๐๐จ ๐๐จ๐ฎ ๐๐๐๐ ๐ ๐๐๐๐ญ๐ข๐จ๐ง ๐๐ ๐๐๐ง๐๐จ๐ซ ๐๐ญ๐๐ญ๐๐ฆ๐๐ง๐ญ ๐๐ก๐๐ง ๐๐๐ฅ๐ฅ๐ข๐ง๐ ๐ ๐๐ฎ๐ฌ๐ข๐ง๐๐ฌ๐ฌ ๐ข๐ง ๐๐ข๐๐ญ๐จ๐ซ๐ข๐?
๐ ๐๐จ ๐๐จ๐ฎ ๐๐๐๐ ๐ ๐๐๐๐ญ๐ข๐จ๐ง ๐๐ ๐๐๐ง๐๐จ๐ซ ๐๐ญ๐๐ญ๐๐ฆ๐๐ง๐ญ ๐๐ก๐๐ง ๐๐๐ฅ๐ฅ๐ข๐ง๐ ๐ ๐๐ฎ๐ฌ๐ข๐ง๐๐ฌ๐ฌ ๐ข๐ง ๐๐ข๐๐ญ๐จ๐ซ๐ข๐?
Selling a business in Victoria can be complex, and many owners are confused about whether a Section 52 Vendor Statement is required. While commonly associated with business sales, this requirement actually applies only in specific situations.
Understanding your legal obligations can help you avoid disputes, delays, and costly mistakes.
๐ ๐๐๐ฒ ๐๐๐ค๐๐๐ฐ๐๐ฒ๐ฌ
โ๏ธ Section 52 statements apply only to certain small business sales
โ๏ธ Not required for most larger business transactions
โ๏ธ Full disclosure is still legally required under Australian Consumer Law
โ๏ธ Buyers expect complete financial and operational transparency
โ๏ธ Proper preparation increases trust and sale value
๐ ๐๐ก๐๐ญ ๐๐ฌ ๐ ๐๐๐๐ญ๐ข๐จ๐ง ๐๐ ๐๐๐ง๐๐จ๐ซ ๐๐ญ๐๐ญ๐๐ฆ๐๐ง๐ญ?
A Section 52 Vendor Statement (Victoria) is a disclosure document required under the Estate Agents Act 1980 for certain small business sales.
โ๏ธ When It Applies:
๐ If the total price of goodwill + plant + equipment is $450,000 or less
๐ What It Includes:
โ๏ธ Profit & Loss statements (last 2 years)
โ๏ธ List of assets (equipment, fixtures, fittings)
๐ It must be provided before signing a contract or paying a deposit
โ ๏ธ Failure to provide it allows the buyer to cancel the contract within 3 months
โ ๐๐จ ๐๐จ๐ฎ ๐๐๐๐ ๐๐ญ ๐๐จ๐ซ ๐๐ฅ๐ฅ ๐๐ฎ๐ฌ๐ข๐ง๐๐ฌ๐ฌ ๐๐๐ฅ๐๐ฌ?
๐ซ No โ Not Always
A Section 52 statement is NOT required if:
โ๏ธ Sale price exceeds $450,000
โ๏ธ Transaction is governed by a standard business sale agreement
๐ However, full disclosure is still mandatory
โ๏ธ ๐๐๐ ๐๐ฅ ๐๐ข๐ฌ๐๐ฅ๐จ๐ฌ๐ฎ๐ซ๐ ๐๐๐ช๐ฎ๐ข๐ซ๐๐ฆ๐๐ง๐ญ๐ฌ ๐ข๐ง ๐๐ข๐๐ญ๐จ๐ซ๐ข๐
Even without Section 52, sellers must comply with Australian Consumer Law.
โ๏ธ You Must Disclose:
๐ Financial performance (2โ3 years)
๐ BAS & tax records
๐ข Lease agreements & conditions
๐ฅ Employee entitlements
๐ Licences & permits
โ ๏ธ Any liabilities or risks
๐ Misleading or hiding information can lead to legal action or contract termination
๐ ๐๐๐ฒ ๐๐จ๐๐ฎ๐ฆ๐๐ง๐ญ๐ฌ ๐๐๐ช๐ฎ๐ข๐ซ๐๐ ๐๐จ ๐๐๐ฅ๐ฅ ๐ ๐๐ฎ๐ฌ๐ข๐ง๐๐ฌ๐ฌ
To ensure a smooth sale, prepare:
โ๏ธ Business Sale Agreement (lawyer drafted)
โ๏ธ Financial statements (2โ3 years)
โ๏ธ Asset register
โ๏ธ Lease agreement & landlord approval
โ๏ธ Employee records
โ๏ธ Licences & permits
โ๏ธ Supplier contracts
โ๏ธ Intellectual property details
โ๏ธ ๐๐ญ๐๐ฉ-๐๐ฒ-๐๐ญ๐๐ฉ ๐๐ซ๐จ๐๐๐ฌ๐ฌ ๐๐จ ๐๐๐ฅ๐ฅ ๐ ๐๐ฎ๐ฌ๐ข๐ง๐๐ฌ๐ฌ
1๏ธโฃ Prepare Financial Records
Ensure all accounts, BAS, and tax lodgements are up to date
2๏ธโฃ Review Business Structure
Confirm ABN, GST, licences, and ASIC details
3๏ธโฃ Check Lease Agreement
Understand terms and get landlord approval
4๏ธโฃ Prepare Disclosure Documents
Include Section 52 (if applicable) or due diligence pack
5๏ธโฃ Negotiate & Sign Agreement
Legal contract drafted by a professional
6๏ธโฃ Transfer Ownership
Assets, licences, and registrations transferred at settlement
โ ๐๐ฑ๐๐ฆ๐ฉ๐ฅ๐: ๐๐๐ฅ๐ฅ๐ข๐ง๐ ๐ ๐๐๐๐ ๐ข๐ง ๐๐๐ฅ๐๐จ๐ฎ๐ซ๐ง๐
A cafรฉ is sold for $250,000:
โ๏ธ Goodwill: $150,000
โ๏ธ Equipment: $80,000
โ๏ธ Stock: $20,000
๐ Since goodwill + equipment = $230,000 (< $450K)
โ Section 52 statement is required
โ๏ธ Seller provides financials + lease
โ๏ธ Buyer completes due diligence
โ๏ธ Sale proceeds smoothly
โ ๏ธ ๐๐จ๐ฆ๐ฆ๐จ๐ง ๐๐ข๐ฌ๐ญ๐๐ค๐๐ฌ ๐๐จ ๐๐ฏ๐จ๐ข๐
โ Hiding declining revenue
โ Ignoring lease transfer rules
โ Incomplete asset lists
โ Not calculating employee entitlements
โ Skipping professional advice
๐ Transparency and preparation are key to success.
โ ๐ ๐๐๐ฌ
Is Section 52 required for all business sales?
No โ only if sale value is โค $450,000.
Can buyers cancel due to non-disclosure?
Yes โ under Australian Consumer Law.
Does GST apply to business sales?
Often GST-free if sold as a going concern.
How long does a sale take?
Typically a few weeks to several months.
๐ค ๐๐๐ญ ๐๐ฑ๐ฉ๐๐ซ๐ญ ๐๐๐ฅ๐ฉ ๐๐ซ๐จ๐ฆ ๐๐ฎ๐ฉ๐๐ซ๐ญ๐๐ฑ
Selling a business involves tax, compliance, and financial complexities. At Supertax, we ensure your sale is smooth, compliant, and maximises value.
โ๏ธ Business sale tax planning
โ๏ธ Financial statement preparation
โ๏ธ GST & going concern advice
โ๏ธ Due diligence support
โ๏ธ Compliance with ATO & legal requirements
๐ Let our experts guide you through every step.
๐ ๐๐จ๐ง๐ญ๐๐๐ญ ๐๐ฎ๐ฉ๐๐ซ๐ญ๐๐ฑ
๐ Phone: (03) 7074 8818
๐ง Email: info@supertax.com.au
๐ Website: https://supertax.com.au/
๐ Address: Suite 1, 7 Bridge St, Werribee Victoria 3030, Australia
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