Primarius Blog - Due diligence - buying into a business

Muriel Oliver
Update | 26 Feb 2024

If you are buying into a business as a current employee there are several initial considerations as part of your due diligence process.  It is essential to get the following information in writing so that you can review it and seek professional advice as needed:

  1. Current business structure - check the current structure and find out how the sale is being offered, whether the business is for sale, or shares in the company etc?
  2. Purchase Price - obtain the information in writing so that it is clear what it includes?
  3. Multiplier or basis for goodwill calculation - Is there a methodology for determining the purchase price? Many industries use a "multiplier" of the profit to determine goodwill, depending on the industry, type of business and future maintainable earnings.
  4. Financials - ask for copies of the financial accounts and income tax returns for the last two financial years
  5. Business activity statements (BASs) - obtain copies of the BAS lodged for the last 2 full financial years and the year to date. One of the simplest tests is to check if the BAS for each year adds up to the financial statements and if not, ask for a reconciliation.

If all the above are provided and stack up then it is time to book a meeting with your accountant for them to advise you on the next steps and/or answer any questions you may have.

Disclaimer: This information is general in nature, and this is a complex area of law, and you should examine your eligibility for these concessions carefully under the criteria set out in the legislation, so before acting it is important to seek professional advice related directly to you and your circumstances, contact your Primarius team leader, or email us at if you require assistance.

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