According to the Australian Bureau of Statistics there were more than 2.8 million trading businesses in June 2018, which is up 3.4% from the same time in 2017. There was also an increase of 15.8% of new businesses, up about .9% from the previous year. This is a good sign of economic growth, however, what these numbers don’t show is a business exit rate of just under 13%. That means that nearly as many new businesses failed as started.
Whether you have been contemplating starting a new business, buying into a franchise, or taking over a company the importance of a commercial lawyer can start your company off on the right path and impact the future success of your organisational structure, financial gains, and other legalese that impacts both new and established companies.
In its purest sense commercial law deals with issues that may arise from running a business often working with tort and contract law.
So, how can a commercial lawyer benefit you? Here are five reasons a commercial lawyer can be your company’s best friend.
Staying compliant with the Corporations Act 2001
Regardless of the size of your business, starting up takes time, patience, and often deals with a wealth of legal documents that are required to maintain compliance under the Corporations Act 2001. Think you can handle it yourself? The Corporations Act is nearly 300 pages of information covering everything from starting your business to meetings, shares, and transactions. It will also include current amendments. While it can be helpful to understand how your business should be run, it is a commercial lawyer who is versed in understanding the complexities of your business and how they relate to the Corporations Act 2001.
Starting a new business can be exciting, but can easily be bogged down trying to understand, draft, and review contracts and other legal documents such as your company’s constitution, employee agreements, business formation, and shareholder agreements. A commercial lawyer can help to ease much of your stress by handling the complexities most new business owners and even experienced ones don’t understand.
Act as your business bodyguard
On every new venture in life it’s important to have a safety net or bodyguard nearby to protect us from ourselves. After all, the saying goes, “It’s what you don’t know that you don’t know.” The goal of a commercial lawyer is to protect you and the interests of your company. That means they can stand by to advise you on how to run your business, invest your money, and stay legally compliant with the law. This can range anywhere from how you manage your product or service and the relevance to your clients as well as ensuring you provide your employees the fair rights they are guaranteed by law.
Having a commercial lawyer on your side helps to ensure you are making smart decisions to not only run your business, but also to see it grow.
Will help you grow through understanding
Growth is important in business, but without a clear understanding of your legal requirements you can find your business remaining stagnant or even part of that 13% of new businesses who exit the economy each year. While a commercial lawyer can handle the brunt of the legal requirements, a good lawyer will also help you to understand your rights and obligations under the law.
By understanding the legal grounds which you are bound by you can make better decisions when handling the inner workings of your business. It only takes one bad decision to throw your company into jeopardy. A commercial lawyer can take the complexities of the law and simplify them so that you are better equipped to manage hiring of new employees, disciplinary actions, data collection and retention, as well as compliance laws.
Manages litigation
We’d all love to go through life knowing that we will never encounter legal problems, however, most businesses at some point will encounter legal issues. For many small and large businesses that may mean you need to decide how you proceed through litigation. Both sides of litigation can impact your business whether you are trying to recoup losses from another entity, or another entity is coming at your company. Litigation can be expensive, time consuming, and in many ways changes how you run and organise your business.
A good commercial lawyer will offer advice on mediation as well as help you determine if litigation is the right course of action for you and your business. After all, often times litigation can be much more expensive than the losses you can recoup.
Commercial lawyers have foresight
Commercial lawyers have the foresight to help you prevent problems. This can be done by establishing the right path going forward, but also having the ability—foresight—to see potential headaches that can be avoided before they exist. By working with a commercial lawyer, you can avoid costly client, employee, and contractual mistakes before they happen. This not only saves you a lot of future problems but allows you to run your business instead of jumping from one complication to the next. You can’t exactly run a successful company if all you are doing is putting out fires.
In the end, a commercial lawyer plays many roles in establishing a new business from helping to form your business to acting as an advisor and in many ways your company’s bodyguard. By working with a commercial lawyer you can ensure that you stay legally compliant, are making smart decisions, and setting your business up for success.
LGM Advisors is a leading Melbourne law firm, with expert commercial lawyers. LGM Advisors have the skills, experience and expertise to ensure that you and your commercial law matter is consulted upon with the utmost professionalism. Contact LGM Advisors and speak to a commercial lawyer today on (03) 9832 0608 or by email at contact@lgmadvisors.com.au.
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