Purchase or sale of a freehold going concern
This is where you buy or sell both the property and business.
When buying, the first part of any matter of this nature is structuring. You can own the business and property in different entities and have those entities contract with each other. Getting the right taxation and structuring advice is very important.
We see different ways to document these deals form a contractual perspective, but we always think that they should be on two separate contracts as those contracts then deal with the individual issues that are needed. As simple examples, the land contract does not need to deal with operational issues (like business adjustments or staffing), and the business contract does not need to deal with issues like survey and property warranties. Putting both transactions on the one contract can become very messy.
Both contracts are subject to each other’s signing and settlement. You don’t end up transacting on one and not the other.
Making sure you have covered GST appropriately is very important. No one wants to be out 1/11th of the otherwise agreed price.
Once the transaction is structured and appropriately documented they meld into two separate styles. These are: