Going into business can, and should be, an exciting step forward for any budding business owner. Before doing so, it is important to go in with an eyes wide open approach.
The most common forms of ownership are as a sole trader, in partnership or as a limited liability company. Your lawyer can advise you on the differences between these. The Companies Office has a number of helpful articles and information pages to get you started https://www.companiesoffice.govt.nz/. You should obtain legal and accounting advice regarding the appropriate structure and entity in which to purchase and own your business.
Whether purchasing an existing business outright, buying into an existing business or starting a new business from scratch, there are a number of important matters to consider.
If you are buying an existing business, your lawyer should draft or review the agreement for sale and purchase prior to you signing it. This will give you the best protection and allow you to get out of the agreement after you have signed, if you discover unsatisfactory things about the business during your due diligence.
Your lawyer will be able to assist with key matters for you to consider and deal with as you go into your specific business, including;
· Premises and leases
· Warranties from the previous owner
· Supply agreements
· Restraints of trade
· Assets and stock
· Websites, emails, social media
· Intellectual property
· COVID19 implications
If you are going to own shares in a company with one or more other shareholders, then you should ask your lawyer to prepare a shareholders agreement. Shareholders agreements are confidential and can provide rules and information for anything company related, including the day to day operation of the company, how decisions are to be made and what happens if a shareholder wants to sell or buy shares.
Buying or starting a business is made simpler with the right help. Reach out to our commercial team with any queries so that you can focus on your new business.