Business/Commercial Law
Rob Meers and Paul Muntz are our Accredited Specialists in Business Law.
Email Rob here.
Email Paul here.
Trusted advice on all things business and commercial law in Albury, Wodonga and beyond
Let the experts in our business, help you to be the expert in yours
If you’ve come to this page, then you might need business or commercial law advice to answer one or more of these questions:
- When is it time to change the ownership of my business from a sole trader to a partnership, company or trust?
- What is involved in bringing another partner on board for my professional business?
- How do I begin the process of selling my business?
- What due diligence is recommended when buying a business?
- What are the consequences of changing my family trust to benefit more people?
- What documents do I need to have in place as my business grows?
- What happens when a business dispute turns into legal action?
How can we help?
Business structures (including choosing the right entities)
Trust deeds and other business documents
Buying or selling a business
Commercial litigation (including business disputes)
Business Structures
We specialise in Business and Commercial Law in Albury, Wodonga and beyond.
All business owners are familiar with what has been deemed 'duck syndrome'. Above the surface, you're doing your best to seem like a professional and successful entrepreneur who has everything under control. Below the surface though, the flippers kick frantically as you try to stay on top of every element of business ownership and wear every hat imaginable. If your business is still run by you as a sole trader or by a team as a partnership, then you may be wondering if you should look into the pros and cons of a company or trust.
Answering this question is a huge undertaking without professional help.
We take great pride in asking you the right questions about your business, working alongside your accountant, considering all of the options and making a recommendation that suits your scenario. A company or trust is not for everyone, and you should feel confident that you are making a decision based on trusted advice that you understand.
Frequently Asked Questions - Business Structures
Moving your business into a company structure can mean that you save on tax and are less liable as an individual.
Questions of tax should be directed to an accountant, who will be able to look at your business financials and tell you if you are likely to be in a better tax position if you move to a company structure.
Limiting liability is a complex concept. When over-simplified, it aims to put a brick wall between your personal assets and the consequences of legal action against your company. Brick walls aren’t indestructible, but they offer some level of protection.
Sometimes the added fees, paperwork and professional costs of creating a company can outweigh the benefits, especially if your business is still small.
A trusted accountant/lawyer team can carry out this balancing exercise for you and make a suitable recommendation.
If you are operating a Partnership with a friend or colleague, it is vital that you have a Partnership Agreement in place. Think of this agreement as an instruction manual that tells you what to do in a variety of scenarios. This may include guidance around financial distributions, financial contributions from partners, adding additional partners and winding up the partnership. Without this agreement, those issues (and many more) can quickly lead to arguments, burnt bridges and legal action.
People that share a Partnership with their spouse, de facto partner or immediate family often don’t have Partnership Agreements. This is typically because they trust their legal partners and are confident that they will always be able to work things out amicably. Unfortunately, there are unforeseen things that can break down even the strongest of relationships. We recommend that you have a Partnership Agreement in place regardless of your relationship.
This is a tricky question to give a short answer to.
There are many factors that put distance between a company and a trust. Perhaps the biggest relates to flexibility of distributions. Simply put, profits of a company go to pre-determined shareholders, whereas profits of a trust go to a pool of beneficiaries based on the discretion of the trustee.
There are exceptions to this one example, and many other factors to take into account. It is easiest to understand when someone explains it in the context of your unique circumstances. Your trusted advisors will do just that.
Trust Deeds and Business Documents
Some larger business dealings require standalone legal documents. This is the case for circumstances where you are creating a new trust, varying an existing trust, documenting a large once-off transaction or perhaps agreeing to wind up an entity.
Other legal documents can be set up as templates to be used over and over again. Examples of this are agreements relating to contractors, non-disclosure, confidentiality, purchasing, resolutions of boards or directors, franchising, licensing and many more.
Either way, these documents are built on a foundation of best legal practices and expanded based on the needs of your business. We will combine our knowledge of the law with your knowledge of your business to draft whatever is needed for your next venture.
Frequently Asked Questions - Trust Deeds and Business Documents
The beneficiaries of a trust can only be changed in some circumstances.
Any amendment to a trust must only be made after a lawyer has considered all deeds and resolutions in the history of the trust. Accounting advice should also be sought to understand any taxation consequences.
If an amendment to a trust is too significant, it may trigger what is known as a re-settlement of the trust, which can have substantial legal and financial consequences.
The key is to have everything in writing. It would be great if a handshake with a colleague, associate or neighbour could be trusted. Unfortunately, that is not the case.
If you do come to a business agreement over the phone or in person, always follow that up with an email or letter which confirms what was discussed, and ask the other party to respond in writing, acknowledging what has been agreed to.
Many people reach out to us seeking advice after someone else has failed to keep up their end of a deal. It becomes very difficult for us to advise that there is any legal leg to stand on, if none of the discussions were in writing.
It is very common for businesses to use the same documents over and over.
This may be safe to do so if a legal professional has drafted those documents for this purpose.
However, those document templates are not going to automatically reflect changes to the law. Accordingly, we recommend that you ask a lawyer to do a regular ‘health check’ on your frequently used documents to ensure that they still provide your business with as much protection as possible.
Buying or selling a business
If you are buying or selling a business then your priority is moving into the future so that you can settle into your new normal. Standing between you and that future, you might see a mountain of paperwork, registrations, questions and confusion. Thankfully, we've guided many clients through this process, and we're ready to help you reach your business goals.
If you are struggling to keep track of what comes next, that's where we come in. We have spent years developing the best workflows and procedures for navigating these transactions smoothly and without missing any checkboxes.
You can rely on us to assist with due diligence, document preparation, document assessment (when those documents have been drafted by someone else and handed to you), registrations, settlement deadlines and more.
Frequently Asked Questions - Buying or selling a business
The purchase price of a business can be seen as a pie, with varying slices representing different things. The largest slice of a purchase price for a goods/retail based business is often inventory. For a service-based business, it is commonly goodwill. This non-tangible concept is tricky to put a figure on.
Beyond that, there are many considerations and methods that can lead you to valuing your business.
Legal and accounting advice is recommended to assist you.
Business.gov has a very useful page dedicated to valuing your business. Check it out here
Most legal transactions have a default presumption when it comes to deciding who should draft documents.
The default position for the sale of a business is that the vendor (seller) will arrange for a Contract of Sale and supporting documents to be drafted by a lawyer.
If a purchaser has offered to arrange documents, it may be because they are particularly keen on the deal and are hoping to entice you by offering to handle things. They may also hope to expedite things by taking control of the process. Playing devil’s advocate, they may also wish to ensure that those documents are drafted in their favour and not yours.
Ultimately, it is not an immediate red flag for the ‘other side’ to draft the relevant documents. But you should ensure that you have an independent lawyer consider them for you, and advise you of anything that is not in your best interests before you sign anything.
This process is known as due diligence. Any reasonable vendor (seller) and commercial agent (if there is one) will be relatively patient whilst you conduct due diligence. You can make your offer subject to due diligence and then speak with a lawyer about what should happen next.
You would typically spend the next short while looking at the financials of the business, finding out about the entitlements and employment structure of all staff, speaking with your bank about financing the purchase and much more.
A lawyer can provide you with a list of recommended due diligence.
Every commercial lease is different. They usually include a clause which states that the tenant can transfer or assign their rights and obligations under the lease to a new tenant, with the approval of the landlord.
Before doing so, a landlord may wish to do some of their own due diligence by asking you questions about your entity’s financial position and what your plans are for the longevity of the business. They will be aiming to gain peace of mind that you will be able to pay the rent reliably.
If you engage a lawyer from the start, they will guide you through most steps of the process. The advice of an accountant will also be a fantastic resource to rely on.
Commercial Litigation/Business Disputes
When you're on either end of a dispute, the first step is to collect all of the relevant documentation and contracts, to determine everyone's obligations. As long as you provide us with everything that you have, we can piece it all together and advise you on the next steps.
If it appears that someone is in breach of one or more of their obligations, you will need to decide whether to make a claim. If you have potentially breached an obligation, then you will need to prepare a defence or enter into settlement negotiations. Either way, we can help you weigh up your options from a legal, financial and emotional standpoint.
We recognise that life and business don't come to a halt when you're in the midst of litigation. Our team will work with efficiency and compassion so that you can navigate it all.
Frequently Asked Questions - Commercial Litigation/Business Disputes
The vast majority of litigious matters are settled outside of court, either via voluntary negotiation, mediation, or offers of compromise “on the courtroom steps”. A legal dispute does not necessarily have to escalate to an expensive courtroom battle. At Belbridge Fleming Law, our focus is on sound, commercially realistic advice which promotes out of court settlement where possible. The key to successful resolution is getting in early (before documents are filed in the court), to allow the parties time in which to discuss their positions and reach a compromise.
The Australian court system is constantly changing and evolving. The first step in starting any legal action is to ensure that the matter is being brought before the court or tribunal of appropriate jurisdiction. Tribunals such as VCAT and NCAT have been designed to take the burden off the court system, offering a faster and more cost-effective option, particularly for parties who wish to proceed without legal representation. The jurisdiction in which your matter will be heard is dependent on the amount of your claim, the type of dispute which is involved and the parties to the action.
If you have received legal papers in person or in the mail, it is important that you take advice immediately. Courts and Tribunals have varying timeframes which are strictly enforced, and these differ from State to State and between jurisdictions. If you fail to take action within the prescribed timeframe, you may lose your right to defend yourself, or judgment may be made against you without your knowledge. If in doubt, check it out! Come and see us early and maximise your chance of success.
Litigation is a lengthy and protracted process. The Australian Courts are inundated with applications and delays are common. Whilst an uncontested claim in the Victorian Magistrates Court or NSW Local Court may be resolved in as little as 2-3 months, litigants should be prepared for a wait of up to 2 years in most courts for final hearings and trials of defended actions.
This is comparable to the age-old question “how long is a piece of string?” – the cost involved in taking legal action varies greatly from case to case. Influencing factors in relation to the cost of litigation are the complexity of the matter, which jurisdiction it will be heard in, whether or not a barrister is engaged, how many parties are involved and whether or not those parties intend to contest or defend the action. There are court filing fees in addition to legal costs, however reductions and exemptions may apply in certain circumstances.
There is a common misconception that a successful litigant will not only be paid compensation for their loss, but will also be entitled to have all of their legal costs paid for by the other party. Case law decisions such as Calderbank v Calderbank [1976] Fam 93, [1975] 3 All ER 333 (EWCA) have set a precedent when it comes to costs orders, however it is highly unlikely that any costs order made by a court will ever equate to the amount of legal fees and outlays actually incurred by the parties. By way of example, the average costs award in a civil claim equates to approximately 30% of the money actually spent by a party to litigation. An indemnity costs order is likely to equate to approximately 60% of the amount incurred. Whilst costs orders are becoming more common in the courts, it is almost guaranteed that you will be out of pocket in relation to your litigation matter, even if you win.
Successful litigation will result in the court making judgment in your favour. If you win the case, the court will order that the other party to the proceedings do something (usually requiring the payment of money) to satisfy this judgment. In most cases, the party in question will do the right thing and satisfy the judgment in accordance with the Orders; the case is over, and everyone can move forward. If the judgment is not satisfied, further steps may be required to enforce the judgment.
