Offer to Purchase Document

[AmithS]

Hi Everyone,

Thanks for the advice, as this is my first time going into business its quite scary.

Lucky i have some good advice on this forum

[Dave A]

as this is my first time going into business its quite scary.

All the more reason to have a lawyer watching your back, especially seeing as you are buying a business. I'd hate to hear you'd been taken for a ride one day. If you look at the money in play, the cost of legal help is small potatoes.

[AmithS]

Another quick Q:

On sale of a business the price is the price or is there VAT on top of the price offered ?

Thanks everyone!

[garthu]

free hold, share block and sectional title?

Generally yes. you "could" use a generic but a little dodgy. I use the word generally cause (now i slate my line of work) most agents dont have seperate agreements. We use a sectional, freehold, development contract. The minor issues are usage areas, rates, taxes, levy, acceptance of rules etc.

The scary bit. I reckon 90% of written offers are incorrect or mistakes big enough to cause real issues (inadequate training). Many conveyancers let them ride simply as to get them really correct through the agents probably enough to lose hair over. It's fine and goes through ok - until one of the party's decide to breach, then those little mistakes become very expensive

[Morticia]

Could be either and this aspect must be clarified upfront - depending on whether seller is registered VAT vendor or not. Then it could also be a standard supply @ 14% or a zero rated supply if sale is on "going concern" basis. It is a requirement of the VAT Act that if the sale is "going concern", then your agreement must specify clearly that the supply is INCLUSIVE of VAT at zero %.

I strongly agree with Dave's previous posting - rather spend extra money on obtaining decent legal AND accounting advice - just the VAT implications alone in an incorrectly worded OTP can cause you severe financial hardship.

[AmithS]

Thanks Morticia, much appreciated

[duncan drennan]

Something to consider with a service station: in many cases the service station property (including pumps, etc.) is owned by the fuel company (I know this is, or at least was, the case with Caltex service stations). In those cases the property is rented from the fuel company by the business, and what is actually up for sale is effectively the goodwill of the business, rather than the property.

[AmithS]

Hi Duncan,

You are correct; therefore the lease is a very important aspect of the sale.

Also i think it is due to this reason that their is no VAT payable as their are no assets?

[Yvonne]

I can promise you that having legal advice - is not only necessary - it is essential.

Take this from someone who I think is the walking textbook case of "how not to".

The smallest wording in a legal document, when you have no understanding of the terms - can be overlooked.

"Tenancy is not conferred" - those few words placed us in a "blackmail" situation, leading to a substantial loss.

I would NEVER consider not using a lawyer to look after my interests.

If you cannot afford the lawyer, sorry this is a personal opinion, then you are not in a position to risk buying at this time.

Yvonne

[Marshini]

Hi there,

I am in search of the exact same thing, please could I ask for your help?

Offer to purchase for the Sale of a Diesel Depot.

Kind Regards
Marshini