The 5 Most Important Legal Tips When Entering Into the Purchase or Formation of a Business

  1. Your business needs to be structured correctly from the outset by ensuring you, your accountant and your lawyer are all on the same page about what structure is appropriate for your business, to minimise personal risk and to set the business upon the best footing for future growth and success. Your structure must be documented clearly and correctly prior to the purchase or formation of the business.

  2. If you have business partners, then a written Shareholders Agreement, Buy-Sell Agreement or Partnership Agreement (depending on your structure) is essential. This ensures everyone is clear about their respective rights and obligations in the operation of the business and also potential exit arrangements for the future.

  3. Registering a trademark over your business’ name, logo and slogans will give you rights against competitors who try to use something identical or similar and will also add value to your brand. The more you do to protect your intellectual property at the earliest possible stage, the more protection you will get.

  4. Having a well-drafted set of Trading Terms and Conditions for use with your customers/clients that are tailored to your business will make it clear when you will be paid, the ways you can secure payment and the rights you have if you are not paid on time. In addition, such Terms and Conditions can be relied on if any disputes/misunderstandings with customers/clients arise. Furthermore, such Terms and Conditions are required to address obligations on businesses such as dealing with customers’/clients’ personal data, privacy policies, refund and cancellation policies, what jurisdiction will deal with any disputes, etc.

  5. Your business will generally have numerous Contracts (both written and verbal) in place with suppliers of goods and services. These should always be in writing and either be drafted by your lawyer or otherwise carefully reviewed by your lawyer before signing. Ongoing supply Contracts need to reflect the terms you have agreed to (and are expecting) in order to minimise disputes arising in the future. Normally such Contracts are heavily weighted towards the supplier. However, they can, and should be where possible, negotiated to be more beneficial towards your business.

Salerno Law specialises in Commercial and Business Law and is able to provide first-class, prompt and efficient advice to business owners throughout Australia.

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By Luke McKavanagh

DISCLAIMER: This article is only meant to give you general information and should not be relied on as legal advice. Speak to one of our lawyers for more information.

Salerno Law is managed by Emma Salerno, Managing Partner and CEO, who has a wealth of experience from operating her own businesses across Australia as well as a range of in-house and commercial experience both in Australia and overseas.