Last Updated on Mar 13, 2020 by James W
Whether your new business venture is large or small you should consider whether to engage the services of a specialist business lawyer in Melbourne. Even for a small venture there is so much to consider that you may not have thought about, or may not have the time to research. Any good business lawyer in Melbourne will be able to give a wide range of advice but there are some basic dos and don’ts to think about both before and after starting your business.
Before You Start.
Do have your lawyer and other associated service providers complete a full due diligence check on the business you plan to buy. Thoroughly research the business so that you are aware of all the potential stresses and risks involved as well as the financial risks.
Check that all large suppliers are tied to the business and that the seller is not in breach of trading terms. Arrange for all key business personnel who you plan to retain to be contractually tied to the business.
Be sure that you have the full support of your family and that they are fully aware of the risks and stresses as well as the benefits and make sure that you structure the purchase so as to minimise the risk to your personal assets.
Do not accept possession of a leasehold business before a legally enforceable lease is entered into or the transfer of the current lease is completed.
Don’t take the vendor’s word regarding cash takings that are claimed to be over and above those recorded in the business’ financial statements or books.
Do not accept stock that is not of saleable quality or rely on and pay for the goodwill of the vendor.
Don’t rely on verbal agreements and promises. The general rule is – if it is not in writing, it is not done. This is where a good business lawyer can be of the greatest help to you.
Once you have purchased a new business you will find that there are still many areas that you can take advice on. The list of do’s and don’ts are still worth considering on the understanding that, as mentioned above, if it isn’t in writing then it’s not done. For example, are you planning to be a sole trader or are you going into partnership? Will your business have shareholders? Any formal agreements between partners and shareholders need to be undertaken in written form and on a legal basis; similarly any trademarks, designs, patents and property rights have to be registered legally.
Would you know what to do in the event of a catastrophic event such as a death, disability, retirement or some other unforeseen occurrence? And would you know how to make sure your business risks did not impact your family’s finances and how to avoid a worst-case scenario? For example, verbal agreements made between business partners and suppliers can often become worthless in the event of a dispute and in the case of the death of a participant will often go to the grave with them. So it is important that you do not rely on informal, verbal agreements and instead take legal advice on drawing up formal contracts and agreements. In a similar vein, a lawyer should first peruse any third party legal documents that are presented to you. Any third party guarantee should also always be checked over by a lawyer before being acted upon.
There is so much to take into consideration when starting up a new business but finding the right lawyer will certainly help make things easier.