THREE BASIC THINGS THAT A BUSINESS OWNER SHOULD KNOW
Business Law is a broad term. It includes a variety of topics that affect a small business in different ways. Having at least some knowledge of these areas can be helpful to the small business owner.
My name is Glenn Duker. The purpose of this article is to present a few basic concepts, being matters that affect a small business directly. I have practised law since 1995 and I have represented various small to medium business owners over the years. One thing I have noted is that the best business people seek to understand business law and always seek good legal advice.
When selecting a business structure, you may want to operate as a sole proprietor. This is a simple structure and it is when you trade in your own name. You may also use a business name. While simple, this structure affords no asset protection and may not be the most tax effective modus operandi. A partnership is good if there are two or more people who want to share the profits as well as the risk but tends to suit few businesses because of its inflexibility.
Selecting the right premises can sometime make or break a business. You should think about the appropriateness of the location, the age of the premises, the cost of any fit out and perhaps most importantly, the position. Some businesses require a lot of exposure, being dependent upon passing trade. You should also think about the rent, not just at the start of the lease but also in subsequent years. Always consider the nature of the rent review and calculate what that rent might be in subsequent years. As a tenant, a shorter lease with many options to renew is often the safest option.
Business contracts are rarely simple. Terms of Trade are a classic misnomer. Many small business owners use generic terms or borrow someone else’s in order to save costs up front. This is bad business which generally comes back to bite them later. For instance, if work has been carried out and the terms of trade are not watertight in relation to such issues as retention of title (which law has changed dramatically in recent years), you might find that you supply goods and never be able to get paid in the event of the other party’s insolvency. In this sense, a little knowledge can be detrimental. Contractual terms must be tight in order to protect your legal interests as best as possible.
The comments in this article should not be construed as legal advice, as each situation is unique. By all means, understand the fee structure, but always consult a lawyer for legal advice in relation to your business matter.