If you are in partnership with a non-family member or other third party business partners, it is essential that you have a properly drafted Partnership Agreement setting out all the essential terms of the way you operate your business and what will happen if certain things occur.
The type of agreement that you have with your business partners will depend upon the structure that you use to operate your business within. For example, if you have a company structure with different shareholders, you will need to enter into a Shareholders Agreement.
If you operate your business through a Unit Trust, you will need to enter into a Unit Holders Agreement. Whatever the case, all business partners need to enter into a form of partnership agreement, just in case there are disputes or someone wishes to leave the business unexpectedly. There also needs to be provision for what occurs if one or more of the parties dies or becomes totally and permanently disabled or loses their capacity.
If someone dies or becomes totally and permanently disabled, there needs to be a Buy/Sell Agreement in place which is usually supported by some form of insurance to secure the payout of the share of the person who dies or becomes disabled. This Agreement is sometimes referred to as a “Business Will” and avoids any awkward situations where the business is placed in a position where it is required to pay out significant amounts of money to the estate of the deceased business partner. Sometimes this, combined with the loss of the business partner, can ruin the business and make it impossible for it to continue.
Attwood Marshall Lawyers have senior experienced commercial lawyers who specialise in this complex area of law. It is very important that you obtain correct legal advice concerning your business structuring. It is never too late to review your structures and we recommend that you regularly review your situation, along with your estate planning and insurance requirements.
Contact Department Manager Christine Martin on 07 5506 8245 or freecall 1800 621 071 to make an appointment or to obtain more information or use our Online Enquiry Form to send us your details. With three offices conveniently located at Robina, Coolangatta – Tweed and Kingscliff you can also visit an office near you.