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businessopportunities.com.au

Buying an existing business, one tab at a time

Tab 4 of 5 · Registrations

Registrations that do not transfer with a business

In an asset sale the business entity stays with the seller, so the buyer needs some registrations in their own name: Business Queensland notes that a sole trader cannot transfer an ABN, and the buyer gets their own. Other things move only by a step someone else takes: ASIC’s business name transfer starts with the current owner, who passes a transfer number to the new owner to register the name, and business.gov.au says licence transfers can take up to 12 months.

General information, not legal or tax advice on any purchase. The official places to check are the Australian Business Register, the ATO, ASIC and business.gov.au.

Where the sale starts from

Which registrations a buyer has to make depends first on what is being bought. In a share sale, Business Queensland says, the buyer takes ownership of all aspects of the business, and all its rights and obligations come with it. In an asset sale, the buyer is purchasing the assets, “not the business itself”. The two are set side by side on the home page. The list below follows an asset sale, where the registrations come apart.

Item by item

  1. The ABN Buyer gets their own

    Business Queensland’s example is a sole trader selling up: they are only selling the assets, and “a sole trader cannot transfer an ABN”, so the buyer must get their own to operate under. On the other side, cancelling the old ABN is on business.gov.au’s list of the seller’s final steps. The Australian Business Register asks a seller to meet their lodgment, reporting and payment obligations before cancelling, and notes that online changes to an ABN take effect immediately.

  2. GST registration Buyer registers

    The ATO says an ABN is needed before registering for GST. For a going-concern sale, the buyer’s registration is one of the conditions for the sale to be GST-free, which is why the ABN comes early: the detail is on the GST tab.

  3. The business name Moves by transfer, started by the seller

    A buyer who wants to keep trading under the seller’s registered name needs the registration transferred. ASIC’s process runs in this order:

    1. The current owner starts the transfer through ASIC Connect and receives a transfer number.
    2. They pass that number to the new owner.
    3. The new owner registers the name, typing it exactly as the business names register shows it, and the number in its exact form: a 1, a hyphen, then 11 digits.
    4. Within 28 days of the old owner submitting the transfer, ASIC cancels their registration.

    Two dates matter. The transfer number stays valid for 4 months and 28 days, counted from when the transfer application is made; once it lapses, the name is open to others. And the old renewal period does not carry over: the new owner chooses a 1-year or 3-year period when registering, and the old owner gets no refund for time left. For a short while the register may show the name twice, once for each owner. ASIC can stop a transfer only if it has not yet been processed.

  4. The brand behind the name A separate question

    business.gov.au is clear that registering a business name gives no exclusive right to it, and that a trade mark holder can still use the name even if another business has registered it. A registered trade mark, it says, gives exclusive rights to the name in Australia. Business Queensland’s due diligence list puts trade marks, patents, copyright and registered designs under intellectual property.

  5. Licences and permits Transferred, slowly

    business.gov.au asks a buyer to check that the business holds the correct licences and permits and that they are up to date. Transferring them is among the seller’s steps after a sale, and because licence transfers can take up to 12 months, it says to plan for them early. Equipment can carry its own licensing too: business.gov.au asks whether plant and machinery are “in good working order and licenced”.

  6. The lease Needs the landlord

    Will the landlord agree to transfer the lease into the buyer’s name, or does a new lease have to be negotiated? That is business.gov.au’s question. Until the transfer happens, the seller stays responsible for the lease and its obligations. Business Queensland’s list asks about the lease’s terms too: recent changes of landlord, possible rent rises, permitted uses and guarantors.

  7. Supplier contracts May need consent

    Business Queensland asks whether the seller can transfer a supplier contract without the supplier’s consent, and whether there are unwritten agreements with suppliers.

Putting them in order

The long ones start first. A licence transfer that can run to a year sits at one end; the business name’s transfer number, good for under five months, at the other. The buyer’s own ABN comes before GST registration, and for a going-concern sale, a buyer who is not required to register but chooses to must have that registration take effect on or before the day of the sale, the ATO’s ruling says. The questions that turn these up belong on the checks tab; the dates they are tied to are set in the contract.

Business Queensland’s closing reminder for a buyer is to review the options and requirements for business structure, registrations and licences before purchasing.