Business owners choose to sell for many different reasons. No matter what your reason, selling your business should never be rushed. Seek professional legal advice early on to ensure the process is done correctly. It will save you time and money.

Before you put your business on the commercial market, consider if there isn’t another option such as selling to a family member, employee, customer, supplier, competitor or industry colleague. You also may consider selling to a third party, whilst remaining on in a management role.

You will also need ensure all your financial records and operational documents are up to date, to hasten the sale process.

Request more information
Call 1800 216 777 to speak with our conveyancing experts about the sale of your business, or email your query to our conveyancing experts at info@lawstore.com.au.

Phase 1 – Getting Your “Full Story”
Purchasing a business is a big move, and each purchaser will have different motivators and end goals. We, as your legal advisors, will firstly need to understand you and your goals – both personal and business – to ensure we provide the best possible guidance, that will lead to your individual end goal.

Phase 2 – Investigating The Business
There are endless considerations that should be made and questions to be asked of the vendor to ensure we know as much as possible about this business.

Some of the key areas for consideration include:

• the vendor’s financial records
• all relevant operational documents
• whether the vendor runs similar businesses
• the state of existing stock
• the current and future climate of this industry
• the presence of a current marketing plan
• staffing needs
• any trademarks or patents.

Request more information
Call 1800 216 777 to speak with our conveyancing experts about purchasing a business, or email your query to our conveyancing experts at info@lawstore.com.au.

With more than 30 years’ experience, there is no commercial leasing case too complex for Conveyancing Queensland.

Our team of solicitors will aim to ensure you and your business premises negotiate favourable terms and conditions that will be of benefit for now and into the future.

Some quick tips you may find of help:

• If you lease your commercial or retail property, you should begin reviewing the lease terms up to 12 months prior to the end date.
• By law, a landlord is required to provide a written notice at least six months, but no longer than one year, prior to the end of the lease.
• The notice will either offer you, as the tenant, a new lease (including information on the terms and conditions) or advise you of the landlord’s intention NOT to offer a renewal or extension.

For reliable, expert advice regarding the lease renewal of your business premises

Call 1800 216 777 to speak with our conveyancing experts about lease renewals for your business, or email your query to our conveyancing experts at info@lawstore.com.au.

The fundamental goal of asset protection planning is to limit and lessen any financial and legal risks to your business and personal assets from potential creditor claims and lawsuits.

Without asset protection in place, you could undergo disastrous loss of both personal and business assets. The longer a plan is in place, the better you will be insulated from these risks.

Some possible liabilities to your business include:

• Debts and mortgage obligations to third parties and vendors
• Claims for damages caused by your employees
• Product or professional liability and consumer-protection issues.

Developing an asset-protection plan may deter a potential claimant or help prevent the seizure of your assets after a judgment.

Separate legal structures are often implemented as part of an asset protection plan. 
These strategies include:

• Corporations
• Partnerships
• Trusts

The most suitable structure for your situation will depend on the type of assets as well as the types of creditors most likely to pursue claims against you.

Selling one’s business or purchasing a pre-existing business involves careful consideration of both financial and legal concerns on the part of both parties.

Selling a Business

If you are undertaking a business sale, a potential purchaser is going to want to know why you wish to sell and will certainly analyse your company’s current and projected future situation as it relates to their own benefit.

Once you are ready to sit down and work out a sales agreement is when you should acquire legal counsel to protect your interests. It is highly important that you understand any contract that you are signing as you will be legally bound by its terms.

Purchasing a Business
A short list of considerations you might have during the sale/purchase process include:

• Vendor – what is the reason for sale of business
• Sales – patterns, trends, customer base, current suppliers
• Costs – fixed and variable costs, staff costs
• Profits – financial records, future cash flow and profitability
• Assets – identify and check all assets, including intellectual property and leasing arrangements
• Liabilities – outstanding debts, refunds and warranties
• Purchase agreement – review carefully
• Tax – GST, Capital Gains Tax, Stamp Duty implications
• Legal issues – leases, business structure, agreements

When starting up a business, it is of utmost important to keep all legal matters in good order.

To prevent future legal problems from hampering your business growth, Q Solicitors uses a Business Start Up – CHECKLIST to ensure all legalities are properly accounted for from the beginning. Your business’ financial and legal health is our greatest concern and we’ll help you get started on the right foot so that you are in an excellent place from which to prosper.

Some legal considerations for business start-ups include:

• Office – your physical space must be registered with the Division of Workplace Health and Safety. This applies even if you operate a non-dangerous business or work from home. If you are found to be unregistered in a random inspection, you may be subject to prosecution.
• Trading Name – once you intend to trade under a business name other than simple your own legal name, you must register with Consumer Affairs.
• Bank Accounts – your business should have a separate bank account as to avoid mingling personal and business assets and expenses and the account should be reconciled regularly. Many businesses fail early on due to poor record keeping, among other factors. Being able to easily reference what profit you are making will help you at tax time and in keeping up payments with creditors.
• Licences and Approvals – most businesses require a licence to begin trading or else will be subject to prosecution. Your local council may also have additional Town Planning requirements.
• Contracts – if you are acquiring an existing business or leasing premises, it is crucial to understand the liability and obligations involved as per the contracts.
• Incorporation – you will need to determine whether it’s most beneficial to trade as a company, sole trader, partnership, or a type of trust.
• Insurance – there are many varieties of insurance that may be of use to you: contents insurance (for the premises), professional negligence, sickness, accident, as well as life insurance.

Restructuring involves reorganizing the legal, ownership, and/or operational structures of a company to improve profitability and efficiency of operation.

It is important to always be aware of issues such as Capital Gains Tax, GST, long-service leave (and/or other employee emoluments) which may effect your Land Tax and Payroll Tax obligations.

Restructuring may occur in the case of:

• Matrimonials
• A change of ownership or ownership structure
• A de-merger
• A response to a major change such as bankruptcy
• Repositioning
• A buyout

Restructuring may include actions such as:

• Financing debt
• Selling portions of the company to investors
• Reorganising or reducing operations

Our team at Q Solicitors are skilled in assisting clients with the details and negotiations associated with a business restructure.

Franchising is a business model in which a firm (the ‘Franchisor’) allows business operators (Franchisees) to leverage off their good will and intellectual property. This can include such things as the use of the Franchisor’s Trademarks; Business Intelligence; Designs; Administrative Methods and maybe even production models of “secret recipes of herbs and spices”. It can be as simple as the savings in joint buying power and advertising campaigns and distribution lines to assistance in selection and fit out of premises.

Some franchise models include “Key Money” or Goodwill payments, some include training for prospective staff and nearly all of them include payments of Royalties or commissions for the ongoing use of the systems.

A franchise may be considered a temporary business investment akin to renting or leasing a model to make money.

Franchises are normally governed by any or all of three main factors:

• Time
• Geography
• Product

They are also governed by the use of Franchisors’ signage, logos, trademarks and sometimes even uniforms Essentially the Franchisee is required to follow a uniform business concept strategy as set forth by the Franchisors.

Franchising is defined and regulated under the “Franchising Code of Conduct”. This is a mandatory Code of Conduct created under the Trade Practices Act legislation.

It is fair to say that the phrase “Franchise” is commonly misused and business processes that are describe loosely as franchises are sometimes not and likewise processes that are thought not to be covered quite often are. The difference is phenomenal especially from an administration and disclosure point of view.

Purchasing a franchise (and likewise, choosing a Franchisee) needs to be a carefully considered process. A legally binding franchise agreement needs to be provided (with mandatory inclusions on various subject matters) laying out all rights and responsibilities for both parties including fees, start-up costs, training, and territories of other franchisees.

In general, franchise contracts favour the Franchisors who will often have non-negotiable clauses to require Franchisees to accept the inherent risk of the venture without any guarantee of success or profits.

The advantages are of course that someone else has done all the hard work of the Business planning set up and administrative structuring leaving you alone (hopefully) to make the money and enjoy the success.

The risks can be high and contract terms can be restrictive and as such we strongly encourage you to consult with our team at Q. We have been dealing with franchises for both franchisees and franchisors for decades.

General litigation encompass those aspects of law that may potentially be litigious in nature (those that may result in a lawsuit), including but not limited to wills and estate planning, incorporation of business, real-estate transactions, drafting of contracts, and disputes with administrative bodies. Litigation may occur when a dispute cannot otherwise be resolved and a controversy transfers to a court setting.

Disputes may occur between individuals, groups, organisations, associations, government agencies, and/or business entities and encompass matters such as economic restitution, compensation in the case of an injured party, deterrence from future actions, or retribution for a wrongdoing. Commercial disputes may be about issues such as contractual disputes, debt recovery, and claims made against non-paying insurers and deceased estates. When a dispute cannot be resolved privately between the two parties, a Plaintiff may file a Complaint to have the courts intervene in the matter.

Whether you need to file a Complaint or defend against one, when going into the litigation process, the three important questions in your mind should be:

• How much am I seeking to recover?
• What will it cost me?
• What are my realistic chances of success?

It is important in a general litigation to always keep your ultimate goal(s) in mind and not see it as a situation of winning or losing. Rather, the goal of litigation is to ensure one’s rights are honoured in accordance with the law.

Intellectual property (IP) legally refers to ‘creations of the mind’ for which exclusive rights may be recognised. Examples of IP include inventions, unique imagery, phrasing, and product attributes, unique product design, copyrighted forms of artistic expression (photos, paintings, drawings, poems, novels, musical compositions and arrangements, film, broadcasts, computer programs), trade secrets, as well as plant breeders’ rights to new varieties and circuit layouts.

Options to protect your intellectual property include patents, registration of trade marks, and confidentiality agreements in relation to trade secrets:

• Patent – is used for a device, substance, method, or process that is entirely new or a new way of using components in a whole and gives you the right to stop others from selling or using your invention. A patent provides a high level of legal protection, but requires you to supply details of your invention, which you may not wish to disclose. In those cases, a trade secret/confidentiality agreement which swears those with specific knowledge to secrecy may serve you better.
• Trademark – is a letter, number, word, phrase, sound, smell, shape, logo, picture, or aspect of packaging that distinguishes your products from those of other traders. While it’s not required to register a trade mark, doing so will allow you to take legal action against those who would use your trade mark without permission. Likewise, a registered design can be used to protect the way your manufactured product looks, giving you the exclusive right to a particular product design in your market.
• Design Registration – is intended to protect designs which have an industrial or commercial use. A registered design gives you the owner, exclusive rights to commercially use it, licence or sell it.
• Business/Trading name – is the name under which your business operates. Registration identifies the owners of the business. Registration is compulsory in every state and territory from which a business operates, and must be completed before the business starts trading.

A first step in protecting your intellectual assets is by identifying what legally constitutes intellectual property. IP Australia (a Commonwealth Government Department) provides a full lists of definitions to assist in sorting out what falls under IP and what legal avenues may be used to your advantage.

Another important task is to search existing databases to ensure your ideas are indeed original and you are not infringing on the rights of others. A solicitor who specialises in IP affairs can assist in establishing protections as well as instances of IP infringement against your interests.

Contact Q Solicitors for professional advice on how best to manage your Intellectual Property requirements.

While often used colloquially in everyday language as a synonym for ‘appropriate attention to detail’, the legal definition of due diligence refers to an investigation of a business or person prior to entering into any contractual obligations. Due diligence does indeed focus on discovering all pertinent details and is typically performed in cases of purchasing an existing business or a commercial real estate property. The onus is on the buyer to do the research prior to entering any arrangement, especially in regards to any liabilities that may be uncovered as well as the physical, legal, and financial condition of the company or property being considered for purchase. Any information that is provided to you from the other party should always be verified to protect your own interests.

The main areas researched in a due diligence investigation are:

• Incorporation – You’ll want to verify that a company is properly incorporated with ASIC and examine its share structure, board members, and financial reports.
• Contracts – This includes sales contracts, distribution contracts, and any sub-contracts; whether they are valid and what they entail, their duration, and if they can be terminated.
• Employees – You’ll want to investigate the management team of a target company including how long they have held their positions and how their performance has been. Other items to review are employment contracts of staff and compliance with occupational health and safety standards.
• Finances – A company’s financial situation will be uncovered by accountants. From a legal perspective, you’re looking for red flags such as trading while insolvent or in any other way breaching its obligations under the Corporations Act 2001. It’s also recommended to thoroughly review the company’s debts and liablities and when they become payable.
• Real Property – Here you’re looking to see that the company owns all its property or has correctly leased it. This includes a title search as well as any mortgaes, equitable claims, or charges that may exist against the property.
• Intellectual Property – You’ll want to check that a company has in fact registered its intellectual property, both for its value in the contract negotiations as well as for any potential infringement issues should it not be registered.
• Litigation – Much can be learned about a company from what litigation its been involved in, especially if there has been past prosecutions and fines from government agencies.
• Operations – Operations refers to the structure of a company, its internal logistics, major suppliers, and any outsourcing. It’s also a good idea to compare the company to competitors within the industry.
• Taxation – Check both that a company has paid tax, but also that it has been paying the correct amount of tax.
• Insurance – You’ll want to check that a company is insured and also not underinsured, as well as if there have been any recent claims and if consistent claiming may result in a future increase in premiums.
• Environmental Issues / Building and Site Review – This is an investigation into a company’s compliance with environmental law and local zoning and planning regulations, as well as an evaluation of existing building structures within a site as to their condition and upcoming maintainence needs.

In legal terms, restraint of trade refers to terminology within a contract which seeks to restrict the freedom of a party to engage in business. This often comes into play in the form of employment agreements which may contain restraints, such as a prohibition from engaging in other paid work during the term of employment or directly competing with the employer once the employment has ended. Other examples of restraint of trade clauses might be in a sale of business agreement which may often restrains a vendor from competing with the business being sold. Partnerships, joint ventures, and franchises also may use restraints on future and concurrent competition.

The underlying purpose in using these restraints is to protect one’s business from competition from those who might be well placed and have gained special skills, contacts, and knowledge to complete effectively, such as partners and ex-employees.

Legally to be enforceable, restraints of trade must be proven to be ‘reasonable’ by the party that wishes to impose the restraints on others. To be held up as reasonable, a restraints must itself be limited as to time, location, and extent, and must not go beyond protecting your legitimate business interests. Any restraint that is too detrimental to another party (i.e. does not allow them to make a fair living) will surely be struck down. Because this is such a complex legal slope to determine what is ‘reasonable’, your best recourse is consult with a solicitor in these matters.

Likewise, if you are entering into an agreement with a restraint of trade, you’ll want to be sure you understand what will be expected of you under the restraints and the consequences should you breach the contract.