Commercial Law

Our experienced commercial team are available to advise on a wide range of commercial agreements, including

• Commercial Leases (Including Retail Leases)
• Plant and Equipment Leases
• Business Sale and Purchase Agreements
• Share Sale Agreements
• Shareholders Agreements
• Partnership Agreements
• Joint Venture Agreements
• Franchise Agreements
• Distribution Agreements
• Supply Agreements
• Service Agreements
• Terms of Trade Agreements
• Employment Contracts
• Licensing Agreements
• Loan Agreements
• Confidentiality Agreements

Our expertise extends to reviewing existing Agreements or drafting and negotiating new Agreements. Whilst litigation through the Courts is generally viewed as a last resort, we are also available to mediate or litigate disputes arising from commercial agreements.

Our experienced lawyers at Pearce Webster Dugdales are well equipped to provide advise and assistance in relation to all aspects of Commercial and Retail Leases.

We can assist both Landlords and Tenants through all stages of negotiating, preparing and resolving all leasing matters.

RETAIL LEASES

The Retail Leases Act (“the Act”) applies to:-

• all retail premises Leases entered into after 1 May 2003;
• all retail premises where the premises are used predominantly for the retail sale of goods or provision of services; and
• retail premises where the occupancy costs are less than $1 million per annum.

Lease Agreement/Disclosure Statement

A draft Lease and the Information Brochure prepared by the Office of the Small Business Commissioner must be given to the Tenant as soon as negotiations commence.

The Tenant will be entitled to a minimum 5 year term (inclusive of further terms under the Lease).

At least 7 days before a Lease is signed, the Landlord must provide to the Tenant a complete Disclosure Statement in the form prescribed under the Regulations to the Act.

If the Landlord fails to provide the Disclosure Statement, the Tenant has 90 days from the date of entering into the Lease to give the Landlord written notice of failure to provide the Disclosure Statement.

Rent Review Mechanism under the Act

A Rent Review may be made by one of the following rent review mechanisms:-

• current market rent;
• predetermined fixed amount adjustment;
• CPI; or
• fixed percentage adjustment to the base rent.

Rent Review – Prohibitions

The Act prohibits the Landlord from:-

• having the rent adjustable at the Landlord’s discretion; or
• having a ratchet clause which does not permit the rent to fall.

Prohibition in recovery of some outgoings/expenses

The Act prohibits the Landlord from:-

• recovering the Landlord’s legal costs for the preparation of the Lease and Disclosure Statement;
• recovering any amount of land tax payable on the premises; and
• recovering management fees unless the management fees relate solely to the management of the premises and is exclusive of salaries and other administration costs related to the operation of the premises.

It is important that businesses abide by correct employee relation procedures to mitigate risk and the potential negative impact on staff, reputation and brand. Likewise, employees need to know about their rights and entitlements should there be any hiccups in the employment relationship.

At Pearce Webster Dugdales we work with our clients to identify effective and commercial ways to navigate the Employment Law space, including to advise both employers and employees about Employment Contracts, termination of employment (including redundancy and unfair dismissal), flexible working arrangements and workplace rights (including adverse action).

Please feel free to contact one of our experienced lawyers to discuss your Employment Law matter.

NATIONAL EMPLOYMENT STANDARDS (NES)

The minimum entitlements an employee must receive are:

• Maximum weekly hours of work – 38 hours per week, plus reasonable additional hours.
• Requests for flexible working arrangements – some employees who have worked for the same employer for at least 12 months can request flexible working arrangements, such as changes to hours, patterns or locations of work.
• Conversion from casual employment – casual employees who have worked for their employer for 12 months need to be offered the option to convert to full-time or part-time employment by their employer.
• Parental leave and related entitlements – up to 12 months unpaid leave for every employee, plus a right to request an additional 12 months unpaid leave.
• Annual leave – 4 weeks paid leave per year (pro rata for part-time workers), plus an additional week for some shift workers.
• Personal/carer’s leave, compassionate leave and unpaid family and domestic violence leave – 10 days paid personal/carer’s leave (pro rata for part-time workers), 2 days unpaid carer’s leave as required, 2 days compassionate leave (unpaid for casuals) as required, and 5 days unpaid family and domestic violence leave.
• Community service leave – unpaid leave for voluntary emergency activities and leave for jury service, with an entitlement to be paid for up to 10 days for jury service.
• Long service leave (LSL) – in Victoria, an employee can request to take LSL at any time after 7 years’ continuous employment.
• Public holidays – a paid day off on a public holiday except where reasonably requested to work.
• Notice of termination and redundancy pay – up to 4 weeks’ notice of termination (5 weeks if the employee is over 45 and has at least 2 years of continuous service) and up to 12 weeks redundancy pay, both based on length of service.
• Provision of a Fair Work Information Statement and Casual Employment Information Statement – Employers have to give every new employee a copy of the Fair Work Information Statement before, or as soon as possible after, they start their new job, and at the same time need to give every new casual employee a Casual Employment Information Statement.

Pearce Webster Dugdales are well qualified to advise you on business structures.

For the purpose of starting a business, you must decide which business structure is to be chosen to enable the business to operate.

Many issues must be considered in making this decision including: type of business, raising capital, how long the business is to last, the form of assets the business will accumulate, acquisition of existing business or start-up, flexibility as to entitlement, role of the members, taxation consequences (including capital gain), procedure if a member wishes to leave the structure, control and asset protection.

Preliminary advice:

Inter disciplinary advice from professionals including legal, financial adviser and accountant would be beneficial, prior to determining a business structure for any venture.

If you have an existing accountant, choice of structure may depend on your current tax position, and as well, you will need assistance for tax planning, preparation of annual returns and if necessary, compliance with ASIC and the ATO.

‘Business Victoria’ also has workshops and seminars available, particularly in the areas of:

• getting started
• growing your business
• getting and keeping the right staff
• achieving financial success
• moving on

Types of structures :

The main form of business structures usually come from the following group:

• sole proprietor
• partnership
• joint venture
• company
• discretionary trust
• unit trust and hybrid trust
• combination

Business name:

One needs to be aware that a business name is not a business structure. In that, if “George Henry Smith”( his exact name) commences as a sole trader printer, he may do so, but if he wishes to carry on the business in the name of “George Henry Smith & Co” he must register the second name with Business Victoria.

A business name provides an identity for the owner and may become a valuable and well recognised feature for the operation of the business.

This is only an outline in dealing with business structures, and should you commence a business, then, we recommend that periodic review should be made of such structure with an inter discipline approach.

Due Diligence/Confidentiality Agreement

Conducting a due diligence is an integral part of the purchase of any business. It involves the gathering of all information in respect of the business.

Prior to the conduct of a due diligence it is common for the Purchaser and its advisor to enter into a Confidentiality Agreement to preserve the confidentiality of the information that may be disclosed by the Seller.

It is also common for a Seller to insist that a Contract be entered into prior to a due diligence being conducted on the basis that a sale may be subject to a satisfactory due diligence being conducted.

External factors

External factors that may impact on the growth of the business can include:-

• The economy;
• The nature of the industry whether competitive or declining;
• Is the position or geographical location of any importance;
• Is accessibility an issue for employees, customers and suppliers of goods and services.

Checklist of all Information to be reviewed includes:

There are a number of documents and aspects of a business which should be reviewed when acquiring that business, including:

• All financials of the business including S.52 Statement (if the business to be purchased is under $350,000);
• The fixed costs of the business;
• What factors will impact on the business profitability;
• Lease of the business premises and any variations and renewals;
• Disclosure Statement accompanying the Lease to determine outgoings of the business premises;
• List of plant and equipment and their suitability for the business;
• List of employees reflecting their terms of employment and entitlements;
• List of all material contracts;
• List of all intellectual property including business name, trademarks, design and patents, logos and software licences;
• List of key personnel involved in the conduct of managing the business;
• The restraint and non-competition that will need to be imposed on the Sellers to quarantine the business goodwill;
• Whether the sale is of a “going concern” so that no GST is payable by the Purchaser or alternatively is it a sale of assets only whereby GST is payable;
• Is the Seller/Purchaser registered for GST?;
• Are systems in place such that the business can continue to operate without significant attrition of clients.