By DC Strategy Lawyers
Business involves risk, whether it is a stand-alone business or a franchise business, it is important that you get the right advice and ensure you operate your business to minimise the known risks where you can. At DC Strategy Lawyers, we believe a regular health check for your business is vital to ensuring the dangers to your ongoing success are kept to a manageable level. Outlined below are some practical matters that a business owner should consider whether embarking on a new business venture or an existing business.
1. Contract Drafting and Review
It is important that you have well drafted documents to avoid dispute and disappointment in the future. Well drafted documents will ensure your contracts secure your business’ safety and enterprise value and ensure businesses like yours are successful, sustainable and secure, and by creating strong and viable commercial contracts for you.
All commercial contracts, from management and consulting contracts through to supply and distribution contracts, contain certain terms that you must have a good understanding of before you sign. Some key terms that may appear on your contract include payment terms, ownership rights, security for payment including personal guarantees, division of intellectual property rights, protective covenants and restraints of trade. To ensure you are properly protected, these aspects must be fully understood and addressed.
Once you have entered into a contract, it is very difficult to negotiate or amend terms and conditions, so it is essential to get the legal contract correct from the beginning. Failure to do so may result in a poor relationship between commercial partners due to misunderstanding.
There can be very serious legal and financial ramifications if you do not fulfil your legal obligations under the contract you signed, so you should speak with a lawyer before entering into any legally binding agreement. DC Strategy Lawyers can draft and review a range of documents, including heads of agreement, partnership agreements, joint venture agreements, shareholder agreements, and many more. We will work with you to clarify the terms and obligations in your legal documentation to minimise uncertainty and to minimise contract disputes.
2. Business Structures
It is essential to obtain the appropriate advice from the outset on what business structure will best suit your current situation, and how it can adapt to suit future development. You should closely work with your professional advisors to ensure the chosen structure maximises the potential and enterprise value of your business.
As there are many different forms of businesses, there are also various ways to structure a business. You should engage with your lawyer or accountant to advise you on the best business structure to suit your current commercial needs and design a strategy to help you transition between structures as your business develops. We will assist you in relation to company registration, incorporation, shareholder agreements and work with your accountants and financial advisors on any taxation implications, making the process of setting up your business structure smooth and simple.
Operating as a sole trader is the simplest way of operating your business. As a sole trader, you are the sole business owner, and you trade in your own name. As such, your revenue, and liabilities will be attached to your individual name.
If you engage in a partnership, you will have two or more people sharing a view of making profit. In this case, all responsibilities and liabilities are shared amongst partners according to the partnership agreement. In a partnership, you will typically need to register a business name.
A company is a separate legal entity, so it will have its own assets and liabilities. A company’s operations are controlled by its directors, and it is owned by shareholders. All companies need to be registered through the Australian Securities and Investments Commission (ASIC), and profits earned are taxed at the current company tax rate.
In some cases, it may be best to structure your business as a trust. A trust is a business structure in which a trustee operates the business. This trustee is responsible for holding income, property or assets for a group of beneficiaries. The principal aim of a trust is to reduce personal liability. Yearly administrative tasks are required, as is a formal deed, which can be quite expensive.
No matter what your plans are, and what the specific details of your business, the lawyers at DC Strategy will help you adapt to the most suitable business structure, empowering you to achieve your goals and objectives.
3. Licensing and Distribution
Your brand needs to be effectively communicated and preserved when licensing it to a third party. Licensing your product or brand interstate or overseas is a challenging process, requiring you to put trust in another party to preserve your brand and grow your business. You must be able to communicate your purpose, vision and style, and formulate a distribution agreement that is fair to both parties.
Specialisation in franchising, DC Strategy Lawyers have extensive experience in this area and can offer tailored solutions to your business needs, assisting you in establishing national and international distribution networks and license arrangements. We will work with you to prepare customised distribution, licensing and supply agreements that reflect the unique commercial needs of your business, that will allow your goods and services to be effectively licensed or distributed interstate or overseas.
Expanding your business is an exciting venture, but you must be mindful of some important issues that need to be clarified to ensure best communication with your international or interstate markets. We can assist you in resolving issues such as choice of law applying to the agreement, distinction between distribution or licence territories, delivery arrangements, product requirements, marketing, promotion and minimum performance criteria, to facilitate a successful relationship between you and your licensees or franchisees.
Creating your licensing and distribution agreements in a clear and detailed manner will ensure you attract and retain licensees who are truly excited about your product or service offering, and will work according to your business plan.
If you are growing your business through a licensing or distribution network, our professional advice will help protect your expanding business.
4. Trade Marks
Your business is unique and needs to be set apart from the rest. Our lawyers can help you establish a registered trade mark to protect your brand from imitation and ensure the value of your products and brand assets are retained.
A trade mark is your brand’s identity. This distinct word or logo associated with your business enables you to communicate to your customers who you are and the unique services you offer. It distinguishes the goods and services of your business from those of others’, and provides protection from other businesses using a similar mark. A trade mark can be a distinct word, phrase, shape, logo – or even a colour, sound or smell.
Registering a business name is not enough to protect your brand. This allows you to conduct your business under a certain name or title, but does not grant exclusive rights beyond trading under that name or stop any third party from using the same name, logo or brand. To obtain these exclusive rights to commercially use, license or sell the business trade mark, and to protect from other similar users, you must formally register your trade mark through IP Australia to be able to protect and enforce your rights. This is one of your business’ most valuable marketing tools, and will provide a competitive advantage over other traders.
5. International Trade Mark Registration
Before you expand your business to foreign markets, your intellectual property needs to be secured through trade mark registration. Our lawyers are currently managing the international trade mark portfolios of clients in many international jurisdictions, and they can assist you in this process.
When considering expansion of your business overseas, is it essential to ensure that your brand name, or trade mark, can be used in the countries you intend to trade in. Failure to do so could mean jeopardising an expensive investment.
Our trademark lawyers will assist you with the most costs effective way of obtaining international registration and ensuring protection of your trade mark in multiple countries through the filing of one application (where applicable). Lodging an international trade mark application does not need to be a difficult process, however it is essential that you do this well in advance of your international expansion. Our experienced trademark lawyers can help ensure your international trade marks are secured, and work with you through the application process.
Rostom Manookian – Legal Practice Director, DC Strategy Lawyers
With experience in business law, property law, intellectual property and franchise law, backed by his long history of managing client’s legal challenges, Rostom has a track record of dealing with legal issues on a pragmatic and commercial basis to avoid the costly mistakes that often result in litigation. He has hands-on experience with many networks and brands which gives him a unique perspective in the day to day operational and commercial concerns of franchisors and franchisees operating in business in Australia today. He writes regularly for a range of franchise business publications on the issues associated with franchise law and practice. Rostom is an excellent communicator with broad skills with many years specialising in business law makes him a highly valued advisor to DC Strategy’s domestic and international clients.