- Business Contracts
- Buying or selling a business
- Consumer & Competition Law
- Different Business Structures
The types of business contracts that you may come across will vary according to both the scope and scale of your business as well as the market you operate in. Over time your business needs are likely to grow and evolve and we are here to assist you when that happens.
While it may occasionally be tempting to take a ‘cross fingers and do-it yourself approach’ the reality of the modern business world is that a poorly drafted contract won’t save you money in the long run.
The ideal time to take advice is before entering into a contract. However, if you have already entered a contract without obtaining legal advice we may still be able to assist you and recommend that you contact us sooner rather than later to discuss your options.
Our experienced business and commercial lawyers are able to help with the preparation and execution of a wide range of contracts from the small and seemingly straightforward through to larger more complex transactions.
The range of business contracts that we are able to prepare and advise on include:
• General commercial contracts including negotiating, preparing and drafting new agreements or advising and re-drafting existing contracts;
• Contracts for the purchase and sale of a business;
• Partnership agreements;
• Employment contracts;
• Contracts for the sale and supply of goods and services;
• Agency agreements;
• Distribution agreements;
• Licensing contracts;
• Credit arrangements including credit and finance applications;
• Terms of trade;
• Leases including plant and equipment leases – proactive advice can ensure that you do not agree to unfavourable terms ;
• Franchise agreements;
• Joint ventures;
• Shareholder agreements;
• Commercial and retail leases;
• Confidentiality agreements; and
• Management contracts.
In a perfect world all business contracts would be carefully drafted and prepared and the parties to a contract would all understand their obligations and willingly fulfil their responsibilities under the contract.
If this ‘worst case’ scenario arises we are able to assist you.
While not all contractual or business disputes end up being litigated even disputes that start out as litigated proceedings can often be resolved through thoughtful negotiation and alternate dispute resolution.
Our business and commercial lawyers are skilled at working to diffuse seemingly impossible situations with the aim of achieving timely and cost effective resolutions that allow our clients to get on with running their businesses rather than worrying about contract disputes. If you find yourself in this situation please feel free to call us to discuss your options.
Each different business contract will have at its core a specific set of parameters, aims and potential restrictions. We are adept at negotiating all aspects of contract preparation and negotiation and look forward to assisting you achieve your business goals.
Whether your transaction is large or small or involves the sale or purchase of assets, shares or a combination of both, we can advise and guide you through the entire process from initial enquiry stage through to completion.
If you are considering buying a business there are a number of essential steps that we are able to assist with. These include:
• Undertaking due diligence – Is the business you propose to purchase financially sound?
• Securing finance – Sufficient funds will be needed to cover not only the purchase price for the business but also for Stamp Duty and possibly GST. We can advise you as to the amounts needed and if necessary assist you in completing loan or other finance documentation to ensure that you have the necessary funds in place prior to completing your purchase.
• Business structure – Before purchasing any business you need to consider which business model or structure will be most appropriate for the type of business you are buying.
Options include conducting the business as a sole trader, purchasing in partnership with one or more other parties, setting up a company structure or trust or possibly even a combination of these options. Each option has advantages, risks and limitations and we can advise you on the most suitable structure prior with a view to not only limiting risk but also long term growth and potential.
• Contract documentation – Before purchasing a business we recommend you obtain legal advice to ensure that what is being offered by the Vendor for sale is actually the same as what you think you are purchasing. The optimal time to obtain advice and negotiate contract terms is before the contract is signed not after.
• After completion – Once contracts are signed and exchanged we can advise in relation to payment of stamp duty, registration of your business name and lodgement of any documents for registration such as commercial leases. We are also skilled at providing advice in respect of a range of ongoing business matters such as GST registration, taxation and other legal obligations, insurance needs including public liability and professional indemnity and protection of intellectual property and trademarks.
A key element to successfully selling a business is obtaining early legal advice to ensure that the sale proceeds smoothly.
For any sale of business there are multiple matters that need to be considered including:
• Calculation of the purchase price;
• Negotiating with prospective purchasers regarding terms of the contract including inclusions and exclusions;
• Structuring the sale – Does the sale involve the transfer of shares for part of the business or is it an outright purchase of the entire business?
• Consideration of what is included in the sale – Is it just the business name and goodwill or hard assets such as plant equipment and stock included in the purchase price?;
• Employment issues including whether existing employees are to be kept on by the incoming purchaser and liability for existing employee entitlements such as sick leave and annual leave;
• Whether there needs to be a transfer of contracts with suppliers and clients;
• Property considerations including lease arrangements for business premises;
• Costs of the sale such as broker commissions, legal fees, payment of current business debts and any costs associated with transferring a premises lease to the incoming purchaser (landlord’s expenses if payable under the lease);
• Additional considerations involved in buying or selling a franchise business; and
• Tax (including GST and capital gains tax) and stamp duty implications.
If needed, we are also to assist you in accessing specialist business advisers such as financial planners and business brokers.
Purchasing or selling a business can be a life changing event. As such, it is comforting to know that all legal aspects of the transaction are able to be handled by skilled and experienced legal professionals who will act with your best interests in mind at all times. We recommend you contact us as early as possible in the sale or purchase process to ensure that we are able to fully assist you with this important life event.
Consumer protection provisions are contained in Schedule 2 of the CCA. Schedule 2 is referred to as the Australian Consumer Law (ACL).
The ACL deals with the types of conduct and issues that most affect consumers such as misleading or deceptive conduct, unconscionable conduct, unfair practices, conditions and warranties, product safety information, manufacturer’s liability for goods with safety defects and which party will be responsible for defects in imported products. The ACL has been adopted as a model for the fair trading regimes used throughout in the various Australian states and territories. Often the state based legislation is referred to as a Fair Trading Act.
Understanding your obligations under the CCA and the ACL as well as how this legislation is administered is a necessary and important part of successfully conducting business in Australia today.
The ACCC is an independent statutory authority tasked with being the principle regulator of all competition and consumer legislation in Australia. As such it is a powerful body with significant responsibilities.
From 12 November 2016 the Unfair Contract Terms Regime (UCT Regime) will be extended to cover standard form contracts entered into with ‘small business’. The changes will apply to any standard form small business contract for the supply of goods and services,
We are able to advise and assist clients in relation to all aspects of regulatory compliance including:
• Ensuring you meet your current obligations under the CCA and ACL as well as advising you as to how best to meet additional obligations under the UCT regime;
• Advising in relation to the legality of proposed advertising campaigns;
• Reviewing and advising in relation to business contracts including contracts with small business;
• Developing and implementing training, compliance and audit programs to ensure your business does not act in breach of its legal obligations under the CCA and the ACL in respect of consumer and competition law;
• Advising and acting in relation to commercial disputes arising out of claims of restrictive trade practices, misleading and deceptive or unconscionable conduct. This includes when these types of claims are made against you or, alternatively, when you are of the view that another party’s conduct has resulted in loss or damage to you as a result of these types of business practices;
• Advising in relation to franchising agreements including contract review and preparation to ensure compliance with all relevant laws; and
• Advising in relation to commercial disputes including restraints of trade issues arising out of employment contracts.
The penalties for breaching competition and consumer protection laws are significant. The ACCC has very broad investigatory powers and will not hesitate to use them if it believes that a breach of the law has occurred. It is therefore essential that all businesses not only understand their obligations but have the tools and expertise available to them to ensure that they are able to fulfil their legal obligations.
Our experienced commercial and business services lawyers are able to work with you and your team to guide and advise you through all areas of consumer and competition law and look forward to assisting you.
We regularly work with clients to ensure that their businesses have a solid legal foundation. We are also able to provide advice on how to protect your personal assets from business creditors and the tax implications of different business structures.
It is important to understand the types of business structures available before starting any new business. Four of the most common business structures used in Australia are discussed below.
You operate the business as an individual and are the sole personal legally responsible for all parts of the business. Being a sole trader can be a cost effective structure for a single person business.
Firstly, all income will be treated as personal income and taxed at appropriate personal income tax rates. Secondly even if you employ people to work for you, your personal liability will not be limited in any way. You will be solely responsible for all debts and liabilities of the business.
Two or more individuals set up and run a business together but not as a company. A partnership agreement governs how the partnership operates as between partners particularly in terms of profit sharing.
A company structure enables a business to be set up as a separate legal entity to any shareholders of the company. It is an appropriate structure for many businesses especially if growth is on the horizon.
A Trust is a business structure that holds property or income for the benefit of others. Trusts are relatively straightforward to set up and can be used to minimise individual risk and enable business income to be distributed to a number of individuals or entities.
Other options for business structures include joint ventures and franchise agreements. We are able to advise you in relation to these and other business models and can work with you to determine the most appropriate business structure for your needs.
Once a decision has been made regarding an appropriate business structure we are able to assist you in respect of all aspects of setting up your business. Areas where we can advise and assist include:
• what finance needs to be put in place including considering available options such as business loans, lines of credit and business overdrafts;
• a plan for distributing profits, decision making and resolving disputes (if a structure other than a sole trader is adopted); and
• long term development and succession and exit plans.
We are also experienced in advising clients in relation to the restructuring of businesses including the dissolution of partnership agreements and joint venture arrangements.
As a business model franchising has a number of appealing aspects for both franchisors and franchisees.
Firstly the franchise model provides a means for a franchisor to grow a business without needing to have at their
Secondly, it allows individual business owners (franchisees) to buy into a successful business model that has a proven formula. Even though franchisees are bound by the terms of the franchise agreement they still have a degree of independence while being able to access all of the benefits that can be achieved by being part of a larger business structure or organisation.
All Australian laws that apply to commercial transactions including trade practice laws apply to franchise agreements in Australia. In addition, a Franchising Code of Conduct operates to govern the relationship between franchisors and franchisees.
From 12 November 2016 the Unfair Contract Terms Regime (UCT Regime) applies to cover standard form contracts entered into with ‘small business’.
The UCT Regime applies to any standard form small business contract for the supply of goods and services, including financial services or products or an interest in land. A wide range of contracts are affected including franchise agreements. The UCT Regime adds to the already extensive compliance and regulatory obligations already affecting franchisors under the current Franchising Code of Conduct.
As the laws governing franchise agreements continue to evolve and grow it is important, whether you are a franchisor or franchisee, that you have access to specialist legal advice.
Our experienced franchise specialists are able to assist and advise in respect of all aspects of franchising arrangements including:
• Advising in relation to ancillary documents such as disclosure documents;
• Regulatory compliance including obligations under the Franchising Code of Conduct;
• Options and conditions of sale including on-selling your franchise ;
• Employment obligations and responsibilities both under the franchise agreement and generally;
• Intellectual property issues;
• Commercial and retail leases necessary to operate your franchise business;
• Negotiating with your franchisor/franchisee;
• Renewals and termination of franchise agreements; and
• Resolving franchise disputes including advising in respect of litigation and alternative dispute resolution.
Being involved in a franchise arrangement can be satisfying and rewarding both personally and financially. However, it is essential that you understand both your obligations and your rights in relation to any franchise agreement. We look forward to working with you to help you achieve success.