Buying or Selling a Business
Buying or selling a business requires careful planning to ensure that agreed terms and conditions are properly negotiated and documented in a written contract.
The contract should detail the parties’ rights and obligations, deal with GST matters and set out processes to manage various contingencies.
Your contract and incidental agreements (i.e. lease or hire agreements) should be properly reviewed with due diligence prior to any settlement
Business contracts are fundamental to any enterprise and govern the legal rights and responsibilities of the parties for a range of commercial transactions. These include supply / service agreements, partnership / shareholder agreements, licence agreements, employment contracts and loan agreements.
Business structures are an important consideration with any venture. The structure through which your business operates is chosen with regard to your personal and financial circumstances, your goals and future plans for the business.
For a small enterprise it may be appropriate to operate as a sole trader or partnership.
A formal partnership agreement assists in governing the parties’ relationship and sets out agreed processes for matters such as termination, retirement, sale of partnership shares and business succession.
The business may operate through a corporate structure by registering a limited liability company which provides a certain level of protection for its officers and shareholders for liability for the company’s debts.
Similarly, a trust structure may be appropriate, providing asset protection and favourable taxation benefits, however these are complex and must be properly set up and administered to ensure the benefits outweigh the costs and ongoing fees.
Commercial and Retail Leases
Commercial and retail leases set out the legal terms and conditions through which the business may occupy premises to run the enterprise. Whether you are a lessor or lessee, a lease agreement should be formally prepared and reviewed by an experienced lawyer to ensure a balance of rights between the parties. Many lease disputes can be avoided with careful drafting to ensure all terms and conditions are clear and complete.
Franchises are governed by a Franchising Code of Conduct which sets out the rights and responsibilities that apply to franchisors and franchisees. It is important for the parties to be aware of these obligations when entering into a franchise agreement.