In general, buy-sell agreements require partners to agree to sell their interest in the company to the other partners if certain trigger events (such as death or TPD) happens and each partner must agree to purchase the outgoing partner’s interest.
Other issues that can be addressed in buy-sell agreements include how the value of the asset will be calculated, its transferring process, and how it will be supported.
If your buy/sell agreement is different from your partnership agreement or shareholders’ agreement, we advise using the same valuation approach in both to avoid encouraging a partner or shareholder to take advantage of the discrepancy to the harm of the other partners.
Each business partner must take out an insurance plan that covers their personal lives or future TPD. The benefits of the appropriate insurance policy are given to the departing partner’s specified beneficiary upon their TPD, and: –
- For a reasonable fee, the partner’s stake in the business is transferred to the other partners.
- The outgoing partner is obligated to make a payment to the other partners in the amount of the sum insured, which the surviving partners might use in whole or in part to buy the share of the departing partners.
We have observed our clients frequently use licensing contracts to protect their intellectual property while commercializing their idea. Licensing contracts allow IP owners to regulate, manage, and protect their intellectual property, as well as profit from it. Your licensing contract should be customized to your property’s specific needs. Every licensing agreement should take into account the scope of IP as well as the accompanying rights provided to the licensee.
A software license deal would be very different from a music licensing arrangement. One-time licenses, country-based, connected with a relevant business type, exclusive, and so on are all examples of licensing agreements. Trademarks, Patent, Copyright, registered designs, and trade secrets can all be used to provide licenses.
What does a conventional Licensing Agreement include?
A license agreement would typically cover the following:
- What exactly is the IP that is being licensed?
- The License’s Scope – How is the IP licensed?
- Exclusivity and Territory Clauses- Where will the IP be licensed?
- Term/Duration Clauses – For how long is the IP licensed?
- Restricted Uses – How may the IP not be used?
- Renewal Terms – Is it possible to renew the IP license?
- Fees – How and how much does the IP make money
- Transfer and Sublicense Rights- Is it possible to transfer or sublicense an IP license, and if so, how?
- Support Services, Training Procedures, and Testing – Does the licensor supply any of these to the licensee in relation to IP usage?
Note: – A simple Google search will turn up standard license agreement templates. However, these fundamental templates are constructed using vague, generalized, and ambiguous phrases and circumstances. You run the danger of the contract being unenforceable if you are using either of these templates.
At CMI Group, before we begin preparing the shareholders agreement, we ask our clients to examine a variety of concerns that may occur between shareholders, with the goal of them deciding on how these issues would be addressed in the agreement. Apart from highlighting the common difficulties, we have no role in this process.
There are a variety of concerns that can emerge between shareholders that should be addressed in any shareholders agreement. Here are a few examples: –
- The agreement can specify what happens if a shareholder passes away or becomes handicapped. These issues are frequently overlooked in shareholder agreements. For example, in appropriate circumstances, a well-considered and structured shareholders agreement can state that upon the death of a shareholder, their shares are acquired using the funds of a life insurance policy covering the dead shareholder’s lifetime. This structure avoids severe cash flow issues for the surviving owners and allows the deceased’s relatives to get adequate compensation for the shares soon.
- The shareholders’ rights in regard to appointing Directors might be detailed in the agreement. This includes any limitations on those rights, such as if the shareholding falls below a certain proportion. This clause may also include rules prohibiting shareholders from dismissing a Director selected by another shareholder.
- The agreement might detail the factors that lead to dividend payments to shareholders. This involves determining whether or not previous shareholder contributions must be reimbursed first. Before the company seeks new external money, this part can also include general terms that define any rights shareholders may have with relation to additional funding.
- An exit strategy can be detailed in the agreement. This includes what happens when a company is bought out, sold, or listed. It also explains what happens if a shareholder decides to leave the company.
- The transfer of shares is an important part of every shareholder agreement. It explains the rights and procedures for transferring shares between shareholders. This includes describing what happens if a shareholder no more wishes to participate in the company’s management.
Note: – A simple Google search will turn up standard shareholders’ agreement templates. However, these fundamental templates are constructed using vague, generalized, and ambiguous phrases and circumstances. You run the danger of the contract being unenforceable if you are using a few of these templates.
A partnership contract is a legally enforceable document that lays out a mutually agreed-upon commercial arrangement between two or more individuals or entities. This type of agreement formalizes the partners’ expectations and is best formed at the outset of the partnership, before a potential point of contention occurs. In fact, some people feel that putting together a partnership agreement is a terrific approach to gain a detailed understanding about what a partnership is in both a legal and practical sense.
The following are the most crucial parts of establishing a partnership contract, in order: –
- Agree on the terms in principle with your partners
- Have a lawyer prepare the partnership contract so that it represents the in principle agreement and is legal
- Execute the contract and complete all necessary transactions, such as life and TPD insurance coverage.
Note: – A simple Google search will turn up standard partnership agreement templates. However, these fundamental templates are constructed using vague, generalized, and ambiguous phrases and circumstances. You run the danger of the contract being unenforceable if you are using either of these templates.
If you’re a business owner in NSW looking to expand your business by starting a franchise or a prospective buyer of a franchise outlet, CMI Group can help you by conducting due diligence, drafting all necessary legal documents (franchise agreements, operations manuals, and so on), and providing expert legal advice so you can make informed business decisions. We recognize the demanding burden that comes with owning a small-to-medium business. There is so little time left to spend on growing your firm after dealing with personnel concerns, following with regulatory regulations, and maintaining sound financial processes that taking that first step can feel unattainable. Our franchising team can assist you with this.
At CMI Group, our team of franchise lawyers can assist you in various ways with your Franchise.
- We prepare all necessary paperwork for you to license your business. This comprises franchise agreements, disclosure documents, and franchisee heads of contract, operations manuals, employment contracts, commercial lease agreements, and any other ancillary documentation.
- Existing franchise documentation is reviewed and improved.
- We provide guidance on the initial establishment of franchise systems, including the framework of the franchise.
- We deal with all aspects of business leasing (lease agreements, negotiation, etc).
- In the fields of mediation and negotiation, we provide general legal assistance.
- We make absolutely sure your intellectual property is safe and secure.
- We handle franchise system sales, purchases, and restructuring.
What are the benefits of having a lawyer drafting your franchise documents?
While it is undeniable that the franchising industry is growing in Australia, it is also crucial to note the percentage of franchises that fail because parties involved did not get competent legal advice at the outset and did not have ongoing legal help.
Our goal is to help your company grow by providing a productive and motivated workforce. If properly managed, employees are your most important, productive, and satisfying asset; if not, they are a source of tremendous pain. Our Employment Lawyers can assist you in ensuring that you have the right people and performance management practices in place so that you can focus on operational priorities and profitability rather than dealing with time-consuming employee issues or being frustrated by unmotivated employees.
Our Employment Lawyers can:-
- Review or create Position Descriptions
- Improve your ability to choose and keep the right personnel by implementing an effective recruitment process.
At CMI Group, we assist our clients to develop long-term employment strategies that consider workplace culture, commercial outcomes, and the need to maintain constructive and helpful connections in order to obtain the best industrial and employment relationships. Employee turnover and mobility affect every firm, and risk exposure is higher than it has ever been, according to our team. We think that controlling this risk entails making the right decisions at the right time at each and every phase of the employment contract, from first interview and contract negotiations through managing performance and terminating a contract.
Before we begin preparing the joint venture agreement, we ask our clients to think about a variety of difficulties that might emerge between the partners. This is done to make it easier for the parties to agree on how these concerns will be handled in the joint venture agreement. Apart from highlighting the common difficulties, we have no role in this process. We prepare a first draught of the joint venture agreement when the parties agree on the topics to be addressed in the joint venture agreement and how they will be addressed. This is usually followed by some tooing and froing between the lawyers of the parties until the fine print is agreed upon.
In order to achieve a positive outcome, joint ventures always include some risk (profit). Such a result can take years to achieve and involves a lot of continual input (financial, time, etc.) from all parties involved.
Each partner in a cross ownership arrangement takes out insurance or policies on the other partners. The other partners are usually the beneficiaries, and the profits from the insurance policy are used to buy the outgoing partner’s shareholding in full or in part.
The lease of business property is referred to as a commercial lease. This comprises office, industrial units, workshops and warehouses, retail stores, storage sheds, working yards, and other non-residential property.
Before signing a contract, you should always get legal advice, particularly if you are unfamiliar with any terms or do not fully comprehend the agreement. It is preferable to understand what you are signing up for up front so that you are informed of your rights and responsibilities from the start and throughout the Contract, as well as to reduce the likelihood of a future contract dispute. Our lawyers at CMI Group can advise you on contract terms and conditions, suggest revisions to the contract terms to best protect your interests, and, if necessary, negotiate such amendments on your behalf.
In the event of a contract breach, our team of lawyers can assist you in determining your options, whether by trying to negotiate a resolution on your behalf, representing you in any alternative dispute resolution process that the parties may choose to participate in, or initiating legal proceedings on your behalf to implement a contract or seek compensation for the breach of contract.