Setting up in business for yourself

Setting up in business for yourself

For the entrepreneurial amongst us, starting out in self-employment and building your own successful business, either by yourself or with other people, is a highly attractive proposition.However, there is a lot at stake with plenty of risks for the unwary. 

At the start, there will inevitably be excitement, enthusiasm and optimism. No need to dampen that with a pessimistic lawyer right? So thought many of our clients who we assist when things don’t quite go to plan and problems arise. The frustrating part of this for both clients and lawyers alike, is that many common problems and disputes are often wholly or largely preventable if some time (and yes money) is spent up-front addressing where things may go wrong, and then putting strategies and documents in place to mitigate against risk. 

Indeed, at a very basic level it is not uncommon for us to find that a client is a sole trader and has significant personal exposure against their own (often very valuable) assets with little, if any separation between them personally and their business. Handy from a tax perspective,right? Awful from an asset protection perspective when being sued. When we then run through potential alternative business structures, common answers we receive is that the person was unaware of alternative structures, or that they didn’t want to have pay for an extra set of tax returns for a company structure. 

Another common scenario we come across in our practice are people who are in business together, whether as directors/shareholders in a company, or in a loose partnership arrangement, but with no shareholders or partnership agreement in place. Everything ticks along nicely, until, well, it doesn’t. With a well drafted agreement, disputes and problemsbetween business partners can usually be resolved without great difficulty or cost. The alternative can be both slow and very expensive. 

Then there are the more mundane documents and clauses that you may not think are important, but which can bring businesses badly unstuck. Documents such as service contracts, incorporating directors guarantees on credit accounts or leases, and standard-form terms and conditions customised for your business and industry. All expensive, legal mumbo-jumbo right? Wrong. Often the cost of putting these documents and clauses in place up-front is a fraction of the cost of sorting out just one two disputes arising when they are poorly drafted or worse, non-existent. 

Going into business for yourself can be a very exciting time. Sitting down with a lawyer (and other professional advisors as required) is a sensible and pragmatic step to take to ensure that you understand some of the pitfalls to avoid in your business and better prepare yourself for long term success. If you would like to build a relationship with a law firm which takes a genuine interest in your success, then now is the time to get in touch. We recommend that in the first instance you discuss your situation with us in our SmartMove initial 30-minute discounted consultation (in person or by telephone), which we offer for just $80 and which can be booked through our website or by simply getting in touch. Austral Legal. Practical advice