Due diligence considerations when buying a business in QLD

October 14, 2025

Buying a business in Queensland can be a fantastic opportunity – but it’s not without risk. Legal due diligence is a critical step that protects your investment and ensures you are not taking on hidden liabilities. Here are some things that you need to consider.

Contracts & Agreements

Review all business contracts – including supplier agreements, service contracts, equipment leases, franchise agreements, and customer terms.

You will need to confirm whether these agreements cover all of the existing relationships, are legally enforceable, can be legally transferred to you and whether the existing terms are commercially viable.

Employees & Workplace Obligations

Staff may be one of the business’s greatest assets – or its biggest liabilities – so it’s essential to understand exactly what you are inheriting.

Firstly, identify all current employees and obtain copies of their employment contracts. These contracts should clearly outline the terms of employment, including job descriptions, pay rates, leave entitlements, notice periods, and any applicable bonuses or incentive schemes. Check whether employees are full-time, part-time, or casual, and how long they have been employed.

You will also need to review the relevant Modern Awards or Enterprise Agreements under the Fair Work Act 2009 (Cth), which set out minimum conditions and entitlements. Queensland employees are covered by the national industrial relations system, so these frameworks are non-negotiable.

A key consideration in Queensland (and across Australia) is the transfer of employment. If you are purchasing the business as a going concern and continuing its operations, existing employees may transfer to you. In this case, you must determine whether their accrued entitlements – such as annual leave, personal leave, and long service leave – will carry over or be paid out by the seller. This must be negotiated in the sale agreement, as it affects your financial obligations and future payroll liability.

Other considerations are whether there are any employee disputes, pending workers’ compensation claims, or historical issues with unfair dismissal. You do not want to inherit unresolved legal or HR matters.

Licences, Permits & Compliance

Make sure the business holds all required licences and permits under Queensland legislation – for example, liquor licences (via the Qld Office of Liquor and Gaming Regulation), food licences (via local councils), health registrations or trade and professional licences.

Not all licences are transferable, meaning you will need to reapply before you can operate legally.  Others may require you to meet specific criteria, such as demonstrating financial stability, holding the necessary qualifications, or proving compliance with certain operational conditions before the authority will consent to transfer the licence.

It’s vital to understand what licences the business needs to legally operate and the process to transfer or obtain to avoid any delays.

Intellectual Property (IP)

Does the business own its name, logo, domain names, trademarks, or any specialised software? IP should be properly registered and capable of being transferred to you. Where brand reputation and local goodwill are especially important for small businesses, securing IP rights is vital.

Social Media Platforms like Facebook, TikTok, Instagram, LinkedIn, and Twitter are an increasingly important part of a business’ IP portfolio. Today, these platforms play a significant role in branding, customer engagement and sales. Make sure that the social media accounts are part of the sale and can be transferred.

Premises & Lease Agreements

If the business operates from physical premises – whether it’s a retail store, office, warehouse, or commercial site – the lease is a critical part of your legal due diligence. It is important to review the key terms such as:

• Lease duration: How long remains on the lease, and are there options to renew?
• Rent and outgoings: What is the current rent, and how often is it reviewed or increased (e.g. annually or in line with CPI)? Are you responsible for additional costs such as rates, maintenance, body corporate fees, or insurance?
• Use of premises: Is the permitted use listed in the lease aligned with the business activities you intend to carry on?
• Assignment of lease: Can the lease be legally transferred (assigned) to you as the buyer? Most Queensland leases require the landlord’s written consent before they can be assigned, and the landlord may impose conditions, such as conducting financial or business checks on the incoming tenant.
• Fit-out ownership: Clarify whether the existing fit-out, fixtures and improvements belong to the tenant or landlord, and whether they can be transferred or must be removed at the end of the lease.

If the business is operating in a retail setting, the lease may be governed by the Retail Shop Leases Act 1994 (Qld). This legislation provides protections for retail tenants, including minimum disclosure obligations and limits on the recovery of certain costs by landlords.

Legal Disputes & Liabilities

Check for any outstanding litigation, disputes, or regulatory investigations. The last thing you want is to inherit a lawsuit or unresolved complaint with the Office of Fair Trading or a local council.

Stamp Duty in Queensland

Stamp duty applies to the transfer of business assets in Queensland, including goodwill, fixtures, and plant & equipment. It is important to calculate this cost early, as it can significantly impact your purchase budget.

So, arm yourself with knowledge, seek expert advice, and make informed decisions – because in Queensland, a well-prepared buyer is a successful buyer.

If you are considering buying or selling a business in Queensland, please contact our Business Services team.