If you’re building a startup or SME, an acquisition can feel like the “end goal” - a big milestone that validates years of hard work and (hopefully) delivers a great financial outcome.
But here’s the part many founders don’t hear early enough: getting acquired rarely happens by accident. Buyers generally don’t “fall in love” with an idea. They buy businesses that are well-run, low-risk, and easy to take over.
So if you’ve been Googling how to get a company acquired, the best answer is usually: build an acquisition-ready business before you ever sit down with a buyer. That means tightening up your operations, your finances, and (crucially) your legal foundations.
Below, we’ll walk through the practical and legal steps you can take in Australia to improve your chances of a smooth, value-maximising acquisition - and to avoid deal-killing surprises during due diligence. (This article is general information only and isn’t financial or tax advice - for valuation and tax structuring, you should speak with an accountant or financial adviser.)
What Does “Getting Acquired” Actually Mean For Your Business?
In simple terms, an acquisition happens when another person or company buys your business. The buyer might be:
- a competitor (to grow market share)
- a supplier or customer (to vertically integrate)
- a larger company looking for a new product, team, or technology
- a private investor (or investor group) looking for a cash-flowing business
From a legal perspective, acquisitions usually happen in one of two main ways:
1. Share Sale (Buyer Purchases The Company Shares)
If you operate through a company, a buyer may purchase your shares (or all shares) and “step into your shoes” as owner of that company.
This structure can be attractive because contracts, licences, staff arrangements and supplier relationships may continue inside the same legal entity - but it also means the buyer inherits the company’s history, including unknown liabilities. That’s why share sales often involve heavier due diligence and more detailed warranties/indemnities.
2. Asset Sale (Buyer Purchases Business Assets)
Instead of buying the shares in the company, the buyer buys the business “assets” (for example, customer contracts, brand/IP, equipment, goodwill, and sometimes employees).
Asset sales can reduce the buyer’s exposure to historical liabilities - but they can be more complex in practice, because assets and contracts may need to be transferred one-by-one.
There’s no one-size-fits-all answer on which structure is “better”. The right structure depends on your business model, tax position (get accountant advice), risk profile, and what the buyer wants.
How Do You Make Your Business Acquisition-Ready?
If you want to improve your odds of being acquired (and improve your valuation), it helps to think like a buyer. A buyer typically wants a business that is:
- profitable or credibly scalable
- easy to transfer (customers, suppliers, key assets)
- low risk (clear contracts, no hidden disputes)
- not overly reliant on one person (especially the founder)
Clean Up Your Cap Table And Ownership Story
One of the fastest ways to slow down a deal is unclear ownership. Before you go to market, make sure you can clearly answer:
- Who owns the business (and in what percentages)?
- Are there any informal promises to early contributors?
- Do any shareholders have special rights (veto rights, board appointment rights, pre-emptive rights)?
- Are there convertible notes or options that will convert on exit?
If you have more than one owner, a properly drafted Shareholders Agreement can be critical. Buyers will want to understand decision-making, transfer rules, and what happens if someone refuses to sell.
Document Your Financials And Key Metrics
Even if your business is early-stage, you want your numbers to be clear and defensible. Common acquisition documents and information requests include:
- Profit and loss statements and balance sheets
- Revenue by product line/customer
- Customer retention/churn and lifetime value (if relevant)
- Forecasts and assumptions
- Tax and BAS records (where applicable)
This isn’t just for the buyer. Clear financial reporting helps you negotiate confidently and reduces the risk of price reductions late in the deal. (For financial and tax advice, including valuation methods and tax outcomes, you should speak with an accountant or adviser - Sprintlaw can help with the legal side of the transaction.)
Reduce “Founder Dependency”
Many buyers look for businesses that can run without the founder. That doesn’t mean you’re not important - it means systems matter.
Practical steps include:
- documenting processes (sales, onboarding, delivery)
- delegating client relationships to a team where possible
- building management reporting and KPIs
- locking in key staff with clear contracts and incentives
From a legal angle, buyers will also look closely at your employment and contractor arrangements to see if the business can keep operating after settlement.
What Legal Foundations Do Buyers Expect To See?
This is where many deals get messy. You might be growing fast, but if key legal basics are missing, a buyer may treat your business as high-risk - which can mean a lower price, tougher deal terms, or a deal that doesn’t proceed.
Your Company Setup Should Be Consistent And Up To Date
Buyers often start by checking whether your company records match reality. For example:
- Is your company structure correct for how you operate now?
- Are your director/shareholder details current?
- Do you have a constitution, and does it align with your ownership arrangements?
Where relevant, a clear Company Constitution helps show the buyer how the company is governed and whether there are restrictions on share transfers or decision-making.
Make Sure Your Intellectual Property (IP) Is Owned By The Business
For many startups and service-based SMEs, IP is the deal.
Buyers will want to confirm that the business actually owns the key IP it relies on, such as:
- branding (business name, logos, taglines)
- website content and marketing materials
- software code, product designs, systems and documentation
- customer databases and proprietary methods
A common problem is when IP was created by a founder, contractor, or developer, but never formally assigned to the company. If that’s your situation, it’s worth fixing before you’re in live deal negotiations.
Lock In Revenue With Clear Customer Contracts
If your business relies on recurring revenue or long-term clients, the buyer will ask:
- Do you have written contracts?
- Can customers terminate easily?
- Can the contract be assigned to a new owner?
- Are pricing, deliverables and limitation of liability clear?
Even if you’re not a “contracts person”, tightening your customer terms can directly improve buyer confidence - and sometimes your valuation.
Be Careful With Confidentiality Before You Share Sensitive Info
To get acquired, you’ll need to share financials, customer details, and strategic information. But you should do it in a controlled way.
It’s common to use a Non-Disclosure Agreement early in discussions, before you hand over detailed information. While an NDA can’t guarantee confidentiality or prevent all misuse, it can help set clear rules around use of information, who can access it, and what happens if information is improperly disclosed.
Know Where Your Security Interests Sit (And Clear Them Where Needed)
If you’ve borrowed money, used equipment finance, or entered certain supply arrangements, there may be security interests registered against your business assets. Buyers will usually want these identified and dealt with as part of settlement.
In Australia, this often involves the PPSR (Personal Property Securities Register) and any registrations tied to finance. If you’re taking finance or granting security, it’s worth understanding how register a security interest steps can affect an eventual sale process.
How Does The Acquisition Process Usually Work In Australia?
Every deal is different, but most acquisitions follow a fairly predictable path. Knowing the stages helps you prepare and avoid common timing issues.
1. Early Conversations And Indicative Offer
This is where you and the buyer explore whether there’s a fit. The buyer might ask high-level questions about revenue, customers, growth, and why you’re selling.
Sometimes the buyer will provide an indicative offer or term sheet. This document is often “non-binding” (except confidentiality and exclusivity clauses), but it shapes the rest of the negotiation.
2. Due Diligence (The Buyer Investigates The Business)
Due diligence is where the buyer checks your claims, reviews your risks, and decides whether the price and structure still make sense.
They may review (among other things):
- company records and ownership
- material contracts (customers, suppliers, leases)
- employment and contractor arrangements
- disputes, complaints and regulatory issues
- IP ownership and usage
- financial statements and tax records
If you want the process to run faster and with fewer surprises, it helps to prepare your own “sell-side” pack early. Many businesses also do a pre-sale legal review so they can fix issues before a buyer finds them. In more complex deals, a legal due diligence package can help you identify the gaps that might otherwise lead to re-negotiation later.
3. Negotiating The Sale Agreement
The sale agreement is the core legal document that sets out what’s being sold, for how much, and on what terms.
It typically covers:
- purchase price and payment terms (including earn-outs, if any)
- what’s included and excluded from the sale
- conditions precedent (what must happen before completion)
- warranties (promises you make about the business)
- indemnities (who pays if certain risks occur)
- restraints (non-compete / non-solicitation, where appropriate)
- handover and transition support
If it’s an asset sale, you may see an Asset Sale Agreement used to document the transaction, including transfer of specific assets, assignment of contracts, and treatment of employees.
4. Completion (Settlement) And Handover
Completion is when money changes hands and ownership transfers.
Depending on the deal, completion might also involve:
- transferring or novating customer and supplier contracts
- updating ASIC records
- releasing securities
- formal IP assignments
- employee transfer arrangements and communications
This is also where a detailed completion checklist becomes important - it keeps both sides aligned on what documents need to be signed and what steps happen on (or before) settlement day.
Common Deal Terms That Affect Your Outcome (And What To Watch For)
Founders often focus on the headline price. But the terms around the price can be just as important.
Earn-Outs
An earn-out is where part of the purchase price is paid later, depending on performance after completion (for example, revenue targets or customer retention targets).
Earn-outs can bridge valuation gaps, but they can also create risk if the buyer controls the levers that affect performance (like marketing spend, pricing, or staffing). If an earn-out is proposed, you’ll want the metrics, timeframes and control mechanisms to be very clear.
Warranties And Indemnities
Warranties are statements you make about the business (for example, that accounts are accurate, there are no undisclosed disputes, and IP is owned by the company). If a warranty is breached, the buyer may have a claim against you.
Indemnities are more specific risk allocations - for example, an indemnity that you will cover a known dispute or a particular tax risk.
These clauses are a major reason “cleaning up” your legal and compliance issues early matters. The cleaner your business, the less you may need to give away in warranties, indemnities, or purchase price holdbacks.
Restraints Of Trade (Non-Compete And Non-Solicitation)
Buyers will often ask you not to compete for a period after the sale, and not to poach staff or customers.
Restraints need to be drafted carefully: too broad, and they may be unenforceable; too narrow, and the buyer may not feel protected. Enforceability can also depend on the circumstances (including what’s “reasonable”) and the state or territory law that applies, so this is a common negotiation point and should align with your future plans.
Conditions Precedent
Some deals are conditional on things happening first - like landlord consent to assignment of a lease, key customer consent to assignment, finance approval, or board/shareholder approvals.
If your business has key contracts that can’t be transferred easily, it’s better to know that early and plan around it.
Key Takeaways
- When you’re thinking about how to get a company acquired, the most effective strategy is to become “acquisition-ready” well before you start negotiations.
- Buyers look for a business that is easy to transfer, low risk, and not overly dependent on the founder - strong systems and documentation matter.
- Clean legal foundations (ownership records, IP ownership, customer contracts, employment arrangements) reduce buyer risk and can protect your price and deal terms.
- Most acquisitions follow a similar pathway: early offer/term sheet, due diligence, negotiation of the sale agreement, then completion and handover.
- The headline price isn’t everything - earn-outs, warranties, indemnities, restraints, and conditions precedent can materially affect your final outcome.
If you’d like legal help preparing your business for an acquisition or reviewing a sale offer, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
