Selling an online or ecommerce business

The assets that need their own transfer

Key assets to transfer, business.gov.au says, include marketing assets such as domain names and web registrations, intellectual property, and business records including customer, employee, legal and financial records.² For an online business, the domain name and web registrations are often close to the whole business. A buyer who gets the stock and the supplier list but not the domain has bought a lot less than they think.

Put the domain name and any web or marketplace account transfer in writing in the sale contract, the same way you'd put a lease assignment in writing for a shop. Check whether the brand is registered as a trade mark; registration is what lets you claim ownership of it as a registered right.³ A change of trade mark ownership must also be recorded with IP Australia.⁴

What doesn't automatically come with the business

• If you're selling your business, cancel your ABN: you cannot transfer an ABN². Before you cancel it, make sure you've met any lodgment, reporting and payment obligations².
• A registered business name can be transferred to the new owner, or cancelled if they trade under their own name instead.²
• Business.gov.au lists customer, employee, legal and financial records among those to transfer². If the Privacy Act covers your business, make sure you comply with the Australian Privacy Principles when disclosing any personal information to potential buyers¹⁵. Most small businesses, with an annual turnover of $3 million or less, aren't covered by the Privacy Act⁶. But selling personal information, such as a customer database, counts as trading in personal information, and the Privacy Act covers any business that does that⁵. Trading means collecting or disclosing personal information for a benefit, service or advantage. It is not trading if every individual concerned consents, or if the law authorises or requires it⁷. Selling the whole business by a change of ownership or a sale of shares, where the personal information is kept within the business, is not trading⁷. The OAIC advises against giving a prospective buyer the names and other identifiers of your customers during due diligence⁵.

Tax and GST are not different online

CGT and the small business CGT concessions work the same way for an online business: see the tax guide.

The sale of a business as a going concern is GST-free if all of the following apply:⁸

• Before the sale, the buyer and seller agree in writing that the sale is of a going concern.
• The buyer is registered or required to be registered for GST.
• Everything necessary for the business to continue operation is supplied to the buyer.
• The seller carries on the business until the day it is sold (date of settlement).
• Payment is made for the sale.

Ask your accountant whether the domain and platform accounts are part of "everything necessary".

Cancelling your ABN also cancels your GST registration. If the business was sold as a going concern, that can affect the GST payable on the sale.² Work through this with your accountant before you set a price.

See business valuation for how a price is worked out, and business brokers if you sell through one.