Setting up a business
If you are thinking of starting up or buying a business, here are some useful things to consider.
The steps undertaken when establishing your business, have a significant impact on the future success of your business. For example, commencing a business with a poorly drafted business purchase contract, lease, or partnership/shareholders agreement can severely limit the financial performance of your business going forward.
All business transactions have aspects that are unique. Irrespective of your level of business experience, comprehensive advice from your advisors is critical to ensure your business has the best prospects to succeed. The practical, commercial skills of your advisors is typically invaluable.
There are a significant number of issues to consider. Depending on the transaction type issues may include:
• Contract terms and conditions
• Structure of purchase and legal entity used
• Arrangements between purchasers (e.g. partnership agreement, shareholders agreement, corporate constitution)
• Warranties
• Guarantees and indemnities
• Requirement for DA approval or the approval of other authorities
• Required licences to operate (e.g. Liquor Licence)
• Lease terms
• Key supplier contracts
• Deeds of restraint
• Inventory and stock take
• Fixed assets and equipment
• Electronic assets including websites and social media
• Intellectual property
• Staff arrangements
• Training
• Insurances
• Utility accounts
Planning the transaction, ensuring all necessary due diligence is undertaken and executing the transaction in the most efficient and cost-effective manner is critical. Undoubtedly these type of transactions require a high level of judgment and can be stress. You need to ensure you have a high level of comfort and trust in your advisors, and you can draw on their commercial experience.
Ultimately the investment made in seeking proper advice prior to executing your transaction is minimal compared the both the financial risks you are taking and the financial opportunities you may be forgoing due to a sub-optimal transaction.
Contact Michael Mandicos on 4243 7855 or email michaelm@culletonlawyers.com.au to discuss further.