How to sell or buy a business with a QBCC Licence

#TransferQBCCLicence

Are you looking to buy a business which requires a QBCC Building Licence but the problem is that you don’t already have one or perhaps you don’t have the time to meet the requirements? When looking to buy or sell a business in the building industry it doesn’t have to be as difficult as it looks. It just requires a bit of creative deal making.

The simplest solution, which the conservative accountant and solicitor will caution you on, is where the option is to take over an existing Company which holds a QBCC licence. They will instantly tell you this is a bad idea as it “may” come with “skeletons”.

In other words, it “may” have existing encumbrances and liabilities attached to the Company such as a property, vehicles, loans etc. (as you can expect when you’re being tax effective); but what if the Company is FREE of encumbrances and liabilities? As long as the Company is checked over and free of encumbrances and liabilities it’s by far the easiest solution that the conservative Accountant and Solicitor will avoid, but rather than being helpful they will rather put up road blocks in case they missed something.

What are you paying your solicitor and accountant for if they can’t run checks for you and can’t draft up a Contract of Sale which protects you? For example, the Contract might include a clause along the lines of “the Company must be free of encumbrances and liabilities on Completion of Sale and any encumbrances and liabilities incurred prior to the date of Completion are the responsibility of the seller and the buyer is indemnified of such liabilities” (we are paraphrasing to keep it short and simple).

In our experience, buyers and sellers have successfully taken over Companies free of encumbrances and liabilities and they’ve never looked back! Not only can you take over an existing Company with a proven track record but you can also take over the Company’s QBCC Licence. The only thing that changes is the name of the Director (the seller relinquishes their role as Director on Completion, and the buyer is appointed the new Director).

Being conservative is smart but we believe that being smart is even smarter!

DISCLAIMER
This is an opinion and should not be taken as professional or legal advice. Each person should assess this scenario on a case by case scenario along with professional legal and financial advice. We can help structure and negotiate a Contract of Sale which works for you and you can always run it past your accountant and solicitor to satisfy yourself that everything is in place.