If you are in business, then you will understand the many challenges faced in a competitive and regulated market. Whether you are starting out, ready to grow, or looking at selling your business, we can help. We are experienced commercial lawyers and have assisted many clients navigate a range of legal business matters. We can help with:

• Buying and selling a business
• Arranging due diligence and inspections
• Choosing a business structure
• Business succession planning
• Partnership agreements and shareholder agreements
• Preparing and reviewing contracts
• Transfer of equipment licences
• Franchise agreements
• Commercial and retail leasing

Buying and selling a business

Negotiations for the sale or purchase of a business should be formalised in a written agreement, and each party independently advised. We often also recommend getting advice from an accountant before buying or selling a business. Your professional team can help structure the transaction to provide an optimum outcome and to protect your interests. You may need to consider:

• 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 incidental agreements that form part of the business operations such as commercial leases and service contracts, and how they will be transferred to a new owner
• provisions for the transfer of intellectual property such as business names, trademarks, and domain names
• employment relations – 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

Choosing a business structure

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 have a written agreement to govern the business relationship between the partners, 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.

A 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.

Franchises

Franchises can be a popular choice when looking at business opportunities. Generally, a franchise is a system comprising a licensed trademark or brand, established systems and, ideally, the necessary support to operate and build a business.

The purchaser (franchisee) buys a licence to run the franchise business through its own business entity but operates using the franchisor’s existing structure. The licence entitles the franchisee to access the franchisor’s standard procedures, administrative and marketing systems, and training.

Franchises in Australia are regulated by the Franchising Code of Conduct which sets out mandatory requirements for the sale, purchase and operation of franchises and provides important protection for franchisees. The Code requires franchisors to provide prescribed disclosure documentation to potential franchisees.

A franchise can provide an opportunity to work within an existing framework to build your business. Franchises however can be costly, and not all are successful. It is essential to go in with a full understanding of the business itself and your legal and other responsibilities.

If you are buying or selling a franchise, our experienced lawyers can assist with the necessary due diligence and provide advice so you can make informed decisions.

Commercial and retail leasing

A commercial lease sets out the rights and responsibilities of a lessee and lessor, regarding the lessee’s occupation of commercial premises to run its business.

If the premises is defined as ‘retail’, the lease will be governed by specific legislation aimed to enhance consumer protection for tenants by promoting transparency and fairness in the retail leasing industry. These laws set out specific requirements when negotiating lease agreements and prohibit certain terms deemed unreasonable from being included in a lease. Under the legislation, lessors also have specific disclosure obligations when negotiating a retail lease and preparing lease documents.

Commercial leasing disputes can occur due to poorly drafted agreements, ambiguous provisions, or when the parties do not properly understand their obligations and rights under the lease. Disputes can also arise when a lessee experiences cashflow problems.

We can assist with a range of leasing matters including:

• Preparing and advising on commercial leases
• Preparing and advising on retail leases
• Negotiating and formalising surrenders of lease
• Transfers of lease
• Lease negotiations
• Commercial leasing disputes

Our commercial lawyers act for a range of business entities. We offer tailored, pragmatic solutions, addressing the various challenges, opportunities, and legal issues that arise throughout the life of a business.
If you need assistance, contact one of our lawyers at [email protected] or call 02 4297 6066 for expert legal advice.