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Writer's pictureManookian Solicitors

Understanding the legal requirements of running a business - Practical Considerations

Updated: Jun 16, 2020

1. Contract Drafting and Review

It is important that you have well drafted documents to avoid dispute and disappointment in the future. Our lawyers, at Manookian Solicitors regularly draft and review a wide range of commercial contracts, and can ensure your contracts secure your business’ safety and enterprise value and ensure businesses like yours are successful, sustainable and secure, and by creating strong and viable commercial contracts for you.

All commercial contracts, from management and consulting contracts through to supply and distribution contracts, contain certain terms that you must have a good understanding of before you sign. Some key terms that may appear on your contract include payment terms, ownership rights, security for payment including personal guarantees, division of intellectual property rights, protective covenants and restraints of trade. To ensure you are properly protected, these aspects must be fully understood and addressed.

Once you have entered into a contract, it is very difficult to negotiate or amend terms and conditions, so it is essential to get the legal contract correct from the beginning. Failure to do so may result in a poor relationship between commercial partners due to misunderstanding.

At Manookian Solicitors, we will work with you to ensure this does not happen. Our lawyers will carefully review your contracts to confirm that all essential elements are contained and that the terms reflect what was agreed upon between parties.

There can be very serious legal and financial ramifications if you do not fulfil your legal obligations under the contract you signed, so you should speak with a lawyer before entering into any legally binding agreement. Our skilled lawyers can draft and review a range of documents, including heads of agreement, partnership agreements, joint venture agreements, shareholder agreements, and many more. We will work with you to clarify the terms and obligations in your legal documentation to ensure minimise uncertainty and to minimise contract disputes.

2. Business Structures

Manookian Solicitors can give you practical advice on what business structure will best suit your current situation, and how it can adapt to suit future development. We will work to ensure the chosen structure maximises the potential and enterprise value of your business.

As there are many different forms of businesses, there are also various ways to structure a business. Our lawyers can advise you on the best business structure to suit your current commercial needs. We will also design a strategy to help you transition between structures as your business develops. We will assist you in relation to company registration, incorporation, shareholder agreements and work with your accountants and financial advisors on any taxation implications, making the process of setting up your business structure smooth and simple.

Our lawyers will sit down with you to discuss the operations and vision of your business, and help determine which business structure will be most appropriate for you. If you wish to manage a business independently, operating as a sole trader will be the simplest and best option. As a sole trader, you are the sole business owner, and you trade in your own name. As such, the ATO will count your revenue, and liabilities will be attached to your individual name.

If you engage in a partnership, you will have two or more people sharing a view of making profit. In this case, all responsibilities and liabilities are shared amongst partners according to the partnership agreement. In a partnership, you will typically need to register a business name.

A company is a separate legal entity, so it will have its own assets and liabilities. A company’s operations are controlled by its directors, and it is owned by shareholders. All companies need to be registered through ASIC (the Australian Securities and Investments Commission), and profits earned are taxed at the company tax rate (currently 30%, unless exemptions apply).

In some cases, it may be best to structure your business as a trust. A trust is a business structure in which a trustee operates the business. This trustee is responsible for holding income, property or assets for a group of beneficiaries. The principal aim of a trust is to reduce personal liability. Yearly administrative tasks are required, as is a formal deed, which can be quite expensive.

No matter what your plans are, and what the specific details of your business, our lawyers will help you adapt to the most suitable business structure, empowering you to achieve your goals and objectives.

3. Licensing and Distribution

Your brand needs to be effectively communicated and preserved when licensing it to a third party. Our legal team can help prepare licensing and distribution agreements that will develop successful business relationships and grow your business.

Licensing your product or brand interstate or overseas is a challenging process, requiring you to put trust in another party to preserve your brand and grow your business. You must be able to communicate your purpose, vision and style, and formulate a distribution agreement that is fair to both parties.

Manookian Solicitors specialises in franchising and distribution, and we have extensive experience in the area. Our proficient lawyers can offer tailored solutions to your business needs, assisting you in establishing national and international distribution networks and license arrangements. We will work with you to prepare customised distribution and supply agreements that reflect the unique commercial needs of your business. We can also assist in drafting and reviewing the other necessary documents that will allow your goods and services to be effectively licensed or distributed interstate or overseas. Expanding your business is an exciting venture, but you must be mindful of some important issues that need to be clarified to ensure best communication with your international or interstate markets.

We can assist you in resolving issues such as choice of law applying to the agreement, distinction between distribution or licence territories, delivery arrangements, product requirements, marketing, promotion and minimum performance criteria, to facilitate a successful relationship between you and your licensees or franchisees. Creating your licensing and distribution agreements in a clear and detailed manner will ensure you attract and retain licensees who are truly excited about your product or service offering, and will work according to your business plan.

If you are growing your business through a licensing or distribution network, our professional advice will help protect your expanding business.

4. Trade Marks

Your business is unique and needs to be set apart from the rest. Our lawyers can help you establish a registered trade mark to protect your brand from imitation and ensure the value of your products and brand assets are retained.

A trade mark is your brand’s identity. This distinct word or logo associated with your business enables you to communicate to your customers who you are and the unique services you offer. It distinguishes the goods and services of your business from those of others’, and provides protection from other businesses using a similar mark. A trade mark can be a distinct word, phrase, shape, logo – or even a colour, sound or smell.

Registering a business name is not enough to protect your brand. This allows you to conduct your business under a certain name or title, but does not grant exclusive rights beyond trading under that name or stop any third party from using the same name, logo or brand. To obtain these exclusive rights to commercially use, license or sell the business trade mark, and to protect from other similar users, you must formally register your trade mark through IP Australia. This is one of your business’ most valuable marketing tools, and will provide a competitive advantage over other traders.

A specialist trade mark lawyer should be consulted when establishing your business trade mark. We understand the vital need to protect your brand right from its inception. Manookian Solicitors have extensive experience in registering, protecting and enforcing trade-marks across a vast range of industries, both domestically and worldwide, via their network of affiliates.

Our trade mark lawyers will conduct a preliminary search to ensure your brand name or logo does not match a similar one already registered. If there is a conflicting trade mark already in existence, we will advise your best options to make changes to your own. Once successfully registered, your trade mark will be secure for 10 years. After this, it can be renewed indefinitely and is able to be sold to a buyer if you eventually sell your business. Your trade mark will become one of your most valuable assets. Speak to one of our trade mark lawyers today to register and secure your trade mark.

5. International Trade Mark Registration

Before you expand your business to foreign markets, your intellectual property needs to be secured through trade mark registration. Our lawyers are currently managing the international trade mark portfolios of clients in over 70 international jurisdictions, and they can assist you in this process.

When considering expansion of your business overseas, is it essential to ensure that your brand name, or trade mark, can be used in the countries you intend to trade in. Failure to do so could mean jeopardising an expensive investment. This can be a lengthy and difficult process, but our lawyers are skilled in working with international trade marks and can advise you on your options. To apply for an international trade mark, you can either file an application individually with each country, or to save time and money you can file an application with other countries using the Madrid Protocol.

The Madrid Protocol is one of two treaties that make up the Madrid System of international registration of trade marks. Essentially this system allows an international trade mark application to be lodged from one registration office in your own country, rather than applying to each individual country. This is a cost-effective way of ensuring protection of your trade mark in multiple countries through the filing of one application. In Australia, you will lodge your trade mark application through Intellectual Property Australia (IPA).

There are many benefits to lodging an international trade mark registration using the Madrid Protocol: your costs will be reduced, only one registration office needs to be dealt with, and subsequent management of the trade mark is simplified. The Madrid Protocol will also allow registration of your trade mark in several countries even if application in one country is unsuccessful. Your international registration is protected for a period of ten years from the date of registration, and can be renewed every ten years upon payment of the relevant fee.

Lodging an international trade mark application does not need to be a difficult process, however it is essential that you do this well in advance of your international expansion. Our experienced lawyers can help ensure your international trade marks are secured, and work with you through the application process.


if you would like to learn more about how Manookian Solicitors can be of assistance, we are happy to talk. Our initial meetings are an investment on our behalf. We take the time to assess your needs and determine an action plan to move forward together.

Contract Rostom Manookian on 0416 716 960 or email: rostom@manookiansolicitors.com

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