If you’re buying or selling a business with employees you should always negotiate who will bear the cost of accrued staff entitlements, such as annual leave, sick pay or long service leave, and factor this into the sale or purchase price. The obligation to pay these entitlements will move to the new owner.
Staff can often be a business’s most important asset, so if you’re buying a business you should also take into account any inducements you may need to pay to get key staff to stay on, as well as any fringe benefits tax obligations that may arise. You should also make sure staff, including the former owner, don’t use the business’s confidential information or set up in competition with you once they leave.
Contact us to learn how we can help you protect yourself against this eventuality.