Business Owners

Persons who own and operate their own business are a special breed. They are often self-contained, decisive people, who carry on business in an increasingly complex business environment but with limited resources. This can present many challenges for a business owner who needs to be able to access skilled advisors in a number of areas. As risks associated with the conduct of a business can be significant, business owners are faced with the reality that their net worth is tied to the success of their business.

We provide legal services to business owners to ensure that they are able to develop and strengthen the business based on sound legal advice. We are also able to refer business owners to advisors in other areas as required (accounting, finance, financial planning, insurance broking).

Practice area overview

Business owners use our services for both the business and also associated personal legal matters which are related directly or indirectly to the business including:

Establishing a business with co-owners: Where a business has more than one owner it is usual for those persons to enter into a contract to cover their rights and obligations in relation to the different circumstances that may apply over the life of the business relationship.

The type of contract depends on choices made as to the type of business entity and business structure used to carry on, and to hold ownership interests, in the business. The rights and obligations may be set out in a document that is registered on a public register or in a private document. It could be an equity holders’ agreement, a joint venture agreement, a company constitution, a trust deed or a partnership agreement.

Changing financial entitlements of your business: Changing the entitlements of business owners to income or capital over the life of an existing business can have adverse tax and stamp duty consequences. We can advise you as to how your choice of business entity and structure can allow this to occur whilst minimising adverse tax and stamp duty implications.

Changing ownership or control of your business: Changing the ownership or control (they are not necessarily the same nor directly linked) of an existing business can have unexpected consequences, including tax and stamp duty consequences.

Cessation of involvement of a business owner: A business owner can cease to be involved in the running of a business for a variety of reason including death, disablement (physical or mental), bankruptcy, voluntary retirement or other voluntary or involuntary termination of the employment by the business owner. These events can adversely affect the business either through loss of skills or the outgoing business owner commencing a business in competition with the business owner. The continuing business owner needs to be able to effectively sever the outgoing business owner from the business and introduce any new business owner to the business. This usually involves an assessment, and allocation, of risk in a contract between the outgoing, continuing and new business owners and include certain issues from financial liabilities (including any funding supported by personal guarantees and third party security) to protection of the goodwill of the business from attack by the outgoing business owner.

Retirement of a business owner: A business owner can retire from the business voluntarily or be removed involuntarily. This may concern you or another business owner. The transition can be difficult if it is not anticipated and the terms of the retirement are not agreed. This can involve a range of issues including: (1) determination of the amount to be paid to the retiring partner (2) preservation of the goodwill of the business after the retirement so that continuing business owners see value in making a payment to the retiring partner; (3) taxation consequences for the outgoing, continuing and new business owners, including capital gains tax and superannuation implications.

 

What we do:

Our services include

• Advising you on the key factors of the contract.
• Helping you properly analyse your legal position to enable you to make better decisions.
• Ensuring all procedural requirements are met.
• Identifying and advising you on consequential issues.
• Ensuring that all regulatory and public notification requirements (e.g. ASIC) are done.
• Writing the contract to meet your requirements and to prevent disputes and avoid potential taxation problems.