Do I use the PAMD Form 21a – Appointment of Real Estate Agent if I am selling shares in the company that owns a business and not the business itself?

If so, how do I complete the Form 21a for sale of shares?

Whilst it is questionable as to whether a business broker is required to use the Form 21a when selling shares in a company, it is best practice to do so. This way, the business owner is afforded the benefit of the important information disclosed in this form and the business broker is covered should the form be required as a matter of law or the structure of the sale changes from a sale of shares to a sale of the business asset itself.

As far as completing the form is concerned, we recommend that the business broker insert into Part 3 (Property/Business Details) and Part 5 (Performance of Service) of the Form: “See Schedule Attached”.

The business broker should then insert a Schedule to the form with the following proviso:

The Services to be performed by the Agent is to sell the business located at [insert location] and anything related to the sale of the business including any interest (e.g. shares) in the proprietor of the business, currently .

Similarly, as a matter of good practice, if the business broker is selling a business owned by a company, this clause should also be inserted as a precaution in case the structure changes from a sale of business asset to a sale of the shares in the proprietor company.

What to do next: If you would like more information on dealing with this issue, or for all queries regarding business sales and assistance, call Joe Kafrouni on 3354 8888 or email

Disclaimer

The information provided by Kafrouni Lawyers is intended to provide general information and is not legal advice or a substitute for it. Business brokers should always consult their own legal advisors to discuss their particular circumstances. Kafrouni Lawyers makes no warranties or representations regarding the information and exclude any liability which may arise as a result of the use of this information. This information is the copyright of Kafrouni Lawyers.

Liability limited by a scheme approved under professional standards legislation.