The experienced business owner knows that there are numerous pitfalls and dangers to be avoided when purchasing or selling a business. When selling it is important that the vendor’s title, goodwill, plant, rights to fixtures and fittings, as well as an owner’s intellectual property is documented and verified. A purchaser needs to be able to protect that goodwill and ensure that matters such as tax liabilities and employee entitlements are properly identified, calculated and adjusted.

 

It can be dangerous to presume that every business is being conducted lawfully, in conformity with the lease and in compliance with the requirements of the local council. All too often we find that the local council has an issue with some aspects of the running of the business.

 

Purchasers need to ensure from the outset that they have consent of the landlord and that they are not taking on onerous conditions of a lease that might jeopardize the profitability of the business.

 

Potential business owners considering entering into a partnership are wise to seek expert legal advice. The terms of a business agreement need to be carefully drafted, dated and signed. Along with the standard processes for operating your business and sharing its profits, the terms of a partnership agreement need to cover potential areas for dispute and include provisions for breaking a deadlock. Unresolved partnership disputes have the potential to destroy the business to the disadvantage of all parties.

 

Beyond this, a partnership needs to consider appropriate succession planning so that you don’t end up in business with your partner’s Executor or family. At Colquhoun’s we take care to avoid these risks, maximise your opportunities and ensure that your business partnership runs smoothly.

 

Shareholder agreements also need the careful oversight of an experienced business lawyer. While shareholders may have the protection of a limited liability company, they also need the equivalent of a partnership agreement.   Shareholders should document an agreement for conducting the business. Among others, it should cover the provision of new capital, restrictions on the transfer of shares, the ability to buy each other out in the event of a dispute and the mechanism to resolve difficulties.

 

The absence of an appropriate agreement can lead to dissatisfaction and the oppression of minority shareholders. This can involve the company and shareholders in expensive litigation.

 

A joint venture business is often a complex matter. Poor legal framing of a joint venture carries significant financial and even personal risk. A well-structured joint venture agreement can avoid these risks. Agreements joining various parties together in a business venture set out the objectives of the venture, the contributions to be made by the various parties and how business profit and loss is to be shared.

 

Serious harm can occur to a business if its confidential information is known and used by its competitors.  Businesses and individuals can lose the right to restrict the use of their confidential information if they treat it inappropriately. These matters are growing more and more complicated as the information revolution gathers pace. In an increasingly competitive business environment the need to legally protect important business information is paramount. Colquhoun’s can assist your business to stay ahead of this important field.

 

There are many steps that can be taken by a business to minimise the impact of unpaid invoices. Bad debts can best be avoided early on by devising clear engagement instructions. If problems still occur strategies to recover a debt can include the retention of title clauses and early collection activity through the court. Good legal advice can bring timely solutions to what many consider a difficult area of business operations.