Can I Sell Part of My Business?

You don’t have to sell everything to make a change. Many owners reach a point where they want to sell part of their business — to free up cash, reduce risk, or bring someone else in. But “part” can mean very different things: a shareholding, some equipment, a client list, or even a piece of intellectual property. How you structure it makes all the difference.

Why Owners Sell Part of Their Business

Business owners sell parts of their operation for many reasons:

• To raise funds or pay down debt.

• To bring in an investor or strategic partner.

• To reward a key employee with ownership.

• To simplify operations or focus on core activities.

• To gradually step back while retaining some control and income.

Each situation needs a different legal and commercial approach.

What You’re Actually Selling

Before you can sell, you need to define what’s being sold. Broadly, it might be:

1. An ownership interest — for example, selling shares in a company or a partnership interest. This changes who owns and controls the business.

2. Business assets — such as plant, equipment, vehicles, stock, or other tangible items.

3. Intangible assets — such as a client base, brand, domain name, or intellectual property (for example, software, designs, or trade marks).

Each type of sale carries different risks, tax consequences, and documentation requirements.

Selling Plant, Equipment, Client Bases, or IP

If you’re selling only certain business assets:

• It’s an asset sale, not a business sale. You’re selling specific property, not the business entity itself.

• You’ll need a clear asset sale agreement describing what’s included, its condition, price, and when ownership transfers.

• GST may apply depending on whether the sale forms part of a going concern.

• For client lists or IP, you’ll need confidentiality and restraint clauses to prevent disputes over who owns and uses the information after the sale.

• Always check for finance or security interests registered on the PPSR — you can’t sell what you don’t fully own.

Even small or “simple” transfers can become messy if the rights being sold aren’t clearly defined.

The Risks

Selling part of a business — or some of its assets — can go wrong when:

1. The sale documents are unclear or inconsistent with your company, trust, or partnership structure.

2. Tax and GST implications aren’t considered.

3. The buyer assumes rights (like goodwill, clients, or use of a brand) that weren’t intended.

4. Ongoing obligations (for example, to clients or suppliers) are forgotten in the handover.

5. Small details can have large consequences.

Remedy

Risk: Disputes, loss of control, tax surprises, or unintended transfer of valuable rights.

Remedy: Get advice before agreeing to anything. A commercial lawyer can:

• help define exactly what’s being sold and retained,

• prepare or review the right sale documents,

• ensure IP, client, and confidentiality rights are properly handled, and

• coordinate with your accountant on structure and tax outcomes.

Thinking of selling part of your business — a stake, client base, or valuable asset?

The right structure can unlock value without unnecessary risk. Joe Kafrouni is a Queensland Law Society Accredited Specialist in Business Law with over 30 years’ experience helping business owners buy, sell, and restructure.

Related reading

• A Practical Legal Guide to Selling a Business
• Intellectual Property and Business Sales
• What Assets are Included? (Business Sale)

Disclaimer

The information provided by Kafrouni Law is intended to provide general information and is not legal advice or a substitute for it. Business people should always consult their own legal advisors to discuss their circumstances. Kafrouni Law makes no warranties or representations regarding the information and exclude any liability which may arise because of the use of this information. Liability limited by a scheme approved under professional standards legislation.

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