Selling an Australian Business to an Overseas Buyer: Signing

Selling an Australian business to an overseas buyer is usually signed like any other sale: the parties sign the sale agreement, often in counterparts or electronically, with no notary. Notaries come in at the edges. A buyer signing abroad may use a local notary or an Australian embassy, and the buyer's country may want your company documents notarised and apostilled.

Key takeaways

• A sale agreement does not generally need a notary to be binding in Australia. The lawyers on each side settle how it is signed.
• A buyer abroad can often sign electronically, before a local notary, at an Australian embassy, or through an attorney in Australia.
• Where land is involved, state or territory registry rules on witnessing and identity may apply. Ask the conveyancer.
• Evidence that a foreign buyer company exists comes from its own country; an Australian notary cannot vouch for a foreign registry.
• The buyer's regulators or bank may want your company documents notarised and apostilled by DFAT.
• Foreign investment approval, tax and competition questions are for your lawyer and accountant, not the notary.

Does the sale agreement need a notary?

Generally, no. In Australia a business or share sale agreement is binding when the parties sign it as the agreement and the law require. A notary is not part of that. Lawyers commonly arrange for signing in counterparts: each party signs an identical copy, and the copies are exchanged. The buyer does not need to be in the room. Australian law also allows companies to sign documents, including deeds, electronically, and many sales are now signed that way. Whether a particular document may be signed electronically can depend on state or territory law. So can the way individuals must sign deeds. Leave both to your lawyer.

That leaves the notary a narrower but real job in cross-border sales. It is to formalise signatures and documents that a foreign party, registry, bank or regulator will rely on. Our guide to using a notary for contracts explains why notarising a contract rarely changes its legal effect in Australia.

Which documents in a sale may need formalities?

The table lists the documents that commonly appear in the sale of an Australian business to a foreign buyer, and where a notary sometimes fits. Your lawyer will have the definitive list for your transaction.

Document	Who signs	Where a notary may come in
Business or share sale agreement	Seller and buyer	Rarely; counterparts or electronic signing are common
Share transfer forms	Seller and buyer	Rarely; your lawyer confirms the form
Deeds, such as restraints, releases or guarantees	The parties	A buyer abroad may sign before a local witness or notary
Land transfer or lease assignment	The parties	State registry rules on witnessing and identity
Buyer's evidence of corporate authority	Buyer, in its own country	A notary there, with an apostille there
Seller's company documents for the buyer's country	Seller's officers	A notary in Australia, then DFAT
Power of attorney for someone to sign in Australia	Buyer	Signed before a notary abroad, as the lawyers require

How can the overseas buyer sign?

The buyer's lawyers and yours agree this in advance, usually in a signing and completion plan. There are four common routes, and a transaction can mix them.

• Electronic signing. Often the simplest route. It works where the lawyers are satisfied the document can be signed that way, and the buyer's company may sign electronically under its own law.
• Before a notary in the buyer's country. The buyer's officers sign in front of a local notary, who attaches a certificate. If the document must be relied on formally in Australia, it may then be apostilled in that country. Outside the Hague Convention, it is legalised at the Australian embassy instead.
• At an Australian embassy or consulate. Smartraveller says Australian consular officials overseas can witness signatures on Australian documents, for a fee. That can suit a document governed by Australian law. Our guide to Australian embassy notarial services explains what they offer.
• Through an attorney in Australia. The buyer grants a power of attorney to someone here, often an officer of its Australian subsidiary, who signs at completion. The power itself is signed abroad, often before a notary. Where land is involved, it may need to be registered under state or territory rules.

How do you know the buyer company is who it says it is?

Your lawyer will want evidence that the buying company exists and that the people signing for it may bind it. For a foreign company, that evidence comes from its own country. It may be an extract from the foreign company register or a certificate of incumbency listing its officers. It may be a certified board resolution approving the purchase, or a legal opinion from the buyer's lawyers. In many countries a local notary can certify some of these facts, and the document is then apostilled there.

An Australian notary cannot confirm those facts from here, because they depend on a foreign registry's records. An Australian notary can certify a copy of a foreign document already formalised in its own country, if that helps your file. Our guide to company records for a foreign registry covers the mirror image. It explains what an Australian company provides when a foreign receiving body asks the same question of it.

What might the buyer's country ask of you?

The buyer often has approvals of its own. Its regulators, bank or auditors may want evidence about the business it is buying, formalised the way their country expects. Typical requests to an Australian seller are a current ASIC company extract and a certified copy of the constitution. Others are a board resolution approving the sale, and certified copies of key contracts or financial statements.

Where formalised documents are wanted, an Australian notary certifies copies from the originals. The notary also attests the signature of the officer who signs a resolution or certificate, after checking their photo identification and authority. The notarised documents then go to DFAT. It issues an apostille if the buyer's country is a party to the Hague Convention, or an authentication certificate for embassy legalisation if it is not. Check the HCCH status table on the day. A copy certified by a Justice of the Peace, however useful in Australia, is not generally accepted overseas and cannot be apostilled. Our guide to notarising a board resolution explains that step.

What if one of the seller's directors is overseas?

Cross-border sales often have a signatory abroad on the seller's side too, such as a director who lives overseas or is travelling at completion. The same routes apply in reverse. The director may sign electronically if the lawyers agree. They may sign a counterpart before a consular official at an Australian embassy, or before a local notary. Or the company may sign through its other officers, if the constitution and the Corporations Act allow. Check this before the signing date is fixed. Our guide for when a signatory cannot attend sets out the options, and the notary will want to know in advance which directors will be in the room.

What about approvals and tax?

A sale to a foreign buyer can raise questions that have nothing to do with signing. Does the buyer need foreign investment approval? Is competition clearance needed? What tax clearances or withholding apply, and how is the price paid across borders? These are for your lawyer and accountant, and they often decide the timetable. The notary's work usually comes last, once the documents are settled. Tell your lawyer early if any document will need to go through DFAT or an embassy.

How do you plan the signing, step by step?

1. Ask your lawyer for a signing plan. Every document, who signs it, where, and in what form.
2. Identify anything that must be formalised. Documents going to the buyer's regulators or bank, and any power of attorney or land document.
3. Collect your company evidence. A current ASIC extract, the constitution, and a board resolution approving the sale and naming signatories.
4. Check the buyer's evidence. Your lawyer reviews the foreign company documents, formalised in the buyer's country.
5. Book the notary for your side. For certified copies and any documents the buyer's country wants notarised, with photo identification for each signatory.
6. Send to DFAT. Then to the embassy where the buyer's country is outside the Hague Convention.
7. Sign and exchange. In counterparts, electronically, or at a signing meeting, as the plan says.

Common mistakes to avoid

The most common mistake is assuming the buyer can "just get it notarised" at home. If the document concerns Australian land, the state registry has its own witnessing and identity rules. The second is asking an Australian notary to confirm facts about the foreign buyer company, which only its own country's registry or notary can do. The third is leaving the buyer's formalised documents until the week of completion, when legalisation can take longer than expected. The fourth is using a JP-certified copy for a foreign regulator. Our guide to transferring shares with a party overseas covers share transfers specifically.

Here is an illustration, not a real case.

A Sydney software company's shareholders agree to sell all their shares to a buyer in Singapore. The lawyers agree that the share sale agreement will be signed electronically. The buyer's lawyers provide a notarised and apostilled certificate confirming the buyer's directors. The buyer's bank wants a certified copy of the Australian company's constitution and a board resolution. Two directors sign the resolution before a notary, who also certifies the constitution from the original, and DFAT adds apostilles. Completion happens on the planned day.

In short

A sale of an Australian business to an overseas buyer is normally signed without a notary, in counterparts or electronically. The buyer abroad may instead sign before a local notary, at an Australian embassy or through an attorney here. Evidence about the buyer comes from its own country. A notary in Australia formalises your company documents when the buyer's country wants them, and DFAT legalises them. Leave approvals and tax to your lawyer and accountant. Our document notarisation page explains how company documents are notarised.

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Selling to a buyer overseas and asked for notarised company documents? Send us the list the buyer's side has asked for, and we will explain each step before you book.