Hire and Rental News - November 2018

19 HIRE AND RENTAL NEWS • NOVEMBER 2018 INDUSTRY in FOCUS lease with the seller, which is effective from completion, so you can continue to use the premises. If the seller rents the premises from a third party, you may need to have the existing lease assigned to you or negotiate a new lease with the landlord. If the premises are important to the business, you may want to make this a condition of the sale, to allow you to terminate the sale contract if you fail to secure the lease on terms which you are happy with. 4. Online presence Does the business have a website? Does it use the website to conduct business? A domain name is an important asset you want transferred to you at completion. If the domain name is not transferred, then your customers may continue to visit the seller’s website if you do not make alternate arrangements. If a domain name and website are to be transferred, you should also ensure all intellectual property in the website is also transferred to you. If the website requires any materials to be licensed from third parties, steps should be taken to ensure those licences are assigned to you from completion onwards. You should also consider whether the business has any social media accounts (such as Facebook, Instagram, LinkedIn etc) which should be transferred to you at completion. 5. Employees Does the business have employees? Employees can be critical to a business. In some instances, failing to secure key employees may lead to breakdowns in important relationships or huge gaps in knowledge. This makes it important to identify which employees are critical to the business and why, to enable you to decide whether you should take on some of the seller’s employees or look at ways to replace them to ensure continuity of business. In most instances, sellers are more than happy for you to take their employees to avoid paying redundancies. Most sellers will insist (i) employees be offered employment on terms no less favourable than their existing terms, and (ii) you recognise the transferring employee’s service with the seller. This means you will need to carefully review the existing terms of employment of each employee which you intend to take on. As part of recognising continuity of employment and under legislation, an employee’s accrued entitlements will transfer unless they are paid out before the employee comes across. Please note however long service leave may need to be addressed separately from other types of entitlement as employees may not become entitled to long service leave entitlements until after they join you. This is especially relevant where there are employees who have been with the seller for a significant time and can lead to very complex arrangements being made. You may wish to negotiate a price reduction for the value of the liabilities which you assume as buyer. Please note these are not the only issues to consider when buying a business in the hire and rental industry. Depending on circumstance, these may move into the background as you and your advisors negotiate the purchase. Contact Bartier Perry on 02 8281 7800 or visit website: www.bartier.com.au