Purchasing an existing business can be an exciting opportunity. In this article, we outline some key points to consider before signing a contract for a small business such as a cafe, gym, or takeaway shop. Most such purchases in Queensland use a standard form contract prepared by the Real Estate Institute of Queensland (REIQ). ...
If you’ve been asking yourself how to sell a dental practice, this article explains basic but necessary steps to maximise the sale price of your business.
As is always the case with selling a business, there are a number of options you can choose to sell your dental practice. Let’s look at some factors you should take into account in order to successfully accomplish your goal.
What to Consider When Selling a Dental Practice
The first question you need to ask yourself before selling a dental practice is whether you want to sell it completely or whether you want to stay involved in the business in some way or another.
Both options are possible.
However, you should consider the Australian Dental Association’s Policy Statement (Policy Statement 5.3 – Practice Ownership, point 3.1) before making up your mind.
The Policy states that “dental practices should be owned and, or at least, effectively controlled by dentists.”
If you want to sell your practice and have no business interest in it, you will only be able to sell it to another dentist.
Best Time to Sell a Dental Practice
Once you decide what option is best for you – sell it completely or stay involved in the business– don’t rush and look for a potential buyer immediately. You need to sell your practice at the right time.
Firstly, make sure your dental practice is visually attractive – first impressions do count.
If you’ve been planning to renovate your practice in the past, now would be a good time to do it. Even though it is not the decisive factor, a well-maintained establishment is more appealing to potential buyers than a run-down one.
As with any other business, the best time to sell is when the business performs well. Nobody will want to buy your practice ...
If you have thought about leasing part of your commercial, industrial or agricultural land to increase the returns on your investment, there are a few hidden pitfalls of which you should be aware.
When you lease part of existing commercial, industrial or agricultural land, and that lease is for more than 10 years (including any option periods), that lease is deemed a subdivision of your land and there is a legislative requirement for you to obtain subdivisional approval from the local Council.
This can be very costly in both time and money.
On a positive note, this does not apply to all leases that are over 10 years, it only to those leases that are leases for part of the land. If a lease of any length is of a building on your land and the whole of the leased premises are contained within that building, subdivisional approval will not be required.
If there are open areas such as outdoor dining areas, storage areas, access ways/ drive-thru’s etc and they are included as leased areas, there will be a requirement for you to obtain subdivisional approval from the Council.
If you are intending the tenant to have the use of such areas as part of the lease, it may be more appropriate to licence the use and occupation of those areas to the tenant rather than leasing them.
In order to try and get around the requirement to subdivisional approval from Council, landlords have in the past registered a number of consecutive leases of 10 years or less over part of the land to stay under the ‘10 year’ threshold.
For example, if a landlord and tenant agreed on a 20-year lease for part of the land (which, even if it was a 10-year lease with a 10 year option would require subdivisional approval) the landlord and tenant would enter into and register a 10 year lease and then enter into and register another 10 year lease simultaneously.
The commencement date of the second 10-year lease will start when the first lease ends. Although this may have worked ...
Why is a shareholders’ agreement valuable? How can it protect you and the future of your company?
A shareholders’ agreement is a contract between the shareholders of a company that addresses the management and sets out the rights and obligations between shareholders.
However, it is not a one size fits all document. A shareholders’ agreement should be tailored to the specific needs of the company, its business and the shareholders.
A shareholders’ agreement addresses several important matters that can arise during the life of a company:
- Exit strategies for the shareholders, such as the agreement to sell shares on particular occurrences like the death of a founder or an offer to acquire the company.
- Expectations of working owners.
- How company directors are appointed and removed.
- Voting rights of both the directors and shareholders. Generally, the directors control the day to day operations of the company. However, there may be certain critical business matters that requires all shareholders (or shareholders who together hold a particular percentage of the company’s share capital) to decide on that matter.
- The dividend distribution policy for profits of the company.
- The requirement and conditions of any shareholder loans.
- The restrictions on competition with the company.
- A dispute resolution procedure in the event that a dispute arises between the shareholders.
Some specific matters that should be considered:
- What occurs in the event of a voting deadlock? For example, a particular director having a casting vote in addition to their deliberate vote, or a third party referee (such as the company’s accountant) who may make recommendations on decisions.
- Do the key roles of each individual key person need to be specifically set out in the agreement? This may avoid disputes in the future.
- Does the ...
A restraint of trade clause which provides for different levels of restraint in an employment contract is commonly referred to as a cascading restraint clause.
Cascading restraint clauses can operate by providing for multiple options in relation to distance, geography, time periods and the nature and type of conduct to be restricted.
Each variable is treated as an individual clause. Cascading restraint clauses cab be annulled and are independently binding. This means that where one level of restraint may be deemed too harsh, an employer can look to enforce a lower level restraint without the entire clause being invalidated.
The operation of cascading restraint clauses was tested in OAMPS Insurance Brokers Ltd v Hanna  NSWCA 781.
The decision by the New South Wales Court of Appeal confirms that these clauses are valid and enforceable.
OAMPS Insurance Brokers Ltd v Hanna
Mr Hanna started employment as an experienced insurance broker with OAMPS in 1990, resigned in 2010 and moved to a position with another insurance broker firm.
During his time with OAMPS, Mr Hanna’s employment was subject to a written employment agreement. A schedule to the employment agreement contained a post-employment restraint of trade clause.
After Mr Hanna left OAMPS, a dispute arose regarding the enforceability of the restraint clause in the contract.
The restraint clause itself was a cascading clause with 9 restraints. The restraints ranged from 15 months across Australia, down to 12 months across metropolitan Sydney.
OAMPS sought an order to prevent Mr Hanna from providing services to a number of its clients. The order was granted and Mr Hanna was restrained from dealing with 17 clients for a period of 12 months.
Mr Hanna advanced a number of grounds on ...
A representative of the Australian Competition and Consumer Commission (ACCC) recently noted that consumers engage with online reviews to make decisions on whether to purchase a product or use a service (‘Wisdom to remove unfair contract terms’, ACCC Media Release 104/18, (located at: https://www.accc.gov.au/media-release/wisdom-to-remove-unfair-contract-terms)).
Two recent ACCC actions indicate that attempts by businesses to control online reviews may not go unnoticed. ...
So, you’ve recently received payment from one of your customers for goods or services provided by your business, only to receive a letter from a liquidator demanding you to pay it back on the basis it was a ‘preferential’ or ‘unfair preference’ payment?
You may be wondering how you respond to the demand, and most importantly, will you have to pay the money back. ...
This time last year, the protections against unfair contract terms were extended under the Australian Consumer Law (ACL) to include standard form contracts involving small businesses.
A ‘standard form contract’ is generally a pre-prepared contract which offers the same or similar terms to all consumers, and is often utilised by larger businesses to improve efficiency.
In conjunction with the new laws surrounding standard form contracts, the ACCC has ramped up its efforts to investigate businesses relying upon unfair contract terms. This recently culminated in the commencement of proceedings against JJ Richards & Sons Pty Ltd (JJ Richards), in which the ACCC sought to enforce the extended provisions. In the proceedings, the ACCC alleged that many of JJ Richards’ clauses:
- created a “significant imbalance” in the rights and obligations of JJ Richards and small businesses;
- were not reasonably necessary to protect JJ Richards’ legitimate interests; and
- would, if relied upon, cause significant financial detriment to small businesses.
The Federal Court of Australia recently delivered its judgment and found that, of the eighteen terms contained within JJ Richards’ standard form contracts, the following eight terms were “unfair” and subsequently declared void:
1. Automatic renewal: this clause bound customers to subsequent contracts unless they called the contract within 30 days before the end of the term.
2. Price variation: allowing JJ Richards to unilaterally increase its prices.
3. Agreed Terms: removing any liability for JJ Richards where its performance is “prevented or hindered in any way”.
4. No credit without notification: allowing JJ Richards to charge customers for services not rendered for reasons that are beyond the customer’s control.
5. Exclusivity: granting JJ Richards ...
What your Business Lawyer Does
When selling your business there are many legal factors to consider, and if you are considering selling your business you should seek advice and guidance from a business lawyer well in advance.
A Brisbane based business lawyer will have intimate knowledge of how businesses are valued, and the skillset and expertise to prepare the necessary documentation. Doing these things will help ensure you receive the best possible outcome from the transaction. Skipping this step or trying to negotiate a business contract yourself, without the assistance of a business lawyer, may see your contract fall over, or see you having to deal with unexpected and unwanted problems.
Do I need a business lawyer?
There are many advantages a business lawyer can bring to the table that can assist with the sale of your business. An experienced business lawyer can protect your best interests by providing efficient, strategic advice throughout the entire process.
There are a few key steps involved in selling a business that requires professional advice.
A business lawyer acting on your behalf can provide advice regarding how to structure the sale of your business, and prepare the necessary documentation to ensure that the transaction gives effect to your best interests. It is critical that the terms and conditions of the sale of your Queensland business are set out clearly. A Brisbane business lawyer will be familiar with the overall processes involved in buying and selling local businesses, providing you with confidence that all of the paperwork will be prepared to ensure that the transaction proceeds smoothly.
Transfer duty & taxes
When selling a business in Queensland there are often transfer duty consequences, and knowing the ins and outs of what’s involved calls for an experienced business ...
Image Via news.com.au
Janine Allis, founder of Boost Juice and Retail Zoo, delivered a punch to two gym owners and Shark Tank hopefuls this week. The guys were pitching a food product to the Sharks, and the packaging revealed it was ‘engineered to accelerate muscle growth and increase energy levels’. ...