Frank J. Horvat & Co
Business Law
Australian business entities operate in a highly regulated environment. Owners and company directors must navigate numerous laws to ensure their business is compliant and can run with minimal disruption. Competition is tough and business owners will likely face various legal issues and challenges throughout their business journey. We can help with a range of commercial and business law matters, whether you are starting, expanding, or looking at selling your business venture.
Buying or Selling a Business
One of the most common commercial transactions is the sale and purchase of a business. These are often high-stake transactions, where the terms of the sale can have far-reaching financial consequences. It is always wise to have any contract for the sale or purchase of a business prepared and negotiated by an experienced lawyer and reviewed by a financial planner or accountant. Your professional team can help structure the transaction to provide an optimum outcome that helps protect your interests and minimises risk.
Some considerations when buying and selling a business include:
- the structure and apportionment of the purchase price, taking into account goodwill, stock, plant, equipment, and inventory
- Goods and Services Tax (GST) and other taxes such as 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
Which Legal Structure is Right for my Business?
Choosing the right legal structure generally requires consideration of matters such as your personal and financial circumstances, the type of business, and your plans for future growth.
For a small enterprise, it may be appropriate to operate as a sole trader using an Australian Business Number (ABN). In such structures, the business owner is solely responsible and liable for the business’ operations and debts.
A partnership may be formed when two or more people share a common interest and wish to contribute their respective skills and resources for the benefit of the enterprise. In a partnership, all partners have joint and several liability for the debts of the business and there is potential for disagreements and fallouts between the partners. A partnership agreement is essential to outline the duties and responsibilities of each partner. The agreement can also establish how the parties should make decisions and resolve disputes within the partnership.
A limited liability company is a popular choice for small to medium sized businesses. As a separate legal entity, the company provides a certain level of protection for the company’s officers and shareholders. Companies are registered through and governed by the Australian Securities and Investments Commission (ASIC).
A trust structure can provide asset protection and may be beneficial when it comes to determining tax liabilities. Trusts, however, are complex and must be properly set up and administered to ensure the benefits outweigh the costs and ongoing fees.
Terms of Trade
Terms of trade form the basis of a business’ trading relationships. The terms and conditions that you offer to your customers and accept from your suppliers are a basic aspect of your business model.
Poorly thought out or unfair terms of trade can impede the success of your business. For instance, if your suppliers require upfront payment but your clients only pay after 30 days, your business may suffer from cash flow disruptions. Some industries have very traditional terms of trade, but a lawyer can assist you in identifying small changes to your terms that can mitigate risk and reduce overhead.
Liquor Licence Assistance
We assist our clients with liquor licence transfers and the requirements associated with the transfer.
If you need assistance, contact one of our lawyers at [email protected] or call 03 9300 1077 for expert legal advice.