Business Law: Small Business
The best chance for new business success is to get the right start with legal professional guidance.
Business structures
When setting up a new business or buying an existing business it is very important that you decide on your business structure.
You have the choice of running the business as:-
- sole proprietor
- partnership
- company; or
- trust
We can advise you on the structure which best suits your needs considering your tax position, personal legal liability and availability of capital.
Buying an existing business
Serious negotiations usually proceed with the vendor's agent handing you a draft written contract. Do not sign the contract without first seeking our advice.
If you are pressed by the agent to sign and pay a deposit, make sure the contract you sign is subject to our approval with a full refund of the deposit if the purchase does not go ahead.
The contract ^ Top
We will study the terms of the contract to ensure they are in your best interests.
Amongst the various terms negotiated in a contract, we will identify what is to be included in the sale and, in particular, ensure the following issues are canvassed:-
- your rights to the business name
- the price of existing stock and the fixtures and fittings included in the sale
- the vendor's warranties and representations on the sales performance of the business
- goodwill
- your need for a restraint of trade on the vendor to prevent direct competition
- your need for tuition from the vendor on running the business
- your access to client lists and records
- transfer of licences and permits required for the running of the business at that location
- transfer of the lease
Goodwill
You may be asked to pay for the goodwill or, in other words, the intangible advantages built up by the business such as reputation and connections which differentiate the value of an existing business from a brand new business.
Franchising ^ Top
Buying a franchise involves buying into an existing business chain with special rules regarding the purchase of stock, shop fixtures and fittings, and marketing. For this infrastructure you pay an initial entry cost and ongoing franchising fees.
When handed a franchising agreement for your signature, as with buying an existing business, it is important to seek our advice first so negotiations proceed with your interests foremost.
In particular, we will look into:-
- the franchise documents
- the franchising fees
- duration of the franchise
- the operating procedures
Setting up a business
Leasing
Your business location and the rent paid have a huge impact on your business operation. It is vital for you to realize that the terms and conditions of the lease can be negotiated.
Be sure that the lease document reflects your needs. Importantly, you need to be aware of how rent is increased over time; the lease's duration; the ways in which the lease can be terminated; payment for repairs, fixtures, fittings; and your share of rates.
Finance
When you obtain finance, we can assist you to understand your obligations under a loan agreement or personal guarantee.
Insurance
Workers' compensation insurance, by law, is compulsory. It is also important to consider insurance against fire, burglary, public liability, personal disability, and loss of profits.
Operating a business ^ Top
Many facets of the law come into play while operating a business. From the start, seek our advice on legal issues arising from:-
- employer/employee relations
- debt recovery
- copyright and trade marks
- consumer protection and trade practices, and
- superannuation
Legal costs
Ask us about the legal costs and the processes involved in purchasing or setting up a business.
We can also advise you on state and local government charges including business name registration fees, lease registration fees, licensing and permit fees and stamp duty on the purchase of a business.
Links to all Groom & Lavers' services
Wills & Estate Planning | Business Law | Property Law | Family Law | Tax Agency