Business Structures – Getting it right and keeping it that way.

Posted by Malcolm Campbell on 24 September 2015
Business Structures – Getting it right and keeping it that way.

There are significant legal and regulatory requirements imposed on companies in Australia. In many instances the ultimate responsibility for compliance with those requirements rests with a company's officeholders. It is essential that company directors and other officeholders understand their obligations and the personal liability that can arise where those obligations are not met.

Careful consideration also needs to be given to the internal rules of a company. Disputes can and often do arise over issues such as the appointment and removal of directors and changes in the shareholding of a company. Without a clear agreement between shareholders these disputes can snowball into costly and time consuming court action.

Whether you are starting up a new company, running an established company or are involved in a company dispute, we can help you to understand the rights and obligations involved in operating a company.

 We can help with:

•    Incorporation;

•    Sale of Shares;

•    Directors Duties;

•    Shareholder rights;

•    Disputes and Litigation;

•    Creditors Statutory Demands;

•    Winding Up Orders;

•   Administration and/or Liquidation

Once the right structure is decided upon for your business an appropriate agreements is important for business partners to ensure that there is a rule book for the operation of the business and any disagreements or misunderstandings can be resolved quickly, fairly and in accordance with a predetermined process.

Without a well considered and carefully crafted written agreement in place business partners are often left in stalemate when a dispute or misunderstanding occurs between them. Company Constitutions and Trust Deeds rarely go into sufficient detail to provide mechanisms addressing specific operational and managerial issues which may arise and they certainly aren’t tailored to the businesses particular needs. Further, without such agreements owners with a minority share of a business can be shut out of the operation of the business. In the absence of an appropriately drafted agreement affected business owners are left to either rue the day they became involved in the business or commence expensive, time consuming and stressful legal proceedings to seek the relief they desire.

 Whilst ideally these types of agreements should be put in place at the outset of a business being commenced it is never too late to implement one. These agreements can deal with any number of issues ranging from what matters are for the board of directors to decide upon, and what decisions are for the owners, how and when profit will be distributed, how and when further funds can be raised, how, when and why owners can/must depart from the business and how the value of their portion of the business will be valued.

Not only can these agreements be of great benefit to the business owners but they can also add value to the business itself, make it easier to raise finance (many financial institutions require such agreements be in place before lending) and can make it easier to sell the business or a part of it when the time comes.

We have helped many business owners over the years learn about, negotiate and the implement such agreements.

Should you have a situation you would like to discuss, call Dooley & Associates and one of our legal staff will be happy to assist.