If you are in business, you will understand the many legal issues that can arise in a competitive and regulated market. Whether you are starting out, growing, or selling a business, there is much to consider to ensure that your business is compliant and structured to manage risk. We assist various clients from different industries, advising on a range of commercial and business law matters, including:
- Buying and selling a business
- Business structures and restructures
- Asset protection and business succession planning
- Commercial contracts – drafting, negotiating, advising
- Loans and securities / advice for guarantors
- Shareholder agreements / partnership agreements / joint venture agreements
- Commercial and retail leasing
- Intellectual property
- Advice for non-profit organisations
Are you buying or selling a business?
The sale of a business is a high-stake situation for both buyer and seller.
If you are selling your business, you want the best possible price. To achieve this outcome, you may be willing to trade off other terms. For instance, you may be willing to wait longer to receive all of the payment, or you may even be willing to provide advice during the transition to the new owner.
If you are buying, you want to make sure that you are going to get everything that you need to run the business successfully. What this involves will vary from situation to situation. You should investigate whether you can take over any existing lease for where the business operates, if you will own the business’s stock, plant and machinery, and if you will receive the business’s existing intellectual property (such as logos and trademarks). You may also need to know if you are eligible to obtain the licences required to run the business, whether there are any ongoing contracts that you need to fulfil, or service contracts that will continue after the sale.
To understand what you need to know, and to negotiate the best possible outcome, you need an experienced business solicitor in your corner.
Deciding on a legal structure for your business
We can help you make an informed decision and put in place a legal structure that suits the needs of you and your business.
If you are starting a business as an individual, operating as a sole trader is a simple option, however, under this structure you will be responsible for all debts and liabilities which the business incurs.
If your new venture involves business partners, a partnership may be used, however it is important to note that with this structure all partners are typically responsible for all debts and liabilities of the business. For this reason, some prefer the protection afforded by a limited liability company.
A company, which is registered with the Australian Securities and Investments Commission, operates as a separate legal entity and may provide a better solution when it comes to the tax payable on your profits.
To maximise the protections provided by a company, a lawyer may suggest that you form a trust. A trust may provide further tax benefits and limit your liability, however, it may be more costly and complicated to manage.
Are you entering into a joint venture or partnership?
A joint venture is two or more people, companies, or organisations who work together for a specific, limited purpose or project. The project may be a short or long-term venture, but the distinguishing characteristic is that there is a single focus for the venture. A joint venture allows entities to collaborate and combine resources or expertise, but the joint venture is its own legal entity, separate to any other business interests of the participants.
These ventures are usually created with a joint venture agreement, which is a legally binding contract that sets out the objectives of the venture and the responsibilities of each party. It is important to remember that each participant in the venture is equally responsible for any associated profits, losses, and costs.
A partnership is distinct from a joint venture in that a partnership is parties coming together to operate a continual business with the aim of making a profit. Unlike a joint venture, a partnership can involve many different ventures, all operating under the legal entity of the partnership.
A partnership is usually established through a partnership agreement that outlines the duties and responsibilities of each partner. This agreement also establishes how the parties should make decisions and resolve disputes within the partnership.
Are you acting as a guarantor or providing a security?
If you agree to be a guarantor, you will be forced to take responsibility for the original borrower’s debt if they default on their loan. A guarantor is often a person acting as guarantee on behalf of their own small business. With larger businesses, it may be a company acting as a guarantor for a loan extended to a subsidiary company.
The terms of the guarantee must be set out in writing in the guarantee document. It is vital that you understand all of the terms of the guarantee before you sign, as you may incur more onerous terms of loan repayment than the original debtor.
You may be considering offering a security to secure a loan. You may be asked to enter into a general security agreement known as a “fixed and floating charge”. This security covers all of the assets of the borrower. This form of security does not need to be registered, and it also does not need to be linked to any particular property.
Alternatively, you may be asked to sign a security document called a “specific security agreement”. This type of security agreement can be entered into the PPSR register so that potential future lenders are informed of the original lender’s security.
Are you a not-for-profit or charity needing legal advice?
Not-for-profits and charities often need specialist legal advice. If you run this type of entity, you may need help to establish or restructure, or you may need advice if you are planning a collaboration or merger. A specialist solicitor can also provide targeted tax advice, help to create or operate charitable trusts, or support your organisation in its efficient governance, compliance and risk management.