Buying a Pub or Hotel as a Going Concern: The Sale and Settlement
Going Concern Sale
Due diligence · Employees · Licence · Hand-over · Settlement · Day one
You have found the venue. Now you need to know what to check before signing, who has to clear the deal, what transfers and gets adjusted at settlement, and whether the business can open under your control the next morning. This is the sale and hand-over, not the loan. Deposits, valuation, borrowing capacity and lender options stay on our pub and hotel finance guide.
Quick Answer
Buying a pub or hotel as a going concern means taking over an operating venue that can keep trading: the staff, licence and gaming, stock, bookings, supplier arrangements, goodwill and the premises or lease. Before signing, verify that every essential part can transfer, quantify the liabilities and align the finance, licence and landlord conditions. At settlement, check the adjustments, stock, keys, systems, records and authority to trade so you are not buying a business that cannot open the next morning. Deposits, valuation and borrowing sit on our pub and hotel finance guide.
What are you actually buying when you buy a pub or hotel as a going concern?
When you buy a pub or hotel as a going concern, you are not buying a building and you are not taking out a loan. You are taking on an operating venue as one bundle, handed to you still trading. That bundle is the liquor licence and any gaming entitlements, the employees, the stock and plant, the bookings and supplier contracts, the goodwill, and, where the venue is freehold, the land and building underneath it.
That is a different thing from buying the bricks. An empty building is a property purchase; an operating venue sold with its licence, its trade and its people is a going-concern purchase, and it is the going concern that transfers to you on settlement day. This post is about that sale and how it settles: what you take on, what the seller must hand over, and the conditions that decide whether the day goes ahead. How the purchase is financed is covered in our pub and hotel finance guide, so every question about deposits, valuation or who lends goes there rather than being repeated here.
If you want the term itself, our going concern glossary entry defines it in a line, and our explainer on what going concern means when you buy a business covers the general idea. Where the venue is freehold, the combined asset is a freehold going concern. From here, this guide stays on the pub and hotel sale specifically.
Do you keep the staff when you buy a pub or hotel as a going concern?
When you buy a pub or hotel as a going concern, you usually take on its employees, and their service with the seller generally carries across to you. That makes their accrued entitlements a real number to settle at completion, not a detail to sort out later. The rules sit in the Fair Work Act, and they decide what transfers automatically and what you can choose to leave with the seller.
Under the Fair Work rules on a transfer of business, the new employer must recognise each employee's service with the old employer for most entitlements, including sick and carer's leave, parental leave, and requests for flexible working. Some entitlements work differently. Where the buyer and seller are not associated entities, the buyer can choose whether to recognise service for annual leave and for redundancy; if it does not, the seller pays out untaken annual leave and any redundancy when the employee's job with the seller ends. The seller must also give notice of termination or pay in lieu. A transfer of business has a legal trigger, broadly a connection between the old and new employer where a transferring employee does substantially the same work, and where it applies the employee's award or registered agreement can carry across too, so you inherit the industrial instrument, not just the headcount.
| Entitlement | What happens on a transfer of business |
|---|---|
| Sick and carer's leave | ✓ The new employer must recognise the employee's prior service, so the accrued leave carries across. |
| Parental leave and flexible-work requests | ✓ Prior service is recognised, so parental leave and the right to request flexible work carry across. |
| Annual leave | Carries across, unless the buyer and seller are not associated entities and the buyer chooses not to recognise service, in which case the seller pays out the untaken leave. |
| Redundancy pay | Where the parties are not associated entities, the buyer can choose not to recognise service; if so, the seller pays any redundancy when the job ends. |
| Notice of termination | The seller must give notice of termination, or pay in lieu, when the employee's job with the seller ends. |
The practical move is to agree in the contract who pays out accrued leave and redundancy, and to verify the entitlements in due diligence, so the figure is known before you sign rather than discovered at settlement. This is general information based on the Fair Work rules; what applies to a given venue depends on the award or agreement and the facts, so take advice on the specific deal.
What must the seller hand over in a going-concern sale?
For the sale to work as a going concern, the seller has to supply everything necessary to keep the venue operating, and keep running it right up to settlement. So the contract is really a list of what has to be delivered intact on the day, plus a promise that the doors stay open until then.
In plain terms, everything necessary means the things the venue needs to keep trading from the morning after settlement: the liquor licence and any gaming, the staff arrangements, the stock and plant, the bookings on the system, the supplier and service contracts, the goodwill, and the premises or the lease. Carried on until the day of sale means the venue keeps trading, not shuttered or wound down, right up to completion. If either slips, the sale can stop being a going concern.
Meeting those same conditions is also what makes the sale GST-free as a going concern. We do not repeat the full test here: the tax section of our pub and hotel finance guide and the ATO guidance on selling a going concern set out every condition. The point for the contract is that the hand-over and the trading obligation are exactly what a buyer checks, because they are what a genuine going concern depends on.
Asset sale or share sale? How the going concern is actually bought
A going concern is bought in one of two ways, and the choice is made early because it changes your GST, your duty and the liabilities you take on. You either buy the business assets, the licence, gaming, goodwill, plant and stock, into your own entity, or you buy the company that already owns them.
An asset sale, sometimes called an enterprise sale, is the usual going-concern path, and it is where the GST-free going-concern treatment sits. You take defined assets, the price is allocated across the property, plant, goodwill and any gaming, and the licence and gaming transfer into your entity. A share sale means you step into the existing company, so its licences and contracts usually stay in place without a re-transfer, but you also inherit the company's history, its tax position, its employee liabilities and any disputes, which is why the due diligence is heavier. The tax and duty detail belongs with your accountant and the ATO; the point here is that the sale structure is the decision that drives the GST, the licence transfer and the employee position in the sections around it.
| Consideration | Asset (business) sale | Share (company) sale |
|---|---|---|
| What you buy | The business assets: the licence, gaming, goodwill, plant and stock | The company that owns the business, and everything inside it |
| Where GST-free going concern applies | ✓ The usual home of the GST-free going-concern treatment | Not the going-concern path; a different GST and duty treatment applies |
| What transfers without re-registration | The licence and gaming transfer into your entity, so they are re-registered | Licences and contracts usually stay in place inside the company |
| Liabilities you inherit | Only the defined assets you buy, not the company's past | The company's full history: tax, employee and any disputes |
| Price allocation and duty | Price allocated across property, plant, goodwill and gaming | You buy shares, so duty and price allocation work differently |
| Due-diligence weight | Focused on the assets and their clean transfer | Heavier, because you inherit the whole entity |
Neither route is right in the abstract; the choice follows the venue, the entities and the advice, and it is worth settling before the contract is drawn rather than after. How each structure is then financed follows the same going-concern read, which is why the finance sits on the pillar rather than here.
What should you check before signing a contract to buy a pub or hotel?
Before you sign, verify that the venue you think you are buying is the same venue that can legally and practically transfer to you and keep trading after settlement. That means checking the trade, the licence and gaming, the premises, the employees, the plant, the bookings, the contracts, the stock and the obligations customers have already paid for. The goal is not only to confirm value. It is to find anything that changes the price, the contract conditions, the settlement funds or the cash the venue needs on day one.
| Due-diligence area | What to verify | Why it matters to the sale |
|---|---|---|
| Trade and seasonality | Reconcile the financials with POS, bank, BAS and operating records; separate bar, food, accommodation and gaming where relevant; test unusual add-backs and future bookings. | A gap can change the price, the valuation, the finance case or the working capital you need after settlement. |
| Liquor licence and gaming | Confirm the exact licence, conditions, approved areas, gaming entitlements, current compliance position, transfer path and any manager or responsible-person requirements. | A restriction, missing entitlement or late application can change how the venue trades or delay settlement. |
| Freehold or leasehold premises | Check the title or lease, remaining term and options, rent, outgoings, permitted use, repair obligations and any landlord consent needed. | The business cannot operate as sold if the premises or the right to occupy them does not transfer cleanly. |
| Employees and payroll | Check the employee list, service dates, classifications, award or agreement, rosters, accrued leave, superannuation, disputes and any proposed changes. | These affect the liabilities allocated in the contract, payroll from day one and the staff you actually retain. |
| Plant, equipment and fit-out | Match the asset register to what is on site; identify leased or financed items, maintenance issues, serial numbers and any registered security interests. | An item in the venue may not be owned outright by the seller or may need a release before it can pass to you. |
| Bookings and customer obligations | Review future functions, room bookings, deposits, gift cards, loyalty balances, refunds, chargebacks and any promises made to customers. | Money received before settlement can create service obligations after settlement, so the contract must say who receives the benefit and carries the obligation. |
| Suppliers and operating contracts | Check supply, linen, waste, security, music, software, booking, maintenance and other contracts, including whether they assign or need new accounts. | A venue can settle but still fail operationally if essential services stop or a key contract cannot continue. |
| Stock, floats and working capital | Agree the stocktake method, treatment of obsolete stock, ownership of stock, opening till or gaming floats and the cash needed to trade after completion. | These items affect the funds required on the day and whether the business can operate before its first post-settlement revenue cycle. |
From the finance side, the useful pack is not just the financials. Put the contract, information memorandum, lease or title details, licence and gaming schedule, employee-liability summary, asset list and key trading records in front of the broker early. A loan can be ready while the sale is not, so the contract, licence, people and finance need to be tested together before the deal becomes unconditional.
Who should review a pub or hotel purchase before the contract goes unconditional?
A licensed-venue purchase crosses legal, tax, employment, licensing, operational and finance issues. The buyer normally needs each adviser to clear a different part of the same transaction before the contract becomes unconditional, rather than asking one adviser to carry the whole deal.
| Adviser or party | What they should clear | Why the timing matters |
|---|---|---|
| Solicitor or conveyancer | The sale structure, going-concern wording, conditions precedent, lease or title, consents, warranties, employee allocation, hand-over obligations and settlement adjustments. | The contract controls what you must buy, what you can walk away from and what happens if a condition is not met. |
| Accountant or registered tax adviser | The GST treatment, price allocation, duty and tax consequences, working-capital needs, quality of earnings and the treatment of employee and customer liabilities. | These can change the real acquisition cost even where the headline purchase price does not change. |
| Finance broker and lender | The entity and security structure, valuation path, information required, finance conditions and whether the approval timetable matches the contract and licence timetable. | Finance approval should not expire or become unconditional before a critical sale condition is understood. |
| Licensing or gaming adviser and regulator | The buyer's eligibility, transfer application, conditions, approved areas, gaming position, interim or provisional trading arrangements and expected timing. | The licence path commonly sets the practical settlement clock for a licensed venue. |
| Employment or workplace adviser and payroll team | The transfer-of-business position, awards or agreements, service recognition, accrued entitlements, notices, payroll setup and any planned role changes. | Staff liabilities and payroll cannot be reconstructed safely on the morning after settlement. |
| Buyer and operating team | The roster, suppliers, systems, bookings, access, insurance, stock, floats, compliance records and the first week of trading. | The advisers can close the transaction, but the operator still has to open the doors and run the venue. |
The practical test is simple: every condition in the contract should have a named person responsible for clearing it, a document that proves it is cleared and a date that fits the settlement timetable.
What conditions gate settlement on a going-concern purchase?
A going-concern purchase only completes when the money, the licence and the business line up on the same day. So the deal is built on conditions precedent, the things that must be true before settlement can happen, and on a licensed venue the licence transfer, not the loan, is usually the real clock.
The liquor and gaming transfer is applied for with the state regulator, and the venue can usually keep trading under a provisional or interim arrangement while the application is assessed, so contracts commonly make settlement conditional on the transfer. In New South Wales, for example, Liquor and Gaming NSW lets a business keep operating while a transfer is considered, gives provisional approval, usually within about four weeks of a complete application, and confirms the transfer later, usually within about 60 days. On a leasehold, the landlord's written consent to the assignment is another condition. And if the sale does not meet the going-concern test, GST becomes payable, a 10 percent cost swing at settlement that changes the funds you need on the day.
| Part of the venue | What a clean going-concern sale needs | What can hold it up or reduce it at settlement |
|---|---|---|
| The liquor licence | Transfers to your entity so you can trade | Regulator approval can outrun a fixed settlement date, so it is set as a condition |
| Gaming machine entitlements | Transfer with the venue, held inside it | Some states condition transfers or forfeit a share when blocks move, so the count can change |
| The employees | Move across with their recognised service | Unquantified leave or redundancy surfaces as a cost at completion |
| Stock and plant | Handed over as counted and listed | A stocktake gap, or plant not owned outright, which a PPSR search reveals |
| Bookings and supplier contracts | Continue, so the venue trades from day one | Contracts that do not assign, or bookings that lapse, thin the going concern |
| The GST-free going-concern status | Both parties agree in writing and the test is met | If a necessary element is missing, GST becomes payable, a cost swing on the day |
New South Wales is the worked example here; the interim-trading position and the timing differ by state, so check your state's regulator early. The value of gaming entitlements and any transfer forfeiture is a separate question, covered in our note on how gaming entitlements are valued on a licensed venue, and the way the licence transfer paces a purchase near the end of the financial year is worked through in settling a venue before 30 June.
What is adjusted and handed over at settlement when you buy a pub or hotel?
Settlement is not just the purchase price moving. The parties have to settle the money items that straddle the hand-over date and deliver the operating control needed for the buyer to trade. The exact adjustments depend on the contract and advice, but the buyer should be able to trace every dollar adjustment and every operational hand-over item to a document or agreed schedule.
| Settlement item | What should be dealt with |
|---|---|
| Purchase price and deposit | The balance price, deposit credit, retentions, agreed deductions and any amount held pending a post-settlement obligation. |
| Stock | The final stocktake, agreed valuation basis, excluded or obsolete stock and the amount added to or included in the settlement figure. |
| Employee entitlements | The agreed allocation or adjustment for accrued leave and other employee liabilities, supported by an up-to-date employee schedule. |
| Rent, rates, outgoings and utilities | Amounts paid or incurred across the settlement date are apportioned as the contract provides, with final readings or account changes where relevant. |
| Bookings, functions, deposits and gift cards | The parties identify money already received for obligations the buyer will perform after settlement and adjust or allocate it under the contract. |
| Keys, codes and physical access | Keys, alarm and safe codes, restricted-area access, gaming and cellar access, lockbox details and any landlord or body-corporate access credentials. |
| Systems, data and accounts | Administrator control of POS, booking, channel-manager, payroll, rostering, Wi-Fi, phones, email, domains, social profiles and operational records, subject to privacy and contract requirements. |
| Licences, consents and operating records | Evidence of the licence position, gaming transfer, landlord consent, permits, approved plans, compliance records, incident registers and other records needed to operate. |
| Plant ownership and security releases | Asset schedules, serial numbers, manuals, warranties, lease assumptions and releases or discharges for any security interest that should not remain over an asset you are buying. |
| Supplier and service continuity | Assignment notices, new-account approvals, contact lists, standing orders and confirmation that essential services will continue through the hand-over. |
A clean settlement pack therefore has two sides: the solicitor's settlement statement for the money, and an operator's hand-over schedule for the venue. One can be correct while the other is incomplete, which is how buyers end up owning the business but still chasing passwords, supplier contacts or records from the seller.
What must be ready for the first trading day after settlement?
By the first trading day, the buyer needs legal authority, people, money, systems, stock and access under their own control. The hand-over is complete only when the venue can open, serve customers, take payment, meet existing bookings and close without depending on the seller.
- Authority to trade: confirm the licence, gaming, lease or ownership position, insurance and any responsible-person or manager requirements that apply from hand-over.
- Keys and system control: take possession of every key, code, device and administrator account, then change shared passwords and remove access that should not continue.
- Staff and payroll: issue the roster, confirm who is transferring, set up payroll and superannuation, load recognised service and entitlements, and give staff a clear contact for the new employer.
- Banking and payments: make sure EFTPOS, merchant facilities, POS, online payments, cash handling and any gaming-related banking arrangements settle to the correct accounts.
- Bookings and customer promises: import future bookings, functions, deposits, gift cards, loyalty balances and special arrangements so customers do not experience the ownership change as a service failure.
- Suppliers and essential services: confirm food and beverage supply, linen, waste, security, utilities, internet, software, maintenance and emergency contacts before the seller's accounts close.
- Opening stock, floats and records: have counted stock, agreed floats, compliance registers, manuals, incident records, emergency procedures and the first week's operating cash ready.
How should the finance clause fit around going-concern settlement conditions?
The finance clause should protect the same path the sale depends on. On a going-concern venue, the approval and settlement timetable may depend on the going-concern valuation, the licence and gaming transfer, the final sale structure and, on a leasehold, the landlord's consent. Those conditions should be identified before the contract becomes unconditional, with enough time for valuation, credit assessment, documents and settlement to occur after the sale-side conditions are ready.
That is the sequencing point, and it is deliberately all this short section covers. How much you can borrow, the deposit and loan-to-value bands, how a licensed venue is valued, serviceability, the costs and who lends are all set out in the pub and hotel finance guide, and our note on the going-concern valuation explains why the loan is sized on the assessed value rather than the asking price. When you are ready to have a specific purchase packaged, the pub and hotel finance page is the place to start.
What makes a pub going-concern sale settle cleanly or fall over?
After enough of these, the venue sales that settle cleanly and the ones that fall over at the last minute start to look predictable. The difference is rarely the loan. It is whether the licence, the contract and the people were handled early. Here is the pattern from the broking desk, on the sale and settlement rather than the lending.
Settles cleanly
- The licence and gaming transfer is lodged early, not after the contract goes unconditional
- The going-concern clause and asset schedule are complete, so nothing necessary for trading is missing
- The trade is held up to settlement, with staff, bookings and suppliers staying in place
- Accrued employee entitlements are quantified and allocated in the contract
- The finance clause is conditional on the same things the sale is
Falls over at settlement
- The licence transfer is left too late, so settlement cannot complete
- The sale is dressed as a going concern but a necessary element is carved out, so GST becomes payable
- The seller winds the trade down before completion
- Leave or redundancy liabilities are unquantified and surface on the day
- The finance clause and the settlement conditions are drafted out of step
From the broking desk, indicative
In our broking experience, the licence and gaming transfer is commonly the longest pole in a going-concern venue settlement, so it is worth building the timetable around it and running a Personal Property Securities Register search on the plant and gaming early, before you are committed. If you want to see where you stand before you sign, you can check your eligibility in a few minutes.
Indicative only, from broking experience as at July 2026, not a promise, an offer or an approval likelihood. The licence process and the interim-trading position vary by state and regulator.
The going-concern settlement, step by step
Put together, the buyer journey runs in a set order:
- Test the venue before signing: review the trade, licence and gaming, premises, employees, assets, bookings, customer obligations, supplier contracts and working-capital needs.
- Build the deal team and contract: align the solicitor, accountant, broker, licensing advice and operating team, then sign with the right finance, going-concern, licence, landlord and other conditions.
- Valuation and trade review: the going-concern valuation and the finance review proceed against the actual sale structure and information pack.
- Lodge the licence and gaming transfer: start the regulator process early and track every consent or condition that can pace settlement.
- Clear finance and sale conditions: move formal approval, loan documents, licence, landlord consent and any other conditions toward the same settlement date.
- Lock the adjustments and hand-over schedule: finalise employee figures, stocktake method, customer obligations, outgoings, asset releases, keys, records, systems and supplier continuity.
- The seller keeps trading: preserve the staff, bookings, stock, suppliers and goodwill through to completion rather than winding the business down early.
- Settle and open under buyer control: the money, licence position, employees, stock, access, systems and goodwill move together so the venue can trade the next morning.
That sequence is the same whether the venue is metro or regional, and it tightens near the end of the financial year. The wider toolkit across accommodation deals sits in our accommodation finance hub, and when your purchase is ready to be packaged, the pub and hotel finance page is where to have your going-concern purchase packaged.
Buying a pub or hotel as a going concern is a chain, not a single settlement event. Before signing, verify the trade and every essential element that has to transfer. Before going unconditional, give each legal, tax, licence, employment, finance and operating condition an owner and a deadline. At settlement, reconcile the money and take control of the people, stock, keys, systems, records, customer obligations and supplier relationships needed to trade. The real test is whether the venue can open the next morning without depending on the seller.
Key takeaway: work backwards from day one. The contract, licence, employees, hand-over and finance should all be built to deliver one outcome: an operating venue under the buyer's control.Frequently Asked Questions
Usually, yes. Buying a venue as a going concern normally means taking on its employees, and their service with the seller generally carries across to you, which is why their entitlements are part of the deal. Under the Fair Work rules on a transfer of business you must recognise prior service for most entitlements, though some, such as annual leave and redundancy, can be handled differently where the buyer and seller are not associated entities. Agree who carries what in the contract.
Under Australia's Fair Work rules, accrued annual leave either carries across to you, or, where you and the seller are not associated entities and you choose not to recognise service, the seller pays out the untaken leave. Redundancy works the same way: if you do not recognise prior service and the parties are not associated, the seller pays any redundancy when the job ends. The move is to quantify these in due diligence and say in the contract who settles them, so nothing surfaces unpriced at completion. General information, not advice.
Everything necessary for the venue to keep operating, and the seller must keep running it until the day of sale. In practice that means the liquor licence and any gaming, the staff arrangements, the stock and plant, the bookings, the supplier contracts, the goodwill, and the premises or the lease. If a necessary element is carved out, or the venue stops trading before completion, the sale can stop being a going concern.
Because regulator approval can take longer than a fixed settlement date, contracts usually make settlement conditional on the licence transfer, so the deal completes when the transfer is in hand rather than before. If the transfer is not ready, settlement is typically held rather than forced. This is why the licence transfer, not the loan, is usually the real clock, and why it is lodged early. The process differs by state, so check your state's regulator.
In many states, yes. In New South Wales, for example, Liquor and Gaming NSW lets a business keep operating while a transfer is considered, giving provisional approval and confirming it later. That interim-trading position is part of what keeps the going concern intact through settlement. The rules and the timing vary by state, so confirm the position for the venue's state early.
If the conditions are not met, the sale is not GST-free and GST is payable on it, a 10 percent cost swing that changes the funds you need at settlement. The ATO treats a sale as GST-free only where the sale is for payment, the buyer is registered or required to be registered for GST, both parties agree in writing that it is a going concern, and the seller supplies everything necessary and trades until the day of sale (ATO, selling a going concern). This is general information, not tax advice; confirm the treatment with your accountant.
No. Buying the building only is a property purchase, funded and valued as property alone. Buying the operating venue with its licence, trade and people is a going-concern purchase, and it is the going concern that transfers to you on settlement. The two are different transactions, with different tax, different finance and different due diligence.
Before signing, verify the venue's trade, licence and gaming, lease or title, employees and accrued entitlements, plant ownership and PPSR interests, stock, bookings, gift cards, supplier contracts, and any consent needed for the business to keep trading. The key question is not only whether the venue is profitable, but whether every essential part can legally and practically transfer to you on settlement.
The contract and settlement statement usually deal with the purchase price and deposit, stock, employee entitlements, rent, rates, outgoings and utilities, plus customer money already received for future bookings, functions, gift cards or similar obligations. The exact treatment depends on the contract and advice. Separately, the buyer should receive the keys, access credentials, records, system control, asset releases and evidence that the required licences and consents are in place.
You need authority to trade, keys and security access, staff rosters and payroll, bank and EFTPOS control, POS and booking-system access, opening stock and floats, supplier and utility continuity, insurance, compliance records, and a clear plan for existing bookings, deposits and gift cards. A clean hand-over means the venue can open, serve customers, take payment and close without depending on the seller.
The common ones sit in the sale, not the loan: a licence transfer left too late, a necessary element carved out of the sale so the going-concern status fails, a seller winding the trade down before completion, unquantified leave or redundancy, and a finance clause drafted out of step with the settlement conditions. Working the licence, the contract and the people early is what keeps a settlement on track, and a Personal Property Securities Register search on the plant and gaming is worth doing before you commit.
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