Section 52

A section 52 is a formal statement which is prepared when a vendor, (seller) of a small business would like to sell their business. These statements must be prepared for business purchases under $450,000 in total value. The statement must be prepared using the prescribed form under the Estate Agents (General, Accounts and Audit) Regulations 2018.

The purpose of the statement is to indicate the general performance of the business being sold during the past two financial years, operating costs, and with the statement also including the financial performance of the business up until the most recent quarter for the financial year. A practising accountant must also state that the financial and accounting statements that form part of the section 52 are in accordance with the records the vendor has kept and the statements reflect this information.

It is very important that the statement is prepared accurately as an incorrectly prepared statement could cost the vendor tens of thousands of dollars when it comes time to negotiating a price.Additionally not supplying the purchaser with a completed section 52 statement or an incorrectly prepared statement can sometimes void the contract, hence the seller may be able to cancel the contract and have their deposit refunded to them.

The costs of preparing the Section 52 could vary based on the business however most Section 52’s are in the vicinity of $350-$550, as long as you hold the profit and loss and the financials. In case you don’t, then this is not a problem, we can help with sorting these out too.

The sections that are included in the section 52 are:

  • Section A: An outline of what information is to be provided to the vendor.
  • Section B: An outline of what information is to be provided to the purchaser.
  • Section C: Details about the business and the vendor’s agent.
  • Section D: The operating report for the business and a statement from an accountant.
  • Section E: Vendor’s declaration.
  • Section F: Purchasers declaration.

Selling a business is a life changing decision but can also be a daunting process, with all the legal and accounting requirements it is important that your section 52 is completed professionally and accurately so that you can go through with selling your business hassle-free. A One Accountants are practising accountants and are experts in helping our clients with preparing section 52 statements. If you have any questions regarding the process please do not hesitate to contact one of our friendly staff on 8609-1889 and we would be happy to assist you with your enquiries.

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