3 Frequently Asked Questions On Taking Ownership Of A Business

3 Frequently Asked Questions On Taking Ownership Of A Business

Starting a business with friends is exciting, but don't let complacency override sound business practice. Talk to Ballantyne Law Group about the value of shareholder agreements.

I am starting a business with trusted friends. Do we need ownership documentation? 

Starting a business with friends or colleagues is always exciting. It is a time of optimism, goodwill and anticipation. However, friendship should never override good business practice.

Here on the Gold Coast, Ballantyne Law Group’s commercial law team can help you draft the legal documentation that formalises your business structure, including the ownership breakdown. Such documentation, in the form of a shareholder or partnership agreement, is especially important if circumstances change and potential disputes arise.

When this happens — and for whatever reason — a shareholder agreement brings certainty, protection and legal weight. Without it, you may be vulnerable to financial and asset loss, along with further costs should a dispute find its way to the courts. In other words, you can lose much more than friendship.

How common are business disputes and why do they happen?

Shareholder disputes are quite prevalent in Australia, including on the Gold Coast where comings and goings within the small business sector can be volatile.

Ballantyne Law Group has helped clients in disputes that have flared for many reasons, such as:

– misunderstanding over rights and obligations

– disagreement over strategy and management

– failures of disclosure

– concerns about mismanagement or fraud

– conflicts of interest

– breaching of agreements or duties

These and other dispute scenarios reaffirm the value of having documents of ownership drafted by lawyers and in place for your business and your protection.

That way, if a dispute occurs, you have the reassurance of a written and legal record that formally sets out the business structure, shareholder rights and responsibilities, partner exit strategies and any other matters/procedures that the business owners must follow when circumstances change.

Come into Ballantyne Law Group’s Southport offices on the Gold Coast and we can advise and assist you with all aspects of business structuring, ownership documentation, asset protection and dispute resolution.

What is business structuring?

In every kind of business – from sole proprietorships through to companies, discretionary trusts and more complex arrangements – proper structuring and taxation flexibility are vital for the protection of you and your assets.

At Ballantyne Law Group, we work with you, your partners and accounting and financial advisors to ensure your investments and business are structured effectively and efficiently.

This process is influenced by several factors, including:

– how many people have an ownership interest in the business

– whether the business will likely be raising money through further investment in the future

– the owners’ exit strategy

– whether there are any regulatory restrictions on ownership

Remember, as much as you and your friends/colleagues trust each other and are looking forward to launching a business, it never pays to be complacent. As we keep saying, do not let personal relationships override sound business practice.

Feel free to contact Ballantyne Law Group’s commercial law team on (07) 5606 7332 to learn more about essential business structuring and the necessity of documents of ownership.

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