Changing the owner of a business involves transferring ownership of the business asset. If a business is solely owned by a husband and is put in joint names with his wife, the law regards the husband as transferring an interest in the business to his wife. For this reason stamp duty is payable on any change of ownership in the business. Stamp duty is assessed on the value of the interest being transferred. That value is the net value of the interest being transferred. This is calculated by deducting the debts attached to the interest from the gross value of the interest. Current financial statements including a profit and loss account must be lodged with the transfer document at the Stamp Duties Office. The Stamp Duties Office may choose to value the business by capitalising its income rather than having regard to market value. Whichever method achieves the most realistic result can be used.
A change in ownership of a registered business name must be registered within twenty eight days at the Corporate Affairs Commission. Both the vendor and purchaser must sign this form. If the vendor is unwilling to sign, the form must be lodged with the purchaser's signature and a statutory declaration explaining why the vendor has not signed the form.
A Form 2 under the Land and Business (Sale and Conveyancing) Act 1994 (SA) must also be prepared by the vendor, see cooling off.
The Australian Taxation Office may also require proof that there has been a transfer of ownership and for this reason a contract for sale and purchase is usually desirable as a record of the transfer.
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