Do you have a brilliant business plan in mind? Have you been considering to set up a business in Perth? If so, there are a few things which call for your attention right away!
The Right Procedure to be followed
Setting up a successful business today is much more than having an innovative idea. Even before you have settled down in your businesses, a number of paper works need to be done which includes the term and conditions for your employees and clients so that no dispute may arise later. Even if some minor dispute does arise later, if your paper works have been done correctly, you are sure to be on the winning side. However, the legal formalities that need to be fulfilled are works of no amateur. They require both knowledge and expertise which you can find only with the best commercial lawyers in Perth
What is the Structure Of your Business?
Another very important aspect that any business- be it large or small scale- has to consider is the structure of the business. It is an important decision that leaves a long term effect on all your business policies. If you consider setting up a new business or expanding your old business with another person it is taken as a partnership. The partnership brings in major changes including that of taxes you owe, profit and losses and the level of control you have over your company. If this is the structure of your business it becomes all the more important for you to get in touch with commercial lawyers Perth who can assist you in framing your partnership agreement.
What does a partnership Contract Contain?
A partnership contract is an agreement that sets out the business relation between two or more people who own a business together. It enlists the terms and conditions of the contract and defends them should any partner willingly or unwillingly breaks the term of the contract.
An Australian Business Number (ABN) is also entitled to the partnership as long as it comes under the definition of partnership under the GST Act.
However, there are no hard and fast rules that compel you to have a legal agreement for your partnership. Many may simply choose to have merely a verbal agreement. But with years of expertise, legal firms always recommend that it is safest to have a written Partnership Contract.
Why do you need a Partnership Contract in Writing?
It is only natural that when two people work together, there are inevitably going to be some situations when your opinions do not match and it may not be always possible to reach a reasonable conclusion just through discussions. At those times your partnership contract becomes your tool of negotiation. A well-framed partnership contains all the terms related to each partner’s role, liabilities and profit distribution. At times a partner may also want to withdraw from the business. Even at those times, it becomes extremely important to have a Partnership Contract in place. It is also very important to have the name of your business and its role properly explained in your contract.
Forms Of Partnership Contract
General Partnership Contract: The general partnerships are businesses shared equally by all partners. Thus each partner has an equal share in profit and loss. They also share equal responsibility in managing the business and taking major decisions.
Though general partnership may sound rather uncomplicated they also include a number of other details such as exit strategy for small businesses, responsibilities of respective partners and conflict resolution steps, which can be skilfully set out by your commercial agreement lawyer.
Limited Partnership Contract: In modern businesses partners don’t always play equal roles. At such times a limited partnership contract is made. However, there has to be at least one general partner and one limited partner in such type of contract. The business risk is entirely assumed by the general partner while the limited partner is liable to nothing beyond whatever amount he may have invested.
In limited partnership contracts, the power to take all the major decisions lies with the general partner who manages all the day to day affairs of the company. The role of the limited partner ends only with investing money.
In case of the limited partnership, a written document enlisting all your partner’s details and role must be carefully put down as its crucial at the times of conflict resolution.
The Different elements in a Partnership Agreement
Your Partnership Agreement Includes:
Your entire partnership details, including the names of the partner, the capital contributions of each individual and the entire description of how profit and losses are shared between the partners.
The terms and conditions of the partnership, the rights, and obligations of the partnership including the terms of withdrawal, partnership dissolution details and the like.
The accounting details and the terms of compensation for each partner.
The terms of management of the business, including the person who is in charge of maintaining the day to day affairs of the business.
It is very important to have the signing details in place. The signing details include the date the agreement is to be signed and at times it may also require a number of witnesses and their signatures.
You may also ask your lawyer to specify other details regarding the administrative decisions. They may include terms such as who will be involved in hiring or firing your employees, who shall maintain the accounts and who shall be responsible for signing checks and sanctioning salary.
Words of Caution
However, a very significant fact that has to be kept in mind is that each of the states and territories of Australia has their own specific Partnership Act and unless the provisions are differentiated or negated, can lead you to a number of problems.
This is why it is advisable that if you are planning to have a partnership in Perth, you must look for law firms and franchise agreement lawyers who are specifically acquainted with the laws of Perth. They will not just help you in framing your contract step by step, they will make sure that your contract is flawless and will save you from any harassment in the future.
So get one step closer to setting your business by getting in touch with the best law firms in Perth.