• Commercial & Business Law

    Commercial & Business Law

    We are first and foremost commercial & business lawyers in Melbourne for people.  Our team will work with you to develop, manage and execute your business plan while ensuring you exploit opportunities, manage risks and achieve commercial success.  

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  • Dispute Resolution & Litigation

    Dispute Resolution & Litigation

    We are litigation lawyers in Melbourne specialised in commercial litigation and dispute resolution, we appreciate that resolving a dispute requires more than just following court processes. You can trust Taurus to be in your corner, and fight to deliver results.

     

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  • Property & Conveyancing

    Property & Conveyancing

    Enhanced by a wealth of experience, Taurus’ conveyancing lawyers in Melbourne can assist you with all of your conveyancing needs.

    Whether you are selling or purchasing your dream home, we are experienced in handling the conveyance to ensure the smooth settlement of your property.  We successfully perform all steps of your conveyance from reviewing or drafting the Contract of Sale through to confirming settlement has been completed with your real-estate agent.

    We are passionate about providing exemplary personal service to every client and understand that we are here to assist you during one of your most exciting and stressful transactions. We ensure that all of our clients are provided with regular updates and use our own portal allowing clients to login to view the progress of their transaction at any time.

    The conveyancing lawyers at Taurus are registered with PEXA and experts in their field.

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  • Intellectual Property

    Intellectual Property

    One of the most valuable assets of any business is its intellectual property. We as intellectual property lawyers Melbourne empower our clients to protect their brand, systems and confidential information by offering them a broad range of legal services related to their IP.

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  • Insolvency & Bankruptcy

    Insolvency & Bankruptcy

    We act on behalf of business lawyers, creditors, debtors, and insolvency practitioners in a variety of re-structuring and insolvency matters.

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  • Debt Recovery

    Debt Recovery

    We will recover your debts as if they were our own. For many owners, directors, and managers, debt recovery is one of the most confronting and challenging aspects of running a business. It is also crucial to the cash flow of the business, and therefore critical to its financial success.

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  • Employment Law

    Employment Law

    We help our clients meet the demands and challenges of managing their workforce.

    We have a team of employment solicitors can assist in any employment law matter ranging from drafting employment agreements to giving termination advice and handling unfair dismissal applications.

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ENQUIRE

How to Avoid Disputes Between Business Owners

Most businesses have more than one owner. While there are many upsides to multiple business owners, a key downside risk is that the owners will pull the business in different directions and ultimately end up in a dispute.

This article provides some tips on aligning owners to work cooperatively to grow the business and avoid disputes.

Impact of a Dispute

Disputes between owners of a business can be very damaging to both the business and the owners personally. In our experience, a dispute between owners can cause:

1. A major distraction from business operations;
2. Damage to customer relationships and brand;
3. Significant family and personal stress;
4. A forced buyout of an owner; or
5. The wind up of the business.

Given the severity of the damage caused by director disputes, it is no surprise that all directors want to limit their exposure. However, often business owners leave it until a dispute has already arisen before seeking help from their legal and financial advisors. Once the dispute reaches this stage, the directors have already limited the course of action to resolve the dispute. This is why we recommend implementing strategies and having legal documents in place from the outset to align the owners and reduce the risk of having a dispute in the first place.

Strategies

The first step in arming yourself against a dispute is to be aware of some strategies to implement to reduce the risk of a dispute altogether. When starting a business, we recommend that you:

1. Identify and align your business: understand what each director is after and make sure they are consistent. For example, is the focus of the directors on maximising profit or being self-employed and take advantage of a work-life balance?
2. Clarify roles and responsibilities: understand what each director is responsible for (i.e. liaising with suppliers, being in control of the finances etc). Ensure that both directors understand their own responsibilities and what is involved in the other director’s duties.
3. Consider ‘what if’? You need to consider what happens in worst case scenarios such as who funds the business if the directors have no funds available to give, what happens if one owner wants to exit the business and what happens if the directors cannot agree on a decision regarding the management of the business. It is important when considering these options to ensure the appropriate legal document is prepared.

Legal Documents

Once the strategies are considered, the owners should document their decisions in binding legal documents to govern how to deal with the worst-case scenarios. At the outset, we recommend having:

1. A Shareholder Agreement or Partnership Agreement: governs the owners roles, rights, responsibilities, obligations and liabilities to the business;
2. A Loan Agreement: if the owners intend on loaning money to the business, it is imperative that any funds advanced are covered by a Loan Agreement. The Loan Agreement should include how much monies are to be advanced, the interest rate (if any) and when the monies are to be repaid. To strengthen the directors’ security for payment, it may also be appropriate to have a General Security Agreement which gives the director the status of a secured creditor (meaning they will have a better chance of being repaid should the business be put into liquidation);
3. A Business Exit Deed (or include this in the shareholder agreement): this will govern the procedure for a director to leave the business. It may include how the director will resign, the amount to be paid for the director’s shares in the business, whether the director is to stay in the business to hand-over work and what happens if a director passes away.

We recommend seeking legal advice to ensure the correct legal documents are prepared and enforceable. If you need assistance from a member of our team, please contact us on (03) 9481 2000 or info@tauruslawyers.com.au.

Posted by Taurus Legal Management