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Business & Commercial Law

Business and commercial law encompasses the many transactional and compliance matters that an owner might encounter, from leasing commercial property, to drafting and reviewing business contracts, and understanding taxation and superannuation requirements. It also governs the formation of companies, the legality of company mergers and acquisitions, as well as shareholder rights.

We can help whether you are starting a new venture, expanding, retiring, or trying to recover a debt. We offer commercial law services for a range of businesses operating across various industries. As registered tax agents, we have a thorough understanding of the financial and taxation implications of business structures and transactions and can provide tailored advice in these areas.

Buying or Selling a Business

Buying or selling a business requires careful planning to ensure that all relevant terms and conditions are properly negotiated and documented in a written contract. Each party needs to be on the same page.

We can help by preparing, reviewing, and negotiating the terms as well as advising on the financial and taxation aspects so the transaction can be structured for an optimum outcome and to protect your interests. You may need to consider:

  • the structure and apportionment of the purchase price – the breakdown of goodwill, stock, plant, equipment, and inventory
  • the tax implications such as transfer duty, goods and services tax (GST), and capital gains tax (CGT)
  • the suitability of and transfer arrangements for ancillary agreements such as commercial leases and service contracts
  • intellectual property such as business names, trademarks, and domain names and provisions for transferring these assets to the new owner
  • employment arrangements for existing employees, transfers, offers, redundancies, and calculation of leave and other entitlements
  • restraint of trade and confidentiality provisions
  • agreed training periods, representations, and warranties

Setting up a Company

While many businesses can operate successfully as sole traders or through a partnership, setting up a company generally offers business owners more legal and financial protection, and can be ideal if there are plans to grow the business. We can help you choose a business structure that is right for your circumstances and, if relevant, register your new company.

A company is a separate legal entity to the business owner. It must have at least one shareholder (owner) and one director (who runs the business). Any income or losses incurred by the company belong to the company, and both the shareholders and directors are generally insulated from any losses. However, this does not mean that company directors have no obligations. A director is responsible for a company and has positive obligations and the personal penalties for deliberate breaches of a director’s obligations can be severe.

One of the first steps in company registration is choosing a name. The owner should check the proposed name against existing businesses to ensure that it is available. However, registering a company name with ASIC does not protect the name against third party claims for trademark infringement. Anyone registering a company should check the proposed company name does not infringe on an existing registered trademark by using IP Australia’s Trade Mark Search database.

Partnership Agreements, Shareholder Agreements, Unitholder Agreements

If you have an interest in a business or trust, it is important to have written documents in place to set out the rights and responsibilities of those involved. We can draft a range of documents to help protect your interests and steer the management and direction of your operations.

Partnership Agreements

A partnership agreement is a contract between partners in a business. It should outline the duties and responsibilities of each partner and set out how to make decisions and resolve disputes within the partnership. It should also contain provisions regarding profit sharing, transfer, retirement, and termination of the partnership.

Shareholder Agreements

 A shareholder agreement is a binding contract between the shareholders of a company. It governs the relationship between the shareholders and specifies who controls the company, how the company is owned and managed, how shareholders’ rights are protected and how they can exit the company. A robust shareholder agreement provides a framework for the transparent ownership and management of a company. If a shareholder agreement is materially breached, an aggrieved shareholder can bring a cause of action against another shareholder.

Unitholder Agreements

A unitholder agreement is a contract between the unitholders of a unit trust and the trustees. This agreement sets out how the trust operates and generally covers:

  • the trust’s funding
  • structure
  • governance
  • associated commercial outcomes
  • the duties and obligations of stipulated unitholders

Debt Recovery

The financial viability of your business is heavily dependent upon whether accounts are paid on time. A business can often recoup an outstanding account with a friendly reminder. When informal methods fail to work, the next step may be to outsource the debt recovery to a lawyer.

There are different strategies to use to recover an unpaid debt and the type of action taken may depend on the debtor entity (whether an individual or company), the amount owed, the capacity for the debtor to pay, and whether the debt is disputed.

Sometimes a letter of demand from a lawyer will be enough to encourage the debtor to pay the outstanding amount. Alternatively, you may need to start proceedings in court to recover the debt. If the debtor is a company, serving a statutory demand under the Corporations Act 2001 may be a viable option.

We can help you determine the most appropriate and cost-effective solution to recover your outstanding debts and, in many cases, repayment of your legal costs. We can also help draft your terms of trade and to implement credit control practices to help your business minimise bad debt and improve cashflow.

If you need assistance, contact [email protected] or call 02 6736 1888 for expert legal advice.