Unconditional to settlement checklist

Legal and financial structure

• Register a new company

  Almost all NZ business sales are asset sales. You are purchasing the business assets into a new company, not taking over the vendor's existing entity. The vendor keeps their current company along with its debts, liabilities, and accounts receivable. Your new company starts with a clean slate. Allow a few days for registration and agree the company name and structure with your accountant before proceeding. You can register online at the Companies Office.

• Register for GST if your turnover will exceed the threshold

  Most business purchases of any size will require GST registration. If you do not register for GST you may have to pay GST on top of the purchase price. Your accountant will advise. Registration can be done online through the IRD or at the same time as registering your company.

• Set up accounting package ready to take over from settlement day

  Whether you are continuing with the vendor's existing system (Xero, MYOB, etc.) or moving to a new one, have it configured and ready to go. Arrange any data migration with your accountant in advance.

• Set up bank accounts so customers can pay from day one

  Business bank accounts can take longer to open than personal accounts. Start this process early. If the business uses bank account direct debits, ensure these are ready to transfer.

• Set up payment gateways and EFTPOS facilities

  EFTPOS machines may need to be transferred or new ones ordered. Online payment gateways (Stripe, PayPal, etc.) need to be set up under the new entity. Allow time for merchant facility approvals if applicable.

Accounts and software to set up or transfer after settlement

• Power, gas and utilities

• Business phone and internet

• Email accounts and domain hosting

  Most of these accounts transfer after settlement rather than before. Business email addresses and the company website domain need to be transferred to the new owner. Involve your IT provider early as this can take time and cause disruption if rushed.

• Accounting software (Xero, MYOB, or similar)

• CRM and customer management software

• Inventory management software

• Point of sale system

• Payroll software (Smartly, PayHero, or similar)

• Google Business Profile and any other directory listings

  Access to manage the business's Google Business Profile needs to be transferred. Same for any trade directory listings, Yelp, Facebook business page, Instagram, and similar profiles.

• Social media business accounts

• Health and safety compliance platform (if applicable)

• Alarm and security monitoring accounts

• Insurance policies (public liability, vehicle, contents, etc.)

  Ensure cover is in place from settlement day. Do not assume existing policies automatically transfer. Speak with an insurance broker in advance.

• Any industry-specific software or licences

• Vendor notifies staff of the sale

  The vendor should communicate clearly and reassuringly. Staff need to feel respected and well informed throughout this process. Give them the opportunity to ask questions and understand what the change means for them.

• Buyer meets all staff and introduces themselves

  This introduction should happen as soon as possible after the announcement. The new owner sets the tone. A calm, confident, and genuine introduction goes a long way.

• New employment contracts are discussed, issued, and signed

  Staff are made technically redundant by the vendor at settlement and re-engaged by the buyer. New contracts should reflect similar terms and conditions. Involve an employment lawyer if you are unsure of your obligations.

• Vendor makes staff technically redundant at settlement

  This is the standard process for a business ownership transfer, though the specifics can vary depending on the situation and existing employment contracts. Talk with your lawyer or HR advisor to ensure the process is handled correctly for your circumstances.

• Holiday pay, leave entitlements, and any outstanding wages are settled

  Depending on contracts and employee choices, entitlements can be transferred to the new employer or paid out at settlement. The settlement statement should account for any amounts involved. Confirm the approach with your accountant and lawyer.

• Payroll is set up under the new entity ready for the next pay run

• Stocktake completed on settlement day

  The stocktake is typically done on the morning of settlement. Any variance from the agreed stock value is adjusted in the settlement statement. Both parties or their representatives should be present.

• All vehicles are up to date with WOF, rego, and RUCs

  Check every vehicle on the asset list. Any that are overdue need to be remedied before settlement.

• All assets on the asset list are in good condition and confirmed unencumbered

  Your lawyer will complete a PPSR (Personal Property Securities Register) search to confirm there are no finance charges over the assets being sold. Any encumbrances must be discharged before settlement.

• Leased equipment is ready to be transferred (EFTPOS, printers, vehicles, etc.)

  Contact each lessor to arrange the transfer of leased items to the new owner. Some leases allow assignment; others require a new agreement. Allow time for credit checks if required.

• Lease assignment or new lease finalised with the landlord

  The landlord's consent is usually required to assign a lease. This process can take time and sometimes involves a credit assessment of the incoming tenant. Start early. If a new lease is being negotiated, allow adequate time for review by both parties' lawyers.

• Deposits, work in progress, and prepayments identified and quantified

  Any money the vendor has received in advance (deposits from customers, annual subscriptions, prepaid services) needs to be accounted for in the settlement statement, as the buyer will be responsible for fulfilling those obligations.

• Work in progress valued and included in settlement statement

• Rent, rates, and other periodic costs prorated to settlement date

• Final settlement statement agreed by both parties' lawyers

• Settlement funds confirmed and ready for transfer

• All accounts transferred to new owner and payment details updated

  Go through the full list of accounts and subscriptions systematically. Automated payments coming out of the vendor's accounts need to be updated immediately to avoid disruption.

• Key supplier introductions completed

  For major suppliers, a joint introduction from the vendor and buyer is ideal. For everyday suppliers it is usually just a matter of filling out a new account application. The vendor should make themselves available to facilitate these introductions during the handover period.

• Key client introductions completed

  Clients generally care about the quality of service they receive, not who owns the business. A warm, joint introduction from the vendor and buyer reassures clients and protects those relationships. This is rarely as big an issue as buyers fear. See the concerns guide for more on this.

• Access and login credentials transferred for all systems

  Passwords, admin access, and logins for all software, platforms, and accounts should be formally transferred. Update all credentials after access is confirmed.

• Any exclusive supplier, franchise, or distribution agreements formally transferred or renegotiated

• Handover period underway and knowledge transfer progressing

  The handover period (typically around four weeks for straightforward businesses) is the vendor working alongside the new owner to transfer knowledge, relationships, and day-to-day processes. Make the most of this time.