Business & commercial
Buying a Business in WA: A Practical Due-Diligence Checklist
Due diligence tests whether the business, assets, earnings, contracts and risks match what the buyer has been told. It should occur before the buyer becomes unconditionally bound or before the due-diligence condition expires. Legal, accounting, tax, finance and industry checks should be coordinated.
Key points
- Confirm exactly what is being purchased: assets, shares or another interest.
- Verify the seller and business identities through official registers.
- Test earnings, liabilities and working-capital needs with an accountant.
- Review premises, licences, employees, intellectual property and material contracts.
- Search security interests and identify what must be released at settlement.
- Put relied-upon representations, conditions and adjustments in writing.
What are you buying?
An asset purchase may include goodwill, plant, stock, intellectual property, contracts and business name. A share purchase transfers ownership of the company with its history and liabilities. The structure affects risk, tax, consents and documents.
Core due-diligence areas
- financial statements, tax records and bank evidence;
- sales concentration and major customers;
- debts, disputes and contingent liabilities;
- title to assets and PPSR security interests;
- lease term, options, assignment and guarantees;
- employee entitlements and transfer arrangements;
- licences, approvals and regulator history;
- supplier and franchise agreements;
- privacy, cyber and record systems;
- intellectual property and online accounts; and
- stock count, adjustments and settlement deliverables.
ASIC recommends checking identifying information before handing over money, including company and business-name records. Industry licences should be verified with the responsible regulator.
Hypothetical example
A café’s reported profit assumes the owner works unpaid hours and excludes an upcoming rent increase. Reviewing payroll replacement cost and the assigned lease can materially change value and finance requirements.
Protect the decision in the contract
Appropriate conditions may address due diligence, finance, lease assignment, licences, key contracts, employee matters and release of security. The buyer should know the consequence if a condition is not met and avoid waiving protection before reports are complete.
Plan the transaction
Book a business-purchase consultation.
Sources checked
First drafted: 21 July 2026. General information only; obtain accounting, tax and legal advice.