What is a Section 52 Statement?

Business Law: 14 May 2025

Author: Joel Parsons - Our People

A “Statement by a vendor of a small business” or “Section 52 Statement” (Statement) is a legal document required for the sale of a small business in Victoria.

For the purposes of section 52 of the Estate Agents Act 1980 (Vic) (the Act), a “small business” is generally defined as a business where the sale price for goodwill, plant, equipment, and fittings is $450,000 or less. This means that stock and intellectual property do not form part of this calculation.

Section 52(1) of the Act states that before obtaining their signature or accepting their deposit, a vendor or duly authorised estate agent selling a small business must provide to the purchaser, or any person duly authorised to sign on behalf of them, a written statement in the prescribed form containing the prescribed particulars and obtain written acknowledgement of receipt of the Statement from the person to whom the Statement was given.

Typically prepared by the vendor’s accountant, with assistance from the vendor and their lawyer, the Statement acts as a disclosure and due diligence guide for the purchaser, detailing the financial performance of the business over the last 2 completed financial years (if the business has existed for that period), and to the end of the most recent quarter of the current financial year. The Statement must also be approved by a registered accountant.

The Statement must include all content set out in the template document contained in Schedule 1 of the Estate Agents (General, Accounts and Audit) Regulations 2018 (Vic). These are:

• Important information for Vendor;
• Important information for Purchaser;
• Business information Section;
• Vendor’s Business Operating Report;
• Vendor’s declaration; and
• Acknowledgement of Receipt by the Purchaser.

Pursuant to s 52(3) of the Act, if the Statement:

• is not in the prescribed form; or

• does not contain the prescribed particulars; or

• states any particulars inaccurately; or

• is not provided,

the purchaser may by notice in writing to the vendor or their estate agent within 3 months after they first sign any contract relevant to the sale, or before they take possession of the business, avoid the contract.

If the contract is avoided, the vendor must repay to the purchaser any money paid under the contract and is recoverable as a civil debt.

Importantly however, this right to avoid the contract only remains if the purchaser has not taken over the business and settled the sale.

The parties cannot ‘contract out’ of the requirement for providing a Section 52 Statement.  Any provision of a contract that seeks to avoid the operation of any provision of section 52 of the Act is void and of no legal effect.

A vendor or an estate agent who fails to duly provide a statement is guilty of an offence and liable to a penalty of up to 10 penalty units ($1,975.90 as at 15 April 2025).

Despite the strict requirements of the Act, there is an exception. Section 52 of the Act does not apply to the sale of any business in connection with which a license or permit is in force under the Liquor Control Reform Act 1998 (Vic) (LCRA) and which the purchaser could not lawfully carry on without that license. Pursuant to section 7 of the LCRA, the licenses and permits that may be issued under the LCRA are:

• general licences;

• on-premises licences;

• restaurant and café licences;

• club licences;

• packaged liquor licences;

• late night licences;

• remote seller’s packaged liquor licences;

• pre-retail licences;

• producer’s licences;

• limited licences;

• major event licences; and

• BYO permits.

If you would like to discuss selling or purchasing a small business, please contact Aitken Partners’ experienced and friendly Commercial and Property Law Team on (03) 8600 6000 to discuss your options.