms all the phrase really means is the process by which you as a purchaser (of a business, say a franchise business) are satisfied that:

  • The vendor (seller) has good title for the assets to be sold; and
  • The anticipated price is reasonable in all the circumstances.

It involves the purchaser taking reasonable precautions and care to ensure that the facts that are presented to you are correct and that what you (as purchaser) buy, lives up to the representations given by the owner/vendor.

So why should you undertake due diligence on a business?

Simply stated, you want to manage your risk.  After all, the concept of caveat emptor or buyer beware is a concept that is very much alive in Australian business transactions.

Franchises

Fortunately though, when dealing with franchising, franchisors are regulated by the Franchising Code of Conduct, which arises out of Commonwealth Government law.  This law is applicable Australia wide.

Other

What about outside franchising; should you simply rely on what the vendor tells you, even if it is in writing in a contract? It is never a good substitute to simply rely on the warranties provided by the vendor in the contract itself, as there may be limits on the warranty claims made.  There may also be time limits applicable to any claim.  Further still, the vendor may be of only very limited assets and those warranties then will be of limited use!

What if I am the Seller? How is due diligence relevant to me?

As a seller of a business, (i.e. the vendor) your due diligence needs to ensure that what you tell any prospective purchaser is accurate and will not fall foul of laws that prohibit misleading and deceptive conduct.  Silence can also be misleading in some circumstances!

As a Buyer, what should I consider in my due diligence?

As the purchaser, your legal advisor should consider matters such as:

  • Who is the vendor?  Identify them fully.
  • What has been the history of the Vendor?  Where the Vendor is a company, ASIC can help here.
  • What property (for example real estate), does the vendor own?
  • Is there an asset register provided to you?
  • What are the interests of third parties?
  • What licences are required to run the business?
  • What contracts are relevant?  What contracts do you wish to now be assigned to?
  • What intellectual property does the business own? (There can be numerous considerations here)

There are many other considerations here when properly undertaking a due diligence of the proposed business.  After all, it is worthwhile being safe than sorry! Contact us to find out more or to arrange a consultation with an experienced property lawyer in Sydney.

There may be many other considerations and this is not meant as an exhaustive list.  This is not intended to act as legal advice and is merely provided as general assistance and not otherwise and should not be relied upon, as every circumstance is unique in nature.

Primary Sidebar

Search

Categories

  • Wills & Estate Planning
  • Insurance Law
  • General Legal Services
  • Divorce & Family Law
  • Debt Recovery
  • Civil Disputes & Litigation
  • Business & Commercial
  • Building & Construction
  • Bankruptcy & Insolvency
  • General
  • Uncategorised
  • Taxation
  • Superannuation
  • Services
  • Property & Conveyancing
  • Probate, Estate Administration & Disputes
  • News
  • Employment Law

Online Enquiry

* indicates required field

News & Articles

Managing Employees in Australia given the Impact of COVID-19

  We stress that due to the unprecedented nature of the pandemic and the very rapidly changing landscape, the guidelines below are general in nature and subject to change. Many of the laws that now apply to this situation were not written with regard to what is currently occurring. Therefore please exercise caution in relying […]

Temporary Changes to Insolvency Laws in Australia due to the Coronavirus (COVID-19) Crisis

In a move aimed to lessen the economic impact on businesses and individuals caused by the Coronavirus pandemic, the Australian Government has introduced some changes to insolvency laws in Australia that apply to personal and corporate insolvency regimes. This includes a temporary increase to the threshold in which creditors can issue a statutory demand on […]

Coronavirus (COVID-19) Update

Following on from the extensive reporting in relation to the COVID-19 pandemic we have implemented a number of protocols to enable the business to continue operating if a staff member or principal is diagnosed with the virus and/or the office needs to close for a period of time. Our staff and principals have adopted best […]

Footer

The Rockliffs Lawyers Difference

We provide pragmatic and practical solutions to your legal needs
We have decades of combined experience
Our lawyers and consultants are experts in their field to enable us to give you tailored legal advice to suit your specific needs

Contact Us

  • Suite 14, Level 26, 44 Market St Sydney NSW 2000
  • (02) 9299 4912

Connect With Us

  • Email
  • Facebook
  • LinkedIn

Newsletter

Sign up to our newsletter for updates on our latest news, articles and special promotions!

Our website does not give legal advice. All materials are for informational purposes only and should not be relied upon as legal advice. The use of this website is subject to our:
WEBSITE DISCLAIMER – PRIVACY POLICY – TERMS & CONDITIONS OF USE
Liability limited by a scheme approved under Professional Standards Legislation.Copyright © 2020 · Website hosted by Lift Legal Marketing · Log out