Commercial & Business Law
Being an entrepreneur takes fortitude, whether you are starting out on your own, partnering with like-minded associates, or registering a company. Australian businesses operate in a regulated environment and owners and managers have a range of compliance and reporting obligations to meet. Due diligence is critical for any new venture and there will be many pitfalls, challenges, and opportunities to navigate throughout your business journey. As your trusted advisors, our experienced lawyers can help with a range of business and commercial law matters, whether you are:
- starting, buying, or selling a business
- incorporating a company / preparing shareholder agreements
- entering a partnership / drafting a partnership agreement
- registering or transferring a business name
- choosing a legal structure for your business
- employing staff or making changes in the workplace
- sourcing finance or leasing equipment
- leasing retail or commercial premises
- investigating franchising opportunities
- chasing unpaid debts
- involved in a commercial dispute
Buying or Selling a Business
If you are buying or selling a business, we can work with you and your accountant to structure a transaction that considers both the legal and financial implications. Your negotiations should be documented in a written contract which will need to deal with a range of matters such as:
- how the purchase price will be apportioned, taking into consideration goodwill, stock, plant, equipment, and inventory
- the calculation of Goods and Services Tax (GST) and whether there are other taxation implications such as Capital Gains Tax (CGT)
- the suitability of existing ancillary agreements that will need to be transferred to the new owner, i.e., commercial leases and service contracts
- arrangements for transferring intellectual property such as business names, trade marks, and domain names
- the arrangements for existing employees whether they will transfer to the new business owner or be made redundant, and how leave and other entitlements will be calculated and apportioned
- restraint of trade and confidentiality provisions
- agreed training periods, representations, and warranties
Choosing a Business Structure
When setting up your business, it is important to choose a structure that will best suit you and your new venture. This will consider your financial and personal circumstances, the industry in which you operate, and any plans for future growth. We can explain the pros and cons of each structure and provide guidance on the relevant obligations and reporting requirements.
If you are starting your business alone and it will be a small enterprise, you may wish to operate as a sole trader. A sole trader is legally responsible for all aspects of the business and operates using an Australian Business Number (ABN).
If there are others involved in your business venture, you might consider going into a partnership. A formal partnership agreement can set out your arrangements so that the business partners are aware of their responsibilities. An agreement can also set out procedures for termination, retirement, or sale of the business as well as processes to value the business or to resolve disputes, if necessary.
You might wish to operate your business using a company, by setting up a registered corporate entity. Corporate structures can provide some level of protection for directors and officers, as they have their own legal status. However, there are ongoing costs associated with this structure and annual reporting obligations. Company directors also have a range of duties in carrying out their role.
A trust structure may be useful for protecting assets and it may also offer taxation benefits. Trusts however are complex, and it is important that they are set up and administered properly to ensure that they achieve the expected benefits.
Commercial and Retail Leasing
A commercial lease governs the legal relationship between a lessor and lessee regarding the lessee’s right to occupy premises to carry out their business operations. It sets out the rights and responsibilities of each party and is a significant financial commitment for both. A defective lease can have dire consequences for both property owners and tenants. Retail leases in particular are specialised documents and contain traps that could apply as much to the party collecting the rent as the one occupying the premises.
Leasing disputes often occur because the parties have not been properly advised of their legal rights and obligations or the lease agreement is unclear or lacks specific provisions to deal with events not contemplated at the time of negotiations. A common example is what happens if the leased premises is damaged or if the owner decides to sell the premises.
If you own or lease commercial or retail premises, we strongly recommend having your lease agreement prepared and/or reviewed by an experienced business lawyer. Ensuring each party is on the same page from the beginning of their relationship can help minimise costly disputes and business interruptions.
Commercial Contract Advice
A business transaction should be formalised to create certainty, and enforceable obligations between the parties. The subject matter of a business contract can vary considerably, from a single transaction to the ongoing provision of products or services over many months. The agreement should balance the parties’ respective interests with additional terms to deal with a range of contingencies including mechanisms to resolve disputes. Some contract types will need to comply with certain regulations.
Involving a lawyer to draft and review your business contracts can help to ensure that important provisions are not overlooked, and personal and business interests are protected.
In an ideal world, all customers would pay their bills on time leaving you free to do what you do best – running your business. In reality, however, certain clients will struggle with cashflow, leave a chain of empty promises, or simply ignore your requests for payment altogether.
The decision to pursue an unpaid debt is a commercial one – you need to ensure you take the path most likely to deliver results and that you avoid throwing good money after bad. The legal identity of the debtor must be confirmed, as well as the likelihood of the debtor being able to satisfy the debt should court proceedings result in a judgement in your favour.
The circumstances and the debtor entity might determine whether you start with a letter of demand, go straight to court, or issue a statutory demand under the Corporations Act 2001. There may be room for negotiation, and you could enter into a deed with the debtor for repayment of the debt by instalments. The type of industry in which you operate may have legislation specific to recovering the debt.
We will discuss the circumstances and implement the best strategy to recover the debt, including your legal costs to the greatest extent possible.
If you need assistance, contact one of our lawyers at [email protected] or call 02 9949 4022 for expert legal advice.