Top 5 legal tips when buying a business

Thanks to our friends at eBroker for the opportunity to share our top legal tips when buying a business. Stay tuned for our top legal tips when selling a business.

If you need any legal advice on either selling or buying a business, please get in touch with one of the Sierra Legal team (

The article is available on the website of eBroker -

Earnout protection mechanisms for business sale agreements

In a post a couple of weeks ago (click here), I gave 5 tips for sellers of businesses in relation to earnouts. As most of you will know, an earnout is the right of a seller to receive additional compensation in the future if the business that was sold achieves certain financial goals after completion of the sale (e.g. earnings over a specified threshold level).

In this week’s post, I suggest some specific earnout protection mechanisms that sellers could try to include in business sale agreements that contain earnout provisions.

Sierra Legal on video with VANA - the Victorian Association for Newsagents

It was lights, camera and action for Craig Sanford at VANA, as he was interviewed by VANA’s General Manager, Brendan Tohill, in a recent "video newsletter" - see below for a snippet of the action! VANA is an important client of Sierra Legal, and we are also promoted by VANA as a preferred supplier of legal services for newsagency businesses that are members of the Association.

View here

5 important things to remember for earnouts when selling your business

Author: Craig Sanford, Director

When it comes time to sell your business, a large part of the negotiations will often be around the terms of an "earnout" - that is, the right of the seller to receive additional compensation in the future if the business achieves certain financial goals after completion of the sale (e.g. earnings over a specified threshold level). Based on my experience over the last 26 years buying and selling businesses, here are a few tips for sellers in relation to earnouts.

Acquisition of Allstates Vehicle Logistics

Sierra Legal would like to congratulate the purchaser of Allstates Vehicle Logistics Pty Ltd (also known as "Spiral Logistics"), on its recent acquisition of the company.  Allstates is a leading Australian logistics company for specialised freight, and focuses on providing transport services to the steel industry in Victoria, New South Wales and Queensland.  Sierra Legal advised the purchaser on legal aspects of the acquisition, including due diligence, negotiation of the legal documents and completing the transaction.  We look forward to following the progress of Allstates under its new management team as it drives forward with some exciting plans to enhance its service offering and further develop and grow the business throughout Australia.

Personal Property Securities Register Update - Time to renew security registrations

The Personal Property Securities Register (PPSR) began operating on 30 January 2012, and therefore, its 7-year anniversary fast approaches.

Since the default registration period on the PPSR starts at 7 years, many security interests that were registered soon after the commencement of the PPSR for the default 7-year registration period, will begin to expire from January 2019.  It is estimated that more than 100,000 registrations could fall in this category.

Sale of Trout River Australia to MaxiTRANS

Sierra Legal would like to congratulate Australasian Machinery Sales Pty Ltd (AMS), which operates the “Trout River Australia” business, on completion of its sale to MaxiTRANS Australia Pty Ltd, a subsidiary of MaxiTRANS Industries Limited (ASX:MXI).

Trout River Australia is a leading Australian manufacturer and supplier of live bottom trailers in Australia, and MaxiTRANS is one of Australia’s largest suppliers of truck and trailer parts to the road transport industry in Australia.

The sale of AMS will be completed in 2 tranches.  The first tranche (being the acquisition of 80% of the issued shares in AMS) was completed on 12 December 2018.  The second tranche (being the acquisition of the remaining 20% of the issued shares in AMS that are not owned by MaxiTRANS) is expected to be completed around 30 June 2021 under an earn-out arrangement.

Sierra Legal assisted AMS and its founding shareholders on all aspects of the sale to MaxiTRANS, including:

  • legal due diligence;

  • drafting and negotiating transaction documents; and

  • assistance with completion of the first tranche of the sale.

For more information, please contact Craig Sanford, Michael Jeffery or Ken Gitahi at Sierra Legal.

Welcome to a completely new way of receiving legal services

Sierra Legal is now offering 3 new products aimed at increasing the accessibility of top-quality legal advice for businesses of all sizes.

  • Sierra Monthly Plan - Under a Sierra Monthly Plan, Sierra Legal provides expert corporate and commercial legal advisory services for a fixed monthly fee, rather than the traditional method of charging clients based on the number of hours spent providing those services.
  • Sierra Virtual - Sierra Virtual provides on-call, flexible and experienced legal counsel for in-house legal teams that are under-resourced, or under pressure due to busy periods or staff absences, or to corporate law firms who may need additional resources during large projects.
  • Free Contract Health Check - A Free Contract Health Check can help give you peace of mind by confirming that you have an effective and compliant contract or other legal document in place, or by identifying potential areas for improvement to better protect your business.

Follow these links for additional information regarding these 3 legal products: Sierra Monthly Plan, Sierra Virtual and Free Contract Health Check.

ASX updates guidance on commissioned research reports

The ASX has recently updated Guidance Note 8 (Continuous Disclosure) to address the practice of listed entities commissioning and publicising research reports which include objectionable material that the entity itself could not publish (e.g. information about exploration results, mineral resources, ore reserves or a production target that does not comply with the JORC Code or research reports with an estimate of earnings or other forward looking financial information that does not meet the requirements of relevant ASIC Regulatory Guides).