What was broken
A logistics-technology company received an acquisition approach from a larger strategic buyer. The founders wanted to be transaction-ready, but their compliance, contracts, and financial records were not organised to withstand acquirer diligence, and unaddressed gaps risked delaying or repricing the deal.
What we did
CapEasy ran a sell-side readiness exercise — organising financials and tax records, closing compliance and secretarial gaps, reviewing key contracts for change-of-control and assignment terms, and assembling the diligence data room. We surfaced and remediated risk areas before the acquirer’s advisors reached them.
Where it landed
The company entered acquisition diligence organised and remediated, allowing the process to proceed efficiently and with fewer value adjustments. The founders negotiated from a position of readiness rather than reaction.
What an Australian buyer’s advisers actually pull
Under the Corporations Act, a company must maintain a register of members and, where relevant, a register of option holders — with the register of members recording each holder’s name, address, the date entered, and the shares held. A buyer’s lawyers reconcile that register against every share certificate, allotment minute and transfer document before they will call ownership settled. A register that has not been updated since the last allotment, or that disagrees with the minute book, is treated as a defect to be priced into the offer or fixed before signing — not waved through.
Alongside the share register sits a second check most first-time sellers underestimate: a Personal Property Securities Register search. The PPSR is the national register of security interests over personal property — equipment, stock, receivables, intellectual property — and any prudent buyer runs a grantor search against the company before completion. A registration that was never discharged after an old equipment loan or invoice-finance facility ended shows up as an encumbrance on assets the buyer expected to receive clean, and it has to be released, or a comfort letter obtained from the secured party, before completion can proceed on schedule.
The record trail the ATO relationship has to survive
Diligence does not stop at ownership — it tests whether the company’s tax position holds up. The ATO’s general rule is that most records must be kept for five years from when they were prepared, obtained, or the transaction they relate to was completed, whichever is later; company records typically need to be kept longer again. A sell-side review checks that BAS lodgements, activity statements, Single Touch Payroll data and superannuation guarantee payments for every quarter reconcile against the ledger for that full window — because a buyer’s tax due diligence will ask for the same reconciliation, and a gap found by their side costs more than one found by yours.
The same review looks at employee entitlements: leave balances, superannuation guarantee timing, and any outstanding STP finalisation. These sit outside the share register but inside the price a buyer is willing to pay, because unpaid or understated entitlements become the buyer’s liability the day the deal completes.
The rebuild method that transfers directly
The engagement’s method is the one that survives an Australian sell-side process unchanged: reconstruct rather than patch. Walk the register of members against every transfer instrument, run the PPSR grantor search early enough to clear or release anything registered, tie five years of activity statements and STP data to the ledger, and review key contracts for change-of-control and assignment clauses before the buyer’s lawyers flag them. The output is a data room where every figure and every register entry points to the document that created it.
CapEasy’s part is the reconstruction and the reconciliation — organising the financial and compliance record, preparing the schedules a buyer’s advisers will test, and building the data room around them. Everything is prepared for your registered BAS or tax agent to lodge, and share transfers and register updates are executed by your solicitor and company secretary of record.
What to take from it
- A buyer’s lawyers reconcile the register of members against every allotment and transfer document — an unreconciled register is a defect priced into the offer.
- Run a security-interest register search on the company early; an undischarged security interest from a closed facility has to be released before completion, not during it.
- Tax records generally need to survive years of scrutiny, and company records longer still — reconcile statutory filings and payroll data to the ledger before a buyer’s advisers do.
- Employee entitlements and retirement-contribution timing sit outside the cap table but inside the price — reconcile them with the same rigour as the ledger.
- Rebuild the record from source documents forward; a data room assembled by patching last year’s file fails the same questions the acquirer’s advisers ask twice.