The worst thing about committing a legal mistake is that everyone seems to find it obvious after the event especially your wife/partner. If business owners started to create new, exciting, unique legal mistakes then it would be a real challenge for us lawyers-fortunately for us they do not.  This means that your lawyer has probably seen the legal mistake before and has a good idea what to do.  Although it may not seem that way to you. Many small business legal services can be divided into “deals” where lawyers prepare documents to anticipate and avoid future problems or “disputes” where things did not get documented at the start and the parties come out swinging.  Usually deals are cheaper than disputes.   Experienced business owners are adept at working out when to document and when to wing it. Mistake no. 1        You unexpectedly die and your business stops dead too. This can be very inconvenient. Avoid this by having a will including a busines...

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A big problem for small business is success. Say you have gone into business with an equal shareholder (a partner) and managed not to go bust in the first two years.  With success comes a need for structure to maximise the benefit of your successful business idea. A first step is to introduce a written shareholders’ agreement.  Without one you are looking for trouble if your partner is undisciplined, dies, goes gaga, becomes bankrupt, decides to leave, wants to set up on their own next door taking the business (without you), or is just too generous with company information. A shareholders’ agreement will help in resolving disputes or if you want to bail out.  There is no standard shareholders’ agreement but here are five possible benefits of having one- 1.    Strict guidelines for transfer of shares. You get to choose who you are in business with. 2.    A set procedure for valuation and purchase of shares if your partner should want to leave, is ill or...

In collaboration with the Business Essentials Daily podcast we present   THE 10 GREATEST LEGAL MISTAKES IN BUSINESS. ..and how to avoid them Series  Episode 2 :   Taking the Pain out of Partnership Disputes You may also be interested in  Breaking up is hard to do   or one of the  other Episodes in this series  The Business Essentials Daily podcast features interviews with business experts and industry leaders, providing up-to-date, insightful advice on wide-ranging topics, including winning sales strategies, HR issues, mental health and leadership including the Ten Greatest Legal Mistakes in Business Series. If you have a legal issue call a lawyer.   Paul Brennan   can be contacted on 617 5438 8199   SPONSORED BY

In collaboration with the Business Essentials Daily podcast we present   THE 10 GREATEST LEGAL MISTAKES IN BUSINESS. ..and how to avoid them Series  Episode 1 :   The Ten Greatest Legal Mistakes in Business It is difficult for even the most creative business person to commit entirely new legal mistakes. They've all been done before - many, many times. Often people wait until they are desperate before they see a lawyer about a legal problem - this just seems to be human nature. But you don't need to learn the hard way. You can avoid legal mistakes if you know what is coming. “Good common sense advice on how to avoid costly mistakes”    Bob Ansett "A fantastic way to learn the tricks and traps in the law. Paul’s succinct yet humorous delivery makes a hard subject easy to understand - and the eBook is a fabulous resource to remind us about the lessons. Every business will benefit!"  Michael Schildberger, Business Essentials. What the papers say: American ...

Here is a seven point checklist of the predictable disputes between shareholders/partners who do not have a partnership or shareholders agreement: 1.   Bidding for the business name and domain name registrations belonging to the partnership -Note that these registrations do not mean that you own the name as only a registered trademark confers ownership. Therefore, they have limited value. You could agree not to use the registrations, but this is a waste, isn't it? 2.   Preparing final accounts- Should this not be done by an independent accountant so it is all above board? Well yes, if you both don't mind paying more for an accountant who is unfamiliar with the business, charging more and taking longer. 3.   Competition- You could agree to split the client list and look after your own clients. But what fun is that? Outright war may be inevitable, especially if you are the stronger partner. 4.   Threatening to sue your ex-partner- You may see this a...

Management getting you down?  Wait a minute, you are management. You are a band of four equals growing a company to sell it for a killing. Initially, your conservative, systematic approach mixes well with their knockabout, cavalier manner.  However, as the company becomes more successful, the other three shareholders increasingly play the three musketeers as if you were one of the Cardinal’s men.  Voting in the board meetings becomes three to one and not one for all. They decide to make your life a misery so that you leave without insisting on a full 25% share.  They deliberately criticize or ignore everything you say, treating you like an employee and starving you of information to upset you, despite you being a director.  This strategy can be very successful Sun Tzu advised that it was better to crush your enemy’s will without fighting. You tell your lawyer that it is like having a nagging spouse who does not listen to what you say and spends money like water ...

  You r business partner  is not pulling their weight. Unless you can lower your expectations there will come a time when you decide to go it alone.  You go to the lawyer who has been acting for the partnership to whinge about the other partner. However, he tells you that he has a conflict of interest and he cannot act for you.   You choose another lawyer. He will be tempted to lecture you on the imprudence of entering into business without a partnership agreement. If this takes any more than half an hour, you may not have made the right choice of lawyer. Of course, you don't have a partnership agreement! Who does he think you are, BHP?   If you do not have a partnership agreement then the law generally lays down about ten ground rules:   1.   Partners must make financial contributions equally; 2.   Partners are equally responsible for the debts of the partnership; 3.   A partner may need to pay up the whole debt, not just half...