The foundations of any structure are the first thing that goes into the ground. And like a building, a business must be based on good foundations.
The two essential foundation elements are the business structure and the business contracts. Get these right, and business has a good chance to prosper.
Advice on the business structure and on contracts should be obtained when it is needed. Generally, that means when something different is about to occur in the business or there is a change in the law.
When things are about to change in the business, not only will there be a need to consider the transaction that is about to occur, but also issues such as taxation, employment law and consumer law may need to be looked at. Remember, once a contract has been entered into or a change made within the business, it can be difficult and costly to change what has occurred to remedy a mistake.
Specific advice on business structures may also be required.
People involved in partnerships and trusts will need advice regarding the running of the business and the potential impacts of their actions. The entry or exit of a participant is a critical time to get advice.
Businesses using a company structure also need advice on a regular basis. Every shareholder and director has rights that need to be considered and as company law is complex, there is an ongoing need to check that what is being done is within the law. The ASIC website contains some very user friendly information on company law and director’s duties and is an excellent starting point for more simple issues.
Of course, contracts are a cornerstone of the day to day operation of a business – and are used for many things. Examples of contracts that a business may enter into include leases, finance arrangements, purchase and sale agreements and employment contracts. Each has different critical elements and it it important that these are sorted out at the outset – not part way through or even after a transaction has been completed.
We all know that a building needs ongoing maintenance, so does a business. It is up to you to set up that maintenance regime.Building & Construction
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