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Business Law & Leasing

If you are in business, it is important to be guided by experienced professionals who offer value for money. Whether you are starting a new venture, growing an established business, or getting ready to sell up and retire, we can help. We provide professional advice and guidance for a range of business matters including:

  • buying and selling a business, including franchise businesses
  • business structures – partnerships, trusts, and corporations
  • business succession planning and asset protection
  • partnership and joint venture agreements
  • commercial and retail leasing

Buying or selling a business

Whether a transaction is large or small, or involves the sale or purchase of assets, shares, or a combination of both, it is important that each party to a business sale or purchase be independently advised by a lawyer and, in most cases, an accountant.

It is important to ensure that terms and conditions are properly negotiated and documented in a written contract. The contract should detail the parties’ rights and obligations, deal with matters such as stock, goodwill, employees, and GST (as relevant), and set out processes to manage various contingencies.

The contract and incidental agreements (i.e. lease or hire agreements) should be carefully reviewed, with due diligence carried out before entering into a legally binding agreement.

Business structures

The legal structure you choose for your business will depend on a range of matters such as the scale of your proposed operations and your plans for future growth, the industry in which you operate, and your financial and personal circumstances. We can help you choose a structure that fits your needs. Common business structures include:

  • Sole traders – may be appropriate when starting a small-scale enterprise on your own using an Australian Business Number (ABN), however, a sole trader is legally and financially responsible for all aspects of the business.
  • Partnerships – may be ideal when another person or people are involved in, and contributing to, the business. In such cases debts and losses incurred are shared by the partners regardless of which partner ‘incurs’ the relevant debts or losses. A formal partnership agreement is important to allocate rights and responsibilities between the partners and can set out procedures for termination, retirement, disputes, or sale of the business.
  • Companies – corporate structures can provide some level of protection for directors and officers. The company has its own legal identity and can enter contracts in its own right. Companies are registered with the Australian Securities and Investments Commission (ASIC) and have ongoing costs and annual reporting obligations.
  • Trusts – can assist with asset protection and may provide strategic outcomes when it comes to income tax and capital gains. Trusts are complex however and must meet compliance requirements and be properly managed to ensure they deliver the anticipated outcomes.

    Franchises

    A franchise is an arrangement whereby the owner of a branded product or service (the franchisor) assigns to an independent third party (the franchisee) the right to sell that product or service using the franchisor’s brand, marketing, and systems. Common examples include Donut King, Just Cuts and 7 Eleven.

    Typically, the franchisor will be involved on an ongoing basis to ensure that training, marketing, and management are all carried out to an acceptable level by the franchisee.

    The Franchising Code of Conduct governs franchises by setting out the rights and responsibilities that apply to franchisors and franchisees.

    Commercial and retail leases

    Commercial and retail leases contain legal terms and conditions through which a business may occupy premises to run an enterprise. Lessors (landlords) and lessees (tenants) should understand their rights and responsibilities under a leasing arrangement and the relevant laws that apply to certain types of leases.

    A lease agreement should be prepared and reviewed by an experienced lawyer. Potential lease disputes can be minimised when the terms of the agreement are clear and complete, and the parties understand their rights and responsibilities.

    Typical terms of a lease include, but are not limited to:

    • Area to be leased– a clear legal and physical description of the premises including the use of facilities such as carparks, storage, amenities, and other common areas.
    • Term of the lease – clearly detailed terms and renewal options that should coincide with the respective parties’ business and investment objectives.
    • Rent and outgoings – including the method and time for reviewing rent and the outgoings payable by the lessee.
    • Permitted use – allowing for the lessee’s intended use which may need to consider any proposed growth in business activities. Note that the lessee is responsible to ensure that any necessary approvals or licences are in place.
    • Fit-out and refurbishment – if relevant, the lease should describe any fit-out permitted, who is responsible for costs and installation, whether fixtures may be removed by the lessee at the end of the lease and any refurbishment obligations when the lease expires.

    Retail leases in Queensland are governed by the Retail Shop Leases Act 1994 (Qld) which aims to enhance consumer protection for lessees. It sets out minimum terms for lease agreements and promotes transparency and fairness in the retail leasing industry.

    Generally, and subject to some exclusions, the Act applies to premises located in a retail shopping centre and / or premises that are used wholly or predominantly for conducting a retail business.

    Lessors must provide prospective lessees or lessees exercising an option to renew a lease, specific disclosure information. Failure to provide a disclosure statement or providing a defective disclosure statement may be grounds for a lessee to terminate a lease.

    Leasing disputes often arise because the parties are unaware of their rights and responsibilities under a lease agreement, or a written lease is non-existent, incomplete, or ambiguous. Investing time and effort to have a lease professionally prepared and reviewed before allowing or taking possession of premises can minimise potential disputes, business interruption and financial loss.

    We are experienced business lawyers and can help you with a range of business and commercial leasing matters.

    If you need assistance, email [email protected] or call 07 3855 8880 for a no-obligation discussion and for expert legal advice.