COVID-19 - Updates and Resources

Do you need help with Probate?

Our expert legal team is ready to take your call

Mitchell is a Principal Lawyer of Sharrock Pitman Legal. He is an Accredited Specialist in Business Law (accredited by the Law Institute of Victoria). He also deals with areas of Employment Law, Wills & Estate Planning and Probate and can answer all your questions related to probate.

For further information, contact Mitchell on his direct line:


CALL: (03) 8561 3318

Are you considering buying a business? Read our checklist of important topics to consider before you take the next step.

Buying a Business Checklist:The Buyer

Buying a business can be a risky investment. Care must be taken when determining how you will purchase the business (e.g. sole trader, partnership, trust or company). Factors to consider include your own personal liability, asset protection and the costs involved.

The Contract

Once you receive a copy of the contract (or heads of agreement if the contract is yet to be prepared), we strongly recommend that you obtain legal advice in order to ensure that your interests are protected.

Conditions

If you are obtaining finance to purchase the business, then it may be possible to make the contract conditional upon loan approval. Likewise, if there is a lease for the business premises, then often contracts are subject to approval by the landlord of the transfer lease. In the event that the business you are purchasing sells food or alcohol, then the contract must be conditional upon the appropriate permits and licences being approved or transferred.

The Purchase Price and Due Diligence

When considering what a fair purchase price may be, it is important that you do your due diligence. Due diligence is the process of assessing the important information in relation to the business. This includes information relating to financial records, operations, legal compliance, liabilities and assets, real estate, intellectual property, taxation, employees, licences, permits and insurance.

Please also take into consideration hidden costs which may be incurred when buying a business. For example, you may be required to pay license fees, legal fees, accounting fees, rent, tax and/or insurance.

Business Premises

We recommend that you obtain legal advice regarding the terms of any lease and any transfer of lease. Important considerations include rent, outgoings, the term, options to renew, permitted use of the premises, repair and maintenance obligations and the owners' corporation (if applicable).

If you do not plan on leasing or buying the business premises, then there may be additional tax implications if the business is not sold as a 'going concern'. If a business is sold as a 'going concern', then this means that the business is being sold with all things that are required for the business to continue operating, and that the business continues in operation until the day of settlement. If the business is not being sold as a going concern, then GST may be payable on the purchase price.

Intellectual Property

It is important to identify what intellectual property you are purchasing as part of the contract. There may be trademarks, copyright, patents, software, designs or other intellectual property which will need to be transferred. You may be required to assign or transfer licence agreements.

PPSR

The Personal Property Securities Register ("PPSR") is a national register which records security interests. We recommend that you undertake a search of the PPSR to ensure the assets you are purchasing are not subject to security interests.

Restraints of Trade & Confidentiality

A restraint of trade clause and non-solicitation clause will help to restrict the Vendor from operating a similar business for a certain amount of time within a certain distance, and from soliciting customers, suppliers or referral sources. Restraint of trade clauses can be difficult to enforce, so we therefore recommend that you obtain legal advice regarding such clauses. Always ensure there is a comprehensive confidentiality clause to ensure that the Vendor cannot use confidential information obtained from the business.

Assistance Period

If you think you may need some assistance from the Vendor, then you may be able to negotiate an assistance period prior to signing the contract.

Employees

The Fair Work Act 2009 (Cth) sets out what entitlements and obligations need to be transferred to the new business owner in relation to employees, including enterprise agreements. You will need to ensure that the Vendor has complied with any such agreements in order to avoid potential disputes.

If employees are not going to be reemployed by you, then the Vendor is required to pay the employee their redundancy entitlements. If you reemploy transferring employees, then you must recognise certain previous entitlements. However, an adjustment can be made at settlement to reduce the purchase price for the amount of employee entitlements being transmitted from the vendor.

Any tips?

Be wary of signing heads of agreements or offers of intent prior to obtaining legal advice, otherwise you may be bound to terms which could be detrimental to you.Always seek accounting, financial and legal advice prior to signing a contract of sale of business.Do not rely on representations made by the vendor or the agent.Ensure everything upon which you agree is in writing and included in the contract of sale.This is a complex area of law and each sale of business transaction needs to be customised.

For further guidance, please feel free to give Mitchell Zadow, Managing Principal and Accredited Commercial Law Specialist, a call on (03) 8561 3318.

The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.

Liability limited by a scheme approved under Professional Standards Legislation.

Written by one of our lawyers

,

.

Mitchell Zadow

For further information contact

Mitchell Zadow

Mitchell is the Managing Principal of our law practice.

He is an Accredited Specialist in Commercial Law (accredited by the Law Institute of Victoria). He also deals with areas of Employment Law, Wills & Estate Planning and Probate. For further information, contact Mitchell on his direct line (03) 8561 3318.

More on

Commercial Law

Are you considering buying a business? Read our checklist of important topics to consider before you take the next step.

However, in this article we will set out the factors that influence how long it will take to obtain a Grant of Probate and to administer an estate in Victoria.

The basics

First things first: what is a Grant of Probate? A Grant of Probate is effectively a document issued by the Supreme Court of Victoria which formally authorises an executor to manage the estate of a deceased person in accordance with their Will. Without Probate, the asset holders (say a bank or share registry) cannot be satisfied as who has the correct authority to receive the deceased's assets and may refuse to pay out.

Sometimes, for smaller estates or if assets are mostly jointly owned with a surviving spouse, asset holders might agree to release payment without requiring a Grant of Probate. This is usually on the basis that the person who receives payment promises to repay (or Indemnify) the asset holder if it turns out they paid to the wrong person.

If there is no Will, then you cannot obtain a Grant of Probate. Instead you obtain Letters of Administration. This is effectively the same, in terms of authorising someone to administer the estate, and would usually be obtained by the person who is the closest next-of-kin to the deceased.

“A Grant of Probate is effectively a document issued by the Supreme Court of Victoria which formally authorises an executor to manage the estate of a deceased person in accordance with their Will.”

Timeframes for Probate in Victoria

In order to obtain a Grant of Probate, the Court needs to be given information about the assets and liabilities of the estate, the deceased person, the witnesses to the Will, the executors and the Will itself. An advertisement of your intention to apply for Probate must also be placed on the Supreme Court website for at least 14 days prior to any application.

Often, making enquires to obtain all the necessary information can take a number of weeks. Also, you will need the Death Certificate for the application for Grant of Probate and possibly for making proper enquires regarding the assets and liabilities. Waiting for the Death Certificate to issue can therefore add a few more weeks to the process. Overall, if you have your application for Grant of Probate lodged within 1 to 2 months from the date of death, you are making timely progress.

The Court itself does not take long to process the application (maybe another 1 to 2 weeks) and this is done 'on the papers'. This means you do not have to go to a court hearing. There is also a general discretion for the Court to issue a 'Requisition' asking that you provide more information before they process the application and this can delay matters.

“Overall, if you have your application for Grant of Probate lodged within 1 to 2 months from the date of death, you are making timely progress.”

So, here we are a few months after death and you finally have a Grant of Probate. It is important to remember that this is the start of the estate administration and not the end. For a very simple estate, you might only need a further month or so to cash the assets and pay them to the correct beneficiaries. However, it can often be more complex than that. Factors that determine the timeframe to administer the estate include:-

  • Some assets will take time to cash or transfer. For example, if selling a property, final settlement might be 60/90/120 days from the day of sale.
  • There is a 6 month period for challenges to be brought against the estate and executors must wait until this period expires before distributing the estate, if there is any risk that a disgruntled family member might come forward.
  • There might need to be final tax returns for the deceased or for the estate. Failing to wait for the ATO to process these could leave the executor personally liable for a tax bill.
  • You might need to advertise for creditors to come forward and wait for a period of months while this advertising timeframe expires. This protects the executor if they are unsure of all of the deceased's financial dealings and creditors.
  • It might not always be a good time to immediately cash estate assets. For example, the shares just took a nose-dive, do you still sell regardless of available price?

There is a general rule that executors have an 'executor's year' to complete the estate administration. This means that you should be aiming to have the estate finalised and distributed within 12 months from the date of death.

The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.

Liability limited by a scheme approved under Professional Standards Legislation.

Need help with Probate?

Our expert legal team is ready to take your call!

Mitchell is a Principal Lawyer of Sharrock Pitman Legal. He is an Accredited Specialist in Business Law (accredited by the Law Institute of Victoria). He also deals with areas of Employment Law, Wills & Estate Planning and Probate and can answer all your questions related to probate.

For further information, contact Mitchell on his direct line:

DIRECT LINE: 
(03) 8561 3318

Download our FREE legal guide to Probates & Estates in Australia

GET YOUR FREE DOWNLOAD

Enter your details

Thanks for your interest! 

Here's your download:
DOWNLOAD PDF
Oops! Something went wrong while submitting the form.

Could your business do with a “health check”?

Fill in our survey about the legal health of your business and get 30 minutes FREE legal advice!

FILL OUT SURVEY NOW

About Sharrock Pitman Legal

For fifty years Sharrock Pitman Legal has made a significant and long term contribution to meeting the legal needs of business owners and residents in the City of Monash and greater Melbourne area.