As a business owner, it is important to keep up to date with the legal responsibilities and obligations of the business. Here are 5 things that are often overlooked:

1. What happens in the event of your death or incapacity? Who pays the staff and keeps the company running?

If you are a sole trader, your attorney, nominated under your Enduring Power of Attorney, can make decisions on behalf of the business and continue operating the business during your incapacity.

If you run your business through a company, a company Power of Attorney needs to be executed appointing an individual who can act as director to ensure that your staff and debts are paid.

2. Does your shareholder’s agreement represent what you would like it to? Does it contain everything it needs to?

If a majority shareholder wants to sell, are the other shareholders forced to sell too?
What happens to the shares of an employee shareholder if they are terminated?
What decisions require what percentage of shareholder votes?

3. When was the last time you re-visited your employment agreements?

Do you have up-to-date employment agreements which reflect the current roles, remuneration and responsibilities of your employees?

Do you need to revisit the restraints of your employees if they leave? Restraints are considered as at the date that the employment is signed, and not at the day that an employee resigns.

4. What are your assets and what are the assets of the company or business?

A company is a separate legal entity to you.

Do you know what assets belong to the company and which assets belong to you?
Should ownership of certain assets be transferred to reflect the true ownership?

5. Do you know and understand your risk profile and that of your company or business?

If you are running a business as a sole trader, your family home, your car and other assets may be available to creditors of the business.

Operating your business through a company moves the risk associated with the business away from you personally and can protect the family home.

At Transitus Legal we offer business-tailored commercial advice and succession planning for directors and companies. Contact us for more information!