Publications > Buying or establishing a small business in Queensland

 

Unfortunately, too many new small businesses fail within a very short period of time, often with disastrous personal losses to the owners.

 

The best chance for new business success is to get the right start with professional guidance from Rostron Carlyle’s Solicitors.

 

Business Structures

When setting up a new business or buying an existing business it is very important that you decide on your business structure.

 

You have the choice of running the business as:

 

	sole proprietor;
	partnership;
	company;
	trust; or
	a hybrid structure.

 

Rostron Carlyle can advise you on the structure which best suits your needs considering your tax position, personal legal liability and availability of capital.

 

Buying an existing business

Serious negotiations usually proceed with the vendor’s agent handing you a draft written contract. Rostron Carlyle can provide necessary legal advice prior to signing the contract. There may be the choice of either buying the assets of the business or the shares of the company. Both have advantages and disadvantages.

 

If you are pressed by the agent to sign and pay a deposit, Rostron Carlyle can approve the contract prior to signing and ensure a full refund of the deposit if the purchase does not go ahead.

 

The contract

Rostron Carlyle will study the terms of the contract to ensure they reflect your chief concerns, such as the potential earning capacity of the business and the reasonableness of the sale.

Amongst the various terms negotiated in a contract, our office will identify what is to be included in the sale and, in particular, ensure the following issues are canvassed:

 

	your rights to the business name the price of existing stock and the fixtures and fittings included in the sale;
	the vendor’s warranties and representations on the sales performance of the business goodwill;
	your need for a restraint of trade on the vendor to prevent direct competition;
	your need for tuition from the seller on running the business;
	your access to client lists and records;
	transfer of licenses and permits required for the running of the business at that location;
	transfer of a lease;
	your access to finance for the purchase.

 

Goodwill

You may be asked to pay for the goodwill or, in other words, the intangible advantages built up by the business such as reputation and connections, which differentiate the value of an existing business from a brand new business. Rostron Carlyle can recommend a third party who can assist in establishing whether goodwill exists and, if so, what constitutes a fair price.

 

Rostron Carlyle will establish whether goodwill exists and, if so, what constitutes a fair price.

 

Franchising

Buying a franchise involves buying into an existing business chain with special rules regarding the purchase of stock, shop fixtures and fittings, and marketing. For this infrastructure you pay an initial entry cost and ongoing franchising fees.

 

When handed a franchising agreement for your signature, as with buying an existing business, Rostron Carlyle will provide expert legal advice so negotiations proceed with your interests foremost. In particular, our office will look into:

 

	the reputation of the franchise;
	demand for its products;
	the franchising fees;
	duration of the franchise;
	the operating procedures.

 

Setting up a business

 

Leasing

Your business location and rent paid has a huge impact on your business operation. It is vital for you to realise that the terms and conditions of the lease can be negotiated.

 

Rostron Carlyle will ensure that the lease document reflects your needs. Importantly, we will discuss with you how rent is increased over time; the lease’s duration; the ways in which the lease can be terminated; payment for repairs, fixtures, fittings; and your share of rates.

 

Finance

Obtaining finance, choosing from the myriad of loans on offer, and understanding your obligations under a loan agreement of personal guarantee won’t be as daunting with the assistance of Rostron Carlyle.

 

Insurance

Worker’s compensation insurance, by law, is compulsory. It is also important to consider insurance against fire, burglary, public liability, personal disability, and loss of profits.

Rostron Carlyle will advise you on all your insurance needs.

 

Operating a business

 

Many facets of the law come into play while operating a business. Guidance from Rostron Carlyle on these matters before they become an issue may save your business.

 

From the start, Rostron Carlyle will provide advice on legal issues arising from:

 

	corporate governance issues (if the Corporations Act 2001 (Cth) applies
	copyright and trade marks
	consumer protection and trade practices
	commercial contracting and terms of business;
	debt recovery
	all aspects of employer/employee relations
	superannuation, and
	taxation.

 

Legal Costs

 

Ask Rostron Carlyle about the legal costs and the processes involved in purchasing or setting up a business.

 

Our office will also advise you on State and Local Government charges including business name registration fees, lease registration fees, licensing and permit fees and stamp duty on the purchase of a business.

 

"The information contained in this article is general in nature and cannot be regarded as anything more than general comment. Readers of this article should not act on the basis of this comment without consulting one of Rostron Carlyle's legal practitioners who will consider their particular circumstances".

 

Related articles

 

	What is a discretionary trust?
	Statutory directors duties - an introduction
	Introduction to Shareholders Agreements

 

Expertise

 

Rostron Carlyle's lawyers have a wide range of experience assisting people to buy or establish a new enterprise.

 

Not only will you find that Rostron Carlyle is likely to have assisted someone in your exact situation, but you’ll find that a Rostron Carlyle lawyer can distill a complex legal issue into a set of actionable options for you to consider.

 

A Rostron Carlyle lawyer will be a person that you can relate to.  We'’ll talk your language. Most

importantly, a relationship with a Rostron Carlyle lawyer will be "a relationship you can rely on".

 

 

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