Business buyer's agents

What a business buyer's agent does

A buyer's agent typically:

• Searches for businesses that match a buyer's criteria, including ones not publicly listed.
• Screens and shortlists candidates before the buyer spends time on any of them.
• Negotiates price and terms with the seller or the seller's broker.
• Coordinates the buyer's other advisers, such as the accountant and lawyer doing due diligence, without replacing them.

A buyer's agent is not a substitute for your own accountant or lawyer. See due diligence when buying a business for what still has to happen on the numbers and the contract.

Buy side M&A advisory, and where ASIC gets involved

At a larger scale, "buy side M&A advisory" describes the same buyer-side role for a company rather than a single small business. If the deal is structured as a sale of the company's shares rather than its business and assets, an adviser who deals in those shares on a client's behalf may need a licence. ASIC says anyone who runs a financial services business, such as buying or selling shares for clients, generally needs to be authorised under an AFS licence, or act as an authorised representative of a licensee¹. Ask any adviser which structure they are set up to work on, and whether they hold an AFS licence if the deal might end up as a share sale.

Licensing differs by state

Licensing for buying and selling businesses is handled by each state and territory. The five largest states are covered below; if you are in Tasmania, the ACT or the Northern Territory, check with your state or territory's fair trading regulator.

• In New South Wales, negotiating the sale, purchase or exchange of a business sits within the real estate agent licence (class 1 or class 2), or a licence restricted to business agent functions, that NSW Fair Trading administers². A corporation carrying out this work must appoint someone holding a class 1 real estate agent licence³.
• In Western Australia, a real estate and business agent licence under the Real Estate and Business Agents Act 1978 covers negotiating a purchase or sale of a business, including its goodwill, and is administered through Consumer Protection⁴.
• In Victoria, an estate agent's licence, administered by Consumer Affairs Victoria, covers arranging the sale of a business for a seller, and acting for a buyer to negotiate the purchase of property⁵. If you are acting for the buyer of a business, check with Consumer Affairs Victoria whether a licence is needed.
• In Queensland, a real estate agent licence covers buying, selling and negotiating the sale of a business, including negotiating on behalf of a buyer, and is administered by the Office of Fair Trading⁶.
• In South Australia, negotiating the buying or selling of a business is land agent work, registered and administered by Consumer and Business Services⁷.

Ask which licence a buyer's agent holds, in which state, and check it against the relevant state register before you pay anything or sign an engagement letter. A buyer's agent does not arrange your finance to buy a business; that is still on you and your lender. Signetry lists the businesses for sale that any buyer's agent would be searching, and is not itself a broker, adviser or party to any sale.