Commercial & Business Law

Now more than ever, businesses face a multitude of challenges and legal issues in an ever-changing environment. Getting sound professional advice can help ensure sustainability and growth, minimise disputes and mitigate risk for the business and its owners.

We act for a range of businesses operating across various industries. We will discuss your individual circumstances to tailor solutions for the many planned and unplanned events that occur throughout the life of your business.

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 and deal with a range of matters such as:

• the purchase price, apportionment of goodwill, stock, plant and equipment
• GST and other taxation matters
• transfer of leases, licences, service agreements, etc.
• ownership and transfer of intellectual property such as business names, domain names, trademarks
• employee transfers, redundancies, leave and other entitlements
• training periods, confidentiality and restraint of trade provisions
• representations and warranties

The contract and any incidental agreements forming part of the transaction (for example, commercial leases or hire agreements) should be carefully reviewed to ensure they are suitable for the transaction with a range of due diligence matters carried out on behalf of the purchaser.

Farming properties and agreements

We can also assist with the sale and purchase of farming properties as well as all business aspects of the transaction. The contract for sale will need to include an inventory of livestock, crops, plant, and equipment, as relevant, together with any specific requirements for the transfer of such assets.

Buyers will need to check land and stock for affectations by chemical residue, contamination, noxious weeds, infestations, livestock disease or feral animals and investigate the existence of water-use licences and rural easements and rights of way, etc. Buyers should also confirm that the existing agricultural business is permitted as well as any plans for future operations.

Business structures

Business structures are an important consideration for any venture. The structure through which your business operates is generally chosen with regard to the size and nature of the business, your personal and financial circumstances, your goals and future plans.

For a small enterprise it may be appropriate to operate as a sole trader using an Australian Business Number (ABN), or through a partnership.

If forming a partnership with one or more others, it is important to put in place an agreement to govern the arrangements and to set out the rights and responsibilities of each party. The partnership agreement should also include 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. 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.

Companies and directors’ liability

A company is an incorporated legal entity with the capacity to enter binding transactions in its own name. Companies are a popular choice for operating small to medium-sized businesses – apart from some exceptions, officers and directors are generally not personally liable for the company’s debts.

When formed, one or more directors are appointed as authorised officers to conduct the company’s affairs. Directors hold a position of power and trust imposing on them several duties to act in the company’s best interests. Some of these duties are to:

• act honestly and use their powers to make decisions based on what is right for the company as a whole;
• avoid conflicts of interest and not use their position for personal profit to the detriment of the company;
• exercise care, skill and diligence in performing their duties;
• prevent insolvent trading.

Company directors face many situations and challenges that may place them at risk of breaching their duties. In the case of uncertainty, directors should seek urgent advice to clarify their position.

Certain defences may be available to a director who has breached a duty to avoid insolvent trading and it is essential for directors of companies that are facing financial difficulties to seek professional advice early.

Commercial contracts

Most business transactions can be documented to create enforceable obligations that balance and protect the interests of the parties. A commercial contract should capture the agreed negotiations, set out the parties’ rights and responsibilities and include essential terms such as the scope of services or products to be provided, warranties and indemnities, and dispute resolution processes.

The subject matter of a contract can vary considerably, from a single transaction for the sale of a product, to the ongoing provision of services over many months. The breadth of a contract will depend on the subject matter, its duration and the complexity of the transaction.

Debt collection

For a lot of businesses, debt collection is an unpleasant but necessary part of operations. If somebody owes your business money, you might want advice on what your options are to get the debt paid. We can help you find a cost effective and appropriate strategy to get the money back. This might include sending a letter of demand or a statutory demand, negotiating a payment plan, or seeking judgment for the debt in the appropriate court.

Our experienced lawyers can assist with a range of business transactions and related commercial matters including:

• Business sales and purchases
• Business structures
• Partnership and shareholder agreements
• Business and commercial contracts
• Farming properties and agreements
• Commercial leases
• Goodwill and valuation of business assets
• Tax considerations
• Transfers of liquor licences and poker machine entitlements
• Transfers of equipment licences
• Franchising agreements
• Arranging due diligence searches and inspections

If you need assistance, call 03 5166 1858 (Traralgon) or 03 5127 2666 (Moe) or email [email protected] for expert legal advice.

We provide assistance Australia wide via video conference or other electronic communication.