Ensure that you have a Well-Structured Business Agreement in Place
Proper documentation and can detailed business contracts are extremely helpful when the business runs into trouble or when disputes arise. Seeking legal advice from experienced commercial lawyers right at the beginning of the process paves the way for efficient and methodical dispute resolution. Commercial dispute resolution often involves consideration of multiple factors such as documentation, consideration of rights and responsibilities of all parties and a sound knowledge of Australian commercial laws. Corporate lawyers are trained to examine various aspects of the problem and offer solutions that are legally valid.
It’s important to understand that everything that the business does by way of transactions should fall within the framework of the terms and conditions contained in the agreement. Poorly worded, vulnerable or legally invalid business agreements can put your business at risk and expose to increased risk of litigation. A detailed and comprehensive business contract helps reduce the likelihood of risks and liability and also provides for improved evaluation of the facts. In the absence of a business agreement, the facts are open to misinterpretation thus leading to subsequent confusion, delay and prolonged stress.
Disputes among business partners or shareholders could arise due to multiple reasons. Some common reasons include:
- A partner may disagree with the decisions made by other partners or feel that he or she was kept in the dark with regard to company information
- Company funds or monetary resources may be diverted to other business entities or individuals without knowledge of partners
- There could be differences of opinion over share distribution, pricing or selling especially in case of mergers
- A certain partner may have entered into loan arrangements that appears to be beneficial to specific partners or shareholders
There are several avenues for potential disputes in business. A contract helps to clearly state the terms and conditions as well as corresponding solutions for different scenarios. Since every partner has agreed to and signed the agreement, it becomes a useful reference point to initiate resolution procedures. If changes are to be incorporated into the agreement, this should also be done in a legally compatible manner with the consent of all concerned parties. This minimises the scope for misunderstanding and confusion at a later stage.
It may not always be possible to take logical decisions under stress and this is why it’s a better idea to hire a reliable lawyer to help resolve issues. A proactive approach will help safeguard the business from the negative effects of litigation and internal conflict. This can also help you enjoy better peace of mind as you can concentrate on the business without being obliged to waste your valuable time and energy.