Reflections 2018

It’s incredible, but we’ve now been in business for three years.  Thanks for all the messages and “likes”.  It’s been another interesting year.  Here is some news and a snapshot of some of the issues that have come across our desks recently.

 

Chairman of Business and Corporate Law Committee

 

Rod has been appointed as Chairman of the Business and Corporate Law Committee of the Law Institute of Victoria.  He is enjoying giving back to the profession and to the business community, using the knowledge and experience he has gained in the legal profession over the last 27 years.

Professional Advisory Board

 

A growing business has set up a board of professional advisors to meet with its directors and other stakeholders from time to time, and Rod has been appointed to the board as legal advisor.  This arrangement has worked well.  The business has been guided through some key strategic decisions and the business is growing from strength to strength.  Management seems to derive considerable benefit, and even enjoyment, from having its key advisors collaborating together at the same time, bouncing ideas around with them, hearing their objective, dispassionate perspectives and tapping into their networks.  Through gaining a deeper knowledge and understanding of the client’s business, the advisors are able to spot issues that might not otherwise have come to their attention, and to provide more valuable advice to the business.

 

Unfair Contracts

 

We recently helped a client to avoid unfair contract terms and negotiate significantly beneficial amendments to the contract.  It is important for businesses to know that, in a fairly wide-range of circumstances, provisions in a contract can be declared void and unenforceable if they are “unfair”.  The issue is most relevant to businesses which want to avoid the effect of a contract term which it believes to be unfair, or which want to know if there is a risk that terms of its standard contract could be void and unenforceable, and mitigate any such risk.  For more information regarding unfair contract terms legislation and when it applies, see our article here.  Regarding the recent case of ACCC v Servcorp, see our article here.

 

Business Sales 

 

  • We assisted a client with the purchase of a business in the sports and recreation sector.

  • We have also recently received instructions to prepare a business sale agreement for the sale of an engineering business.

 

Share Sales 

 

  • Some clients had developed a very successful business, and had identified purchasers who were prepared to pay a premium for the business and also offer them roles with the purchaser.We were instructed to prepare documentation for the share sale and assist with negotiations.The challenge was to create a balanced document which got the deal over the line without getting bogged down in lengthy negotiations, but which also gave the clients reasonable protection.As is usual with the sale of equity, the focus was on warranties.

  • We assisted a medical professional join a group of medical professionals.This involved providing assistance and advice in connection with a Share Purchase Agreement, a Shareholders Agreement and an Employment Agreement.

 

Shareholder Agreements and Exits 

 

  • We have had a few matters recently where we gave advice to “exiting” shareholders (on proposed Deed of Release and Share Sale and Separation Agreement), and assisted with negotiations regarding the exit terms.We are giving yet another client advice regarding her legal position under a Shareholders Agreement in relation to a proposed exit. 

  • Not having a proper Shareholders Agreement in place often results in costly and acrimonious shareholder disputes.Typically, these disputes erode the value of the business and can even threaten its viability.See our article on Shareholder Disagreements and Business “Prenups” here .And see our article on Breaking the Deadlock, “Shotgun Clauses” and Free Exits here .  A comprehensive Shareholders Agreement is best but even one that only contains exit clauses and deadlock breaking mechanisms (e.g. “shotgun clauses”) would help.

 

Other Matters

 

Other matters we have been involved in recently include the following:

 

  • Partnership Dissolution - farming business

  • Joint Venture Agreement - extraction and sale of minerals

  • Structuring - to set up an asset holding entity

  • Licence Agreement - an inventor gave another entity the right to use his IP

  • Terms and Conditions and Privacy Policies – online businesses

  • Contractual Dispute – between joint venturers

  • Non-Compete Agreement and Subcontractor Agreement - agency arrangement

  • Advice on proposed Shareholder Agreement - proposed investment in a manufacturing business

  • Leases – renewals for landlord; advice and negotiations for new leases for tenants

  • Trade Marks – advice and applications

  • Rules of Incorporated Association - Rules updated; advice given regarding procedures and documents needed for the required special resolution

  • Retirement Villages – document review for compliance with legislation

  • Mobile Dwelling Village - dispute with residents

 

It’s been most enjoyable and we are looking forward to more of the same!

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Contact

If you would like to discuss any aspect of this article with us, or share your own experiences, please contact Rod Stumbles at +613 8692 7255 or here.

DISCLAIMER

 

This article provides general information only and is not intended to constitute legal advice.  No lawyer-client, solicitor-client or attorney-client relationship has been created between us.  You must not rely on the contents of this article, whether as an alternative to legal advice from a lawyer or other professional legal services provider or otherwise.  You should not take, discontinue or refrain from taking any action because your understanding of the contents of this article, including without limitation delay seeking legal advice or disregard legal advice.  If you have any specific questions about any matter, you should engage us or other lawyers or other professional legal services providers to provide you with the necessary advice.  Keep in mind that you may be facing important deadlines so you should not delay in engaging someone to provide you with the advice.

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