Plain legal checklist:
Have you structured your business to protect your personal assets?
Have you documented how capital, management, control and profits are divided between you and your business partner?
Do you have a plan for the business if your business partner is incapacitated?
Do you understand the terms of any loan, guarantee or agreement you have signed?
Starting a business can be challenging time with questions about registering a company or business name, working with your accountant, finding customers, earning income and doing the work you promise.
Starting with a business partner
If you start a partnership trading as two or more individuals using your own names or a business name, how profits are divided and what happens when your business comes to an end is governed under state legislation. That might work for you. But, you should also consider if you want your business handled a particular way the you should have a partnership agreement.
Starting a company with others
If you start a company with others you should consider the difference between ownership of the company by shareholders and the management of company by the directors and others. You might want to have some owners who have more control over finances or how the company is run or want to ensure power is spread evenly. You should also consider whether you want the others you start the business with to be able to get out and bring in someone unknown to you. A shareholder agreement can document how power and control is used, who can appoint directors and to whom shares can be sold.
Starting with the end in mind
Everyone wishes their business will be long and prosperous. However, illness, injury death or dissatisfaction can cause chaos and financial trouble. A buy-sell agreement can be used to document what events will trigger your business partner or co-owner to sell their part of the business and to whom. A buy-sell funding agreement can set out the financial terms on which the end of a business is managed. We will work with your financial planner, insurance broker, accountant and other professionals so that any agreement works with your insurance or other financial arrangements. We can also work on transferring your business through business succession planning or sale.
Managing expectations, terms and other fine print
A handshake will work for some deals. Carefully drafted terms of trade will give your clients a clear indication of how you will work with them including when you are obliged to do work, payment, discounts, when payment is due, cost of recovering payments, delivery, clean-up, returns, rework, what happens when things go wrong and who pays for the broken glass vase.
Guarantees and loans
Before you lend or borrow money you should ensure that you have well documented and understood loan terms. You should make enquiries about whether the borrower and their financial position before entering into any guarantee or loan. We can advise on and provide solicitor’s guarantee certificates.
We can help you with your Western Australia liquor licence application.