In Victoria, when selling a small business valued at $450,000 or less, vendors are required to provide purchasers with a statement that adheres to the requirements of Section 52 of the Estate Agents Act. The statement details the financials of the business for both the current and preceding two years, enabling prospective purchasers to make an informed decision on the ongoing profitability of a business before acquisition.
Section 52 Statements include the following;
A – Information for the vendor
B – Information for the purchaser
C- Business Information
D – Vendor’s business operating report
E – Vendors declaration
F – Acknowledgement of receipt by purchaser
Purchasers of small business’ who are not provided with a complete and or accurate S52 prior to signing are entitled to withdraw from the contract and receive a full refund of the initial deposit. Purchasers must exercise their right to withdraw from the contract within 3 months of signing the contract or before taking possession of the business. Vendors and or real estate agents who provide incomplete/ inaccurate Section 52 statements may be liable for severe financial penalties.