How Buying an Existing Business in Australia Help You to Grow

• Buying an existing business in Australia can accelerate growth by giving buyers immediate access to customers, revenue, employees and market presence, rather than building these from scratch. Whether an acquisition is worthwhile depends on the target’s financial health, transferable contracts, compliance history, and genuine expansion potential. Entrepreneurs who prefer to register company in Australia and build from the ground up follow a different path, with different timelines and risks, than those pursuing an acquisition. 

• An established business often brings existing customers, revenue, staff, supplier relationships and market presence from day one. At the same time, acquisition creates risks around inherited liabilities, tax exposure, contracts, and regulatory compliance. Buyers who buy an existing business in Australia should weigh these advantages against the acquisition process, due diligence, costs, legal structuring and post-acquisition compliance covered below. 

Can buying an existing business in Australia help you grow faster? 

• Best for: buyers seeking established customers, operational infrastructure and an existing revenue base. 

• Main advantage: you acquire an operating business rather than building customers, suppliers, and systems from the beginning. 

• Main challenge: you inherit transaction risks requiring detailed financial, legal, tax and commercial due diligence. 

• Verdict: Buying an existing business can accelerate growth when the target has sustainable earnings, transferable contracts, and genuine expansion potential. Acquisition is not automatically better than establishing a new business, since the right choice depends on the buyer’s objectives, risk tolerance, and available capital. 

• If you are a non-resident planning to establish a business in Australia, it is important to understand the specific requirements that may apply to foreign entrepreneurs. Our guide on 4 Things To Know If You Plan To Register a Company in Australia as a Non-Resident provides an overview of these key considerations. 

Why can buying an existing business in Australia accelerate growth? 

• An existing business for sale in Australia typically offers an existing customer base, established revenue, brand recognition, trained employees, supplier relationships and working systems. Buyers may also gain existing premises, transferable licenses, market knowledge, and faster entry than starting from zero. Depending on the buyer’s other operations, a business acquisition in Australia may create economies of scale or cross-selling opportunities, such as a foreign retailer acquiring an Australian distributor to gain an existing sales channel. 

• Practical takeaway: these advantages depend entirely on the quality of the target, which is why due diligence is essential before any offer is finalized. 

Is buying an existing business better than starting a new one? 

Factor	Existing Business Acquisition	New Business
Customer base	Already established	Built over time
Revenue history	Available for review	None initially
Brand recognition	May already exist	Built from scratch
Employees	Already trained	Must be recruited
Supplier relationships	Often established	Must be negotiated
Initial operating risk	Lower uncertainty	Higher uncertainty
Upfront investment	Often higher	Often lower
Due diligence requirement	Extensive	Limited
Growth potential	Depends on target	Depends on execution
Time to market	Generally faster	Generally slower

• Buying an existing business in Australia may reduce certain startup risks, but it introduces transaction risk and the possibility of inherited liabilities that a new business would not carry. 

How do you find an existing business for sale in Australia? 

• Buyers commonly identify targets through business brokers, online marketplaces, industry networks, direct approaches to owners, professional advisers and private investment networks. Before making an offer, buyers who buy an existing business in Australia should evaluate revenue, EBITDA, customer concentration, assets, liabilities, employee arrangements, lease terms, intellectual property, supplier dependency and regulatory licenses, to confirm the existing business for sale in Australia genuinely matches their growth objectives. 

What due diligence is required before buying a business in Australia? 

• Due diligence is one of the most technical stages of buying a business in Australia. Financial due diligence reviews financial statements, bank statements, revenue, expenses, debts, working capital, tax liabilities and cash flow forecasts. Legal due diligence examines corporate structure, contracts, litigation history, intellectual property, licenses, leases, security interests registered on the Personal Property Securities Register (PPSR), and regulatory compliance.  

• Commercial due diligence assesses customers, competitors, market position, supplier relationships, revenue concentration and growth prospects. Tax due diligence covers income tax, GST, PAYG, payroll tax, superannuation and any outstanding liabilities owed to the Australian Taxation Office (ATO). 

• Practical checklist: financial statements and tax lodgments reviewed, PPSR registrations verified against target assets, contract and license transferability confirmed, employee entitlements assessed, and pending litigation checked. 

• Practical takeaway: thorough due diligence protects buyers from inheriting undisclosed liabilities and informs the final purchase price. 

Which Australian laws apply when acquiring an existing business? 

• Relevant legislation depends on the target, structure, industry and buyer circumstances. The Corporations Act 2001 (Cth) governs company structures and is administered by ASIC. The Competition and Consumer Act 2010 (Cth), overseen by the ACCC, may apply where competition, consumer protection or merger and acquisition issues arise.  

• The Personal Property Securities Act 2009 (Cth) governs security interests on the PPSR. Employment matters fall under the Fair Work Act 2009 (Cth), overseen by the Fair Work Ombudsman. Foreign buyers must also consider the Foreign Acquisitions and Takeovers Act 1975 (Cth), administered with advice from FIRB. 

Should you buy the shares or assets of an Australian business? 

• In a share acquisition, the buyer acquires ownership of the company, which continues operating with its existing assets and liabilities, making historical due diligence particularly important. In an asset acquisition, the buyer acquires specified assets and potentially selected liabilities, offering more control, though contracts, licenses and employees may need separate arrangements. 

Factor	Share Purchase	Asset Purchase
What is acquired	The company itself	Specific assets and liabilities
Existing liabilities	Generally transfer	Can often be excluded
Contracts	Generally continue	May require consent
Employees	Generally continue as is	May need new arrangements
Licenses	Generally remain	May need reapplication
Due diligence	Broad, covers company history	Focused on assets
Transaction complexity	Often simpler	Can require more drafting
Suitability	Full continuity	Selective acquisition

Neither structure is always superior. The right choice depends on the target’s liabilities, contracts and the buyer’s risk appetite. 

What is the process for buying a business in Australia? 

Step 1: Define objectives 

• Establish the reason for the acquisition, growth ambitions, budget constraints, desired industry, geography and strategies prior to initiating the business acquisition process. 

Step 2: Identify target 

• Research potential businesses based on financial results, industry sector, location, customer base, growth potential, assets and fit to your objectives for acquiring the business. 

Step 3: Confidentiality agreement 

• Enter into a confidentiality agreement to safeguard sensitive financial, commercial, operational and customer data exchanged during early stages of discussion and due diligence. 

Step 4: Preliminary review 

• Conduct preliminary review of financial statements, revenue and expenses, assets and liabilities, staff, agreements and other operational data to determine whether it is worth pursuing. 

Step 5: Indicative offer 

• Prepare indicative offer setting out proposed purchase price, deal structure and key conditions and other principal commercial terms. This is a non-binding offer. 

Step 6: Due diligence 

• Carry out detailed due diligence to ascertain any liabilities, regulatory issues, restrictions, risks and possible valuation problems. 

Step 7: Negotiate terms 

• Negotiate the purchase price, warranties, indemnities, conditions, liabilities, employee arrangements, payment terms, and other transaction terms with the vendor. 

Step 8: Decide on a share or asset deal structure 

• Decide to acquire company shares or assets after assessing the liabilities, tax issues, contracts, licenses, employees, and transaction objectives. 

Step 9: Sign transaction documents 

• Execute the required sale agreement, disclosure documents, resolutions and other legal documentation to legally complete the transaction. 

Step 10: Get required approvals 

• Obtain any required approvals prior to completion, such as foreign investment approvals needed for the specific transaction. 

Step 11: Close the transaction 

• Complete payment, transfer of ownership or assets and complete the closing process of the acquired business based on the transaction documents. 

Step 12: Complete post-acquisition integration 

• Integrate employees, banking, systems, contracts, accounting and other aspects and update corporate records after completion of the transaction. 

Practical takeaway: rushing due diligence or documentation increases the risk of disputes after settlement. 

How much does it cost to buy a business in Australia? 

• Costs typically include the purchase price, legal, accounting, due diligence and valuation fees, broker fees, stamp duty where applicable, financing costs, working capital and integration expenses. Common valuation approaches include earnings multiples, asset-based valuation and discounted cash flow where appropriate.  

• Multiples vary by industry and earnings quality, so buyers should obtain an independent valuation rather than relying on generic benchmarks. 

Can foreign entrepreneurs buy a business in Australia? 

• Foreign persons can generally undertake a business acquisition in Australia, subject to rules under the Foreign Acquisitions and Takeovers Act 1975. Depending on the investor’s country, sector and transaction value, FIRB approval may be required before completion, with thresholds indexed annually and varying for free trade agreement partner countries.  

• Company ownership is separate from director residency, banking and KYC obligations, and tax considerations. Owning an Australian business does not itself grant the right to live or work in Australia, since that depends on a separate visa pathway. 

What must you do after acquiring an Australian business? 

• Post-acquisition compliance depends on whether the buyer acquired shares or assets. Buyers generally need to update ASIC records, confirm ABN and tax records, review GST and PAYG registrations, address employment and superannuation obligations, update bank mandates, arrange insurance, transfer or reapply for licenses, and review contracts and intellectual property. 

How can an acquisition help an entrepreneur expand in Australia? 

• Consider a general illustrative example. A foreign entrepreneur seeking to enter the Australian market decides to buy an existing business in Australia rather than start one from scratch. The target SME already has customers, revenue, employees, supplier relationships and operating systems in place, but the entrepreneur inherits this operating business only after completing financial, legal, tax and commercial due diligence to confirm its true condition. This scenario is illustrative only and not a specific client case. 

How can we help? 

• Tetra Consultants supports international entrepreneurs considering business acquisition in Australia. Our team assists with offshore company incorporation, relevant where a buyer needs a new acquisition vehicle. We also assist with corporate bank account opening, supporting post-acquisition banking. For buyers wanting to protect acquired brands, we support international trademark registration as part of a broader intellectual property strategy. 

Conclusion 

• Buying an existing business in Australia can offer real growth advantages, including an existing customer base, revenue and operational infrastructure, but these benefits come with acquisition costs, due diligence obligations and a choice between share and asset structures.  

• Foreign buyers must also weigh FIRB requirements, and every buyer must plan for post-acquisition compliance. Acquisition tends to suit buyers seeking faster market entry, while starting a new company may suit those wanting full control from day one without inherited liabilities. 

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