Conditions Precedent Checklist for Buying a Business in Australia

Conditions Precedent Checklist — Buying a Business in Australia

How to use this checklist: As soon as you sign a conditional sale contract, transfer each condition to a tracking document with the satisfaction deadline, the responsible party, and the current status. Review it weekly during the CP period with your solicitor.

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Part 1: Finance Conditions

• Finance application submitted — Deadline to submit: ___ / ___ / ___. Application lodged with lender including all supporting documents (business financials, personal tax returns, business plan). Broker or bank contact: _______________
• Unconditional finance approval obtained — Deadline in contract: ___ / ___ / ___. Approval must be in writing, unconditional, and cover the purchase amount, security, and loan term. Date received: _______________
• Finance condition notice served on seller — Written notice of satisfaction served to the seller's solicitor by the contract deadline. Method: email or post per contract. Date served: _______________
• Security documentation signed — Mortgage, director's guarantee, and any business security agreement signed and returned to the lender. Date completed: _______________
• Solicitor confirms finance condition is satisfied — Written confirmation on file. Date: _______________

If finance is rejected or delayed:

• Contact the seller's solicitor immediately to request a written extension (typically 5-10 business days)
• Broker approaches alternative lenders in parallel
• If a second lender cannot be secured in time, assess whether the contract is terminable and whether your deposit is refundable
• Consider whether vendor finance can bridge part of the gap — see also the vendor finance negotiation checklist

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Part 2: Property and Lease Conditions

• Identify lease assignment requirements — Review the existing lease for assignment clauses. Confirm whether landlord consent is required, what documents are needed, and whether a personal guarantee is expected. Date reviewed: _______________
• Lease assignment application lodged with landlord — Deadline: ___ / ___ / ___. Application sent with all required documents (company registration details, financials, guarantor details). Date lodged: _______________
• Landlord consent received in writing — Written consent specifying any conditions on the assignment (e.g., guarantee, rent increase). Date received: _______________
• New lease terms agreed (if landlord is granting a new lease rather than assigning) — Key terms reviewed: term, rent, options, make-good. Solicitor has reviewed new lease: Yes / No. Date: _______________
• Personal guarantee provided (if required) — Signed guarantee provided to the landlord in the form required. Guarantor(s): _______________
• Lease bond or security deposit lodged (if required) — Amount: $ _______________ Date paid: _______________
• Solicitor confirms lease condition satisfied — Written confirmation on file. Date: _______________

If landlord delays or refuses:

• Establish the reason — slow processing vs. substantive refusal
• Request a contract extension from the seller
• If refusal is based on financial position, consider offering a stronger guarantee or additional bond
• If refused outright, assess grounds to terminate and recover deposit with solicitor

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Part 3: Regulatory and Licence Conditions

(Complete for each licence or permit required to trade)

• Full list of required licences identified — With your solicitor, list every licence, permit, or registration needed to operate the business legally in your name or entity. See also the licences and permits due diligence checklist. List:
  • Licence 1: _______________ Issuing authority: _______________
  • Licence 2: _______________ Issuing authority: _______________
  • Licence 3: _______________ Issuing authority: _______________
• Licence transfer or new application lodged — Date lodged for each:
  • Licence 1: ___ / ___ / ___
  • Licence 2: ___ / ___ / ___
  • Licence 3: ___ / ___ / ___
• Interim authority obtained (if applicable) — For liquor licences and similar, an interim authority allows you to trade while the full transfer is processed. Applied: Yes / No. Granted: ___ / ___ / ___
• Written acknowledgement from regulatory body received — Date: _______________
• Licence transfer completed or formal confirmation of eligibility received — Date: _______________

State-by-state notes:

Liquor licences: NSW (OLGR), VIC (VGCCC), QLD (OLGR), WA (Director of Liquor Licensing), SA (Consumer and Business Services), TAS (Commissioner for Licensing). Allow 4-8 weeks minimum. Interim trading authorities vary by state.

Trade licences (plumbing, electrical, gas, building): these are held by individuals, not businesses — they cannot be transferred. As incoming owner, you must hold your own relevant licence or engage a licensed supervisor in a compliant employment arrangement. Confirm with the relevant state licensing board before signing the contract, not after.

Pest control: APVMA registration and state licensing requirements apply. Contact the relevant state authority early — these can take weeks.

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Part 4: Key Employee Conditions

• Named employees identified in sale contract — Review contract carefully for any employees whose retention is a condition of sale. Names: _______________
• Employment offer letters prepared — New contracts prepared in your entity's name by your solicitor or HR advisor. Date prepared: _______________
• Meetings held with each named employee — Introductory conversation about the transition, new role, and terms. See the staff communication scripts for guidance.
  • Employee 1: _______________ Meeting date: ___ / ___ / ___
  • Employee 2: _______________ Meeting date: ___ / ___ / ___
• Employment agreements signed by each named employee — Contract deadline: ___ / ___ / ___
  • Employee 1: _______________ Signed: ___ / ___ / ___
  • Employee 2: _______________ Signed: ___ / ___ / ___
  • Employee 3: _______________ Signed: ___ / ___ / ___
• Solicitor confirms employment condition satisfied — Written confirmation. Date: _______________

If a named employee declines to sign:

• Understand the reason — often it's about role, salary, entitlements, or uncertainty about the new owner
• Assess whether the issue is negotiable within reasonable parameters
• Request an extension from the seller to allow renegotiation time
• If the employee won't sign regardless, assess materiality: is this person critical to the business's revenue or operations? If yes, you may have grounds to renegotiate purchase price or terminate

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Part 5: Franchisor Conditions

(Complete this section only if buying a franchise or a licensed business)

• Franchisor application submitted — Deadline: ___ / ___ / ___. Application with all supporting documents (financials, references, business plan). Date submitted: _______________
• Franchise disclosure statement received and reviewed — You are entitled to a current disclosure statement before approving. Solicitor has reviewed: Yes / No. Date: _______________
• Discovery day or formal interview completed — Date: ___ / ___ / ___. Outcome: _______________
• Franchisor approval granted — Written approval received. Date: _______________
• New franchise agreement signed — Signed by you and the franchisor. Date: _______________
• Transfer fee paid — Amount: $ _______________ Date: _______________
• Franchisor induction or training completed (if required) — Dates: _______________

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Part 6: Due Diligence Satisfaction

(Complete this section if satisfactory due diligence is an explicit condition in your contract)

• Due diligence start date confirmed — ___ / ___ / ___
• Due diligence end date (deadline to serve satisfaction notice or terminate) — ___ / ___ / ___
• All due diligence workstreams completed — Financial, legal, operational, tax, insurance, employment. Each specialist has provided a written report or sign-off:
  • Financial DD: completed ___ / ___ / ___
  • Legal DD: completed ___ / ___ / ___
  • Tax DD: completed ___ / ___ / ___
  • Operational DD: completed ___ / ___ / ___
  • Employment DD: completed ___ / ___ / ___
  • Insurance DD: completed ___ / ___ / ___
• Material issues identified and addressed — None / Issues renegotiated (detail below):
  • Issue 1: _______________ Resolution: _______________
  • Issue 2: _______________ Resolution: _______________
• DD satisfaction notice served to seller's solicitor — Or termination notice if not proceeding. Date: _______________

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Part 7: No Material Adverse Change (MAC)

(Complete this section if your contract includes a MAC condition)

• MAC definition reviewed — Understand exactly what constitutes a MAC under your contract. Note: _______________
• MAC monitoring system in place — Revenue tracking, key customer contact, staff roster review at regular intervals. Frequency: weekly / fortnightly
• No MAC events identified during CP period — Confirmed with seller in writing at: ___ / ___ / ___ and ___ / ___ / ___
• MAC confirmation obtained at pre-settlement — Your solicitor has obtained a formal MAC confirmation from the seller as part of settlement requirements. Date: _______________

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Part 8: Seller Obligations During the CP Period

• Business operating in ordinary course — Confirmed with seller by phone or email at regular intervals. Dates checked: _______________
• No significant new contracts signed — Confirmed in writing. Date: _______________
• No key staff departures or unexpected new hires — Confirmed with seller. Date: _______________
• Stock levels maintained (if minimum levels are specified in the contract) — Verified: ___ / ___ / ___
• No equipment disposed of — Confirmed with seller. Date: _______________
• No additional debt or security interests created — Confirm via PPSR search shortly before settlement. Searched: ___ / ___ / ___

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Part 9: Extensions and Waivers

• Extension request process understood — Review the contract for how extensions must be requested (written notice required? To whom? Within what timeframe?). Note the mechanism: _______________
• Any extensions documented as formal written variations — Not emails alone — a properly executed variation signed by both parties. Date(s) of extensions: _______________
• Waiver implications understood — You may waive a condition in your favour if it suits you to proceed. Understand that waiver is generally irrevocable. Solicitor has confirmed waiver process: Yes / No
• All waiver notices served correctly — Per the contract's notice provisions. Date(s): _______________

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Part 10: CP Period Master Tracker

Review this tracker weekly with your solicitor during the CP period.

Finance approval

• Deadline: _______________ Responsible: Buyer / Broker / Lender
• Status: Not started / In progress / Satisfied / Extension requested / Waived

Landlord or lease consent

• Deadline: _______________ Responsible: Buyer / Solicitor / Landlord
• Status: Not started / In progress / Satisfied / Extension requested / Waived

Licence transfer — _______________

• Deadline: _______________ Responsible: Buyer / Solicitor / Regulator
• Status: Not started / In progress / Satisfied / Extension requested / N/A

Key employee agreements

• Deadline: _______________ Responsible: Buyer / HR Advisor
• Status: Not started / In progress / Satisfied / Extension requested / N/A

Franchisor approval

• Deadline: _______________ Responsible: Buyer / Franchisor
• Status: Not started / In progress / Satisfied / Extension requested / N/A

Due diligence satisfaction

• Deadline: _______________ Responsible: Buyer / DD Specialists
• Status: Not started / In progress / Satisfied / Extension requested / Waived

Additional condition — _______________

• Deadline: _______________ Responsible: _______________
• Status: Not started / In progress / Satisfied / Extension requested / N/A

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Next step: Once all conditions are satisfied, your solicitor coordinates with the seller's solicitor to set the settlement date and prepare the settlement statement. See the pre-settlement checklist and settlement day checklist for what comes next.

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This checklist is a practical guide only, not legal advice. Every contract is different. Engage a commercial solicitor experienced in business acquisitions to review your specific contract and advise on your obligations before, during, and after the CP period.