Whether you are looking to purchase an existing business, start up your own business or just review how your business operates, our team can assist in reducing the complexity and freeing up your time to focus on business management and growth.
If you are looking to purchase or start up a business, there are several things that you need to consider with the ultimate goal being the ongoing viability of the business. We can help you understand the rules and regulations that your business will need to comply with and assist you in meeting your obligations as an employer and under the Health and Safety at Work Act 2015.
Talk with us to make things easier when purchasing, starting up or reviewing your business. We can discuss your options and next steps – including discussing ways to protect your assets or making plans for business continuity.
Contact us with any questions or complete our quick business WOF check below.
I want to own and operate a business – how do I set it up?
You may wish to structure your business in several different ways. Your lawyer can assist in providing a more detailed overview of the different types of business structures, and advising you on what might be best for your business.
The most common forms of business ownership are:
- sole trader – a sole trader operates under their own name; they personally own all assets, are personally responsible for all business debts, taxes and other obligations and are entitled to all of the profits.
- company – a company is a separate legal entity, of which you would be directors; it owns assets, incurs debts and enters agreements in its own right, with profits distributed amongst the shareholders.
- partnership -a partnership is a relationship between two or more people who carry on a business; the partners jointly are liable for the partnership debts and other obligations, with a partnership agreement usually setting out how profits are shared.
All of these structures have their own advantages and disadvantages. Your lawyer will be able to talk you through the legal requirements for establishing any of these business structures and let you know what might be most appropriate given your personal circumstances.
If you are looking to start up a new business, your lawyer will be able to assist you in making you aware of other important things to think about, including:
- what will your business offer – is there a gap in the market you are looking to fill or are you wanting to offer something better than what is currently in the market;
- what will make your business stand out – think whether your idea will be profitable, sustainable long-term, and whether there are potential customers willing to purchase your good or service;
- where your business will operate from – you may consider working from home, utilising shared work spaces or leasing a premises.
What are terms of trade?
The terms of trade of a business govern the relationship between the business and its customers. It is important to have terms of trade as they make it easier to do business by setting out the key expectations and responsibilities. Your lawyer can assist you in drafting your terms of trade to help prevent misunderstandings by making these expectations and responsibilities clear.
Important things to consider when asking your lawyer to draft your terms of trade include:
- who they bind – usually your business and the customer;
- what you are providing – the business goods and services;
- how much you charge – whether you have fixed prices or quoted estimates;
- when ownership of the goods changes – usually, you do not want the customer to take ownership until they have paid;
- who is responsible for any loss or damage;
- when you are paid – setting out the timeframe you expect to get paid in, and any penalties or interest you want to charge when payment is made late;
- whether you will provide goods on credit – if so, whether you will expect personal guarantees when dealing with a company, application processes for goods on credit, and what your obligations are when offering goods on credit.
A clear and complete terms of trade can be invaluable in minimising the number of issues which arise, therefore protecting your business reputation. Your lawyer can assist you in drafting a terms of trade that is relevant to the specific needs of your business.
What should I consider if buying a business?
If you are considering purchasing an existing business, your lawyer can advise you on any conditions of the purchase and what you may want to include. Buying a business is a big financial decision, so it is important that you are fully informed before you commit to anything.
When you sign an agreement to purchase a business, you can make that agreement conditional on you obtaining or being satisfied with certain things about the business. These conditions typically include:
- finance – where you need to borrow funds to complete the purchase;
- due diligence – where you get information about the business, such as financial statements, important contracts, assets, debtors, customers and outstanding claims, and review this to decide whether you want to go through with the purchase;
- premises – if there is a lease, agreement from the landlord that you can take over the lease;
- employees – if there are certain essential employees, that they are willing to stay in the employ of the business despite the change in ownership;
- restraint of trade – where you restrain the vendor from competing against the business after sale (for example, preventing them from opening an identical business down the road and taking your employees and customers).
Your lawyer can advise you, in light of your circumstances and that of the business you are looking to purchase, what conditions you may wish to include. They can also advise you on other considerations relevant to the purchase of the business including goodwill, stock in trade, turnover warranties, contracts and suppliers to ensure that you fully understand the agreement, before you commit to it.
What kind of compliance do I need to worry about?
Your necessary compliance will depend on your business, as the ownership structure and size will impose different obligations.
Your lawyer will be able to advise you on the compliance required for your specific business, including employment, health and safety and company obligations where applicable.
How can I reduce my personal risk?
Regardless of your business structure, risk can arise in relation to personal guarantees, relationships with business creditors, insurance coverage and compliance. Our team can advise you on steps you may wish to take to manage your personal risk in light of starting up or purchasing a business and advise you on the terms of any personal guarantee.
Asset planning is one way your lawyer, in consultation with your accountant if you have one, can assist in minimising your risk. This could include the use of a trust to keep business and personal assets separate, as well as having wills and Enduring Powers of Attorney that set out what is to happen to your business on your death or should you become incapacitated.
We have experienced lawyers in these areas, so get in contact with us before you commit to going into business to ensure that your business operates to your advantage.
What are my obligations as an employer?
As your business grows, or when you purchase an existing business, our team can assist you in making sure you know your obligations as an employer. These include both employment and health and safety obligations.
For more information about your obligations as an employer, please refer to the Employment Law section.