Commercial law in Hobart concerns a range of transactions and legal issues affecting a business enterprise. A business should be supported by appropriate professional advice to ensure sustainability and growth, to minimise commercial disputes and to protect owners and directors from personal liability.
Buying or selling a business
Buying or selling a business requires careful planning to ensure that agreed terms and conditions are properly negotiated and documented in a written contract. The contract should detail the parties’ rights and obligations, deal with GST and other taxation matters and set out processes to manage various contingencies.
It is common for the sale and purchase of a business to encompass other legal agreements such as ongoing commercial leases or service contracts. All should be reviewed by a legal professional with due diligence carried out prior to finalising the arrangements.
Business structures
When commencing a new venture, or buying a business, it is important to operate through the most effective legal structure. Determining the most appropriate business structure requires consideration of the parties’ personal and financial circumstances, the size and nature of the business, the regulatory environment within which the business operates, and the owners’ desire and strategies for future growth.
Common business structures include sole proprietorships, partnerships, trusts and incorporated companies. Each have their own pros and cons and vary in their complexity, reporting requirements, treatment of income tax and level of asset and personal protection for the owners.
Companies and directors’ liability
A company is an incorporated legal entity with the capacity to enter legally binding transactions in its own right. Companies are a popular choice for operating small to medium-sized businesses. Apart from some exceptions, officers and directors are generally not personally liable for the company’s debts.
When formed, one or more directors are appointed as authorised officers to conduct the company’s affairs. Directors hold a position of power and trust imposing on them several duties to act in the company’s best interests. Essentially, directors must:
- act honestly and use their powers to make decisions based on what is right for the company as a whole;
- avoid conflicts of interest and not use their position for personal profit to the detriment of the company;
- exercise care, skill and diligence in performing their duties;
- prevent insolvent trading.
Company directors face many situations and challenges that can place them in danger of breaching their fiduciary and statutory duties. In the case of uncertainty, directors should seek urgent advice to clarify their position.
Certain defences may be available to a director who has breached a duty to avoid insolvent trading and it is critical that directors of companies facing financial difficulties seek professional assistance immediately.
Commercial contracts
Businesses enter into numerous commercial transactions during their lifetime. These arrangements should be governed by a written contract which captures the parties’ negotiations, sets out their rights and responsibilities and includes essential terms such as the scope of services or products to be provided, warranties and indemnities, and dispute resolution processes.
The subject matter of a contract varies considerably, from a single transaction for the sale of a product, to the ongoing provision of services over many months. The breadth of a contract will depend on the subject matter, its duration and the complexity of the transaction.
Commercial and retail leases
Commercial and retail leases set out the legal terms and conditions through which a business may occupy premises to run an enterprise. Whether you are a lessor or lessee, a lease agreement should be formally prepared and reviewed by experienced commercial lawyers in Hobart to ensure a balance of rights between the parties. Lease disputes may be minimised when the parties are ‘on the same page’ with respect to their legal obligations, which should be set out in a compliant written lease agreement.
Debt recovery
If you are in the unfortunate position of having to take legal action to pursue an unpaid business debt, it is important to avoid throwing good money after bad, by using a process that is legally correct, efficient, and cost effective. Our commercial law firm in Hobart can assist with issuing letters of demand, negotiating with debtors to resolve disputes over unpaid money, instigating court proceedings if necessary, and preparing and serving statutory demands on debtor companies.
Our law firm act for a range of business entities and will discuss your individual circumstances to tailor solutions for the many planned and unplanned events that occur throughout the life of your business.
Commercial disputes
Commercial disputes can often be resolved without resorting to expensive litigation and court proceedings. If not managed effectively from the outset however, disputes can become complex and protracted. Our solictors will review your situation to explain the most appropriate and cost-effective way to resolve a commercial dispute.
Contact our Commercial Law Firm in Hobart, Tasmania
If you need any assistance, contact [email protected] or call 03 6223 3344 for a no-obligation discussion and for expert legal advice.