Buying and selling a business in the snow
SNOW Business is an important part of the Victorian economy, with the 2014 winter snow season contributing $668 million, with 775,469 visitors across all resorts.
According to the Alpine Resorts Coordinating Council, visitor numbers increased on average by 32 per cent compared to the 2013 season.
Buying a business in an alpine environment can be stimulating, rewarding and the advantages of running a snow business are often personal, strategic or a step in a certain direction.
When you buy a business, you are buying the goodwill, the plant and equipment and the stock. As part of the sale, there are various transfers to be arranged, depending on the business.
For example, for a cafe or restaurant, you need a transfer of food premises registration and liquor licence.
For a retail business, you need to organise trading accounts with suppliers. For other businesses, you may need to transfer statutory licences or approvals.
There are also aspects such as transfer of employees, transfer of business name, and in some cases transfer of bookings, deposits and/or contracts held.
Each business is unique and careful thought must be given to the transaction to ensure that the buyer receives good title to the business and that the parties are not left with unforseen costs or exposure after settlement.
One thing that most sale and purchase of snow businesses have in common is the transfer of premises.
In an alpine environment, as ownership of a building is usually by way of lease, the business owner usually holds a retail sub-lease (or sub-sublease) of the premises.
The business owner will need to obtain the landlord’s consent to any transfer of the right to occupy the premises.
Outgoings payable under a retail sublease would usually include a proportion of the head lease charges on the lease. In addition, there may be other considerations to consider on transfer, such as compliance with CFA regulations.
If you are buying into, or considering buying into an alpine business, it is important that the different requirements of alpine arrangements are known and explained to you.
If you want to sell your alpine business, or are looking to buy an alpine business, it is recommended that you seek advice from lawyers who understand business and leasing and in particular, the different requirements of snow businesses and alpine leasing.
SNOW BUSINESS: Having the right advice is crucial when buying in an alpine environment.