Contracts

It will depend on the contract and the nature of the breach. Some contractual breaches are considered to be material breaches that will give a right to termination and damages. Some breaches will require you to issue the other party with a notice giving them a right to rectify the breach. If the breach is not rectified, then the contract can usually be terminated, and damages sought. Each contract is different, and we always suggest seeking legal advice before taking precipitous action.

A contract requires fundamental factors to be a valid contract:

• An offer;
• Acceptance;
• Consideration;
• Intention to enter into a legally binding arrangement.

An agreement to buy and sell a business can be formed in a multitude of different ways. You should have thoroughly reviewed the financial history of the business and ensure appropriate warranties and guarantee are in place. You should also ensure the seller is restrained from competing with you in the future, that all plant and equipment is unencumbered and is in full working order and that customers will come across to you. Don’t sign anything before speaking to a lawyer.

If you are thinking of starting a business, you will need to consider the different business structures available to you and work out which structure will best suit your needs. In Australia, businesses are commonly structured as sole traders, companies, partnerships, discretionary trusts and unit trusts. It is important to seek professional advice (from a lawyer or accountant) before deciding which business structure to use.

If a company becomes insolvent, it will need to go into administration. Voluntary administration occurs when the directors of a company decide to appoint an administrator to take control of the company. A qualified insolvency practitioner will be appointed to ‘take over’ the company in an effort to investigate it and potentially save it.

We often find that when businesses and individuals are signing contracts that it is a busy time in the business or individuals’ lives. There is often a lot going on and a lot of excitement about the endeavour about to be entered into. It is often, therefore, a temptation for businesses to rush into a transaction before proper reflection and consideration occurs.

A shareholders’ agreement is a contract signed by the shareholders of a company, which regulates their obligations and rights, as well as what should happen if certain situations arise.  By entering into a shareholders agreement, you agree on how you will operate the business and how you will depart the business. Can any director solely buy new equipment? What happens if one director wants to sell and not another? What happens if one shareholder becomes sick or injured and can no longer work in the business? Your shareholders agreement can answer all these questions.

One of the most satisfying tasks we perform at Lynn and Brown Lawyers is to work with our clients to either establish, purchase or sell a business. We all know how stressful it is buying or selling a property and hoping to achieve a successful outcome. These stresses are no different to those that exist around buying or selling a business, particularly if that business is one you have built from scratch or the business that you are looking to buy is as a result of a significant lifestyle change or ambition for the next stage of your career.