Commercial Law for Business Owners

Kallan Lawyers acts for business owners, companies, trustees, partnerships, lenders and borrowers on the agreements that hold a business together. We draft, we review, and we negotiate. Where a document is already signed and the relationship has broken down, we advise on what it means and what can be done.

Our principal has a background in accounting and taxation as well as law, which matters more in commercial work than it might appear. The structure of a transaction, the entity that enters it, and the way consideration is characterised usually have tax consequences that outlast the negotiation.

What we are usually asked to do

• Review a document someone else prepared, before it is signed, and say what to change and what to accept.
• Draft an agreement for a transaction or relationship that has so far been run on trust and email.
• Document money that has moved between family members, related entities or a business and its owners.
• Set the terms between owners, through shareholders or partnership agreements, including what happens when one wants out.
• Buy or sell a business, and deal with what is actually being transferred.
• Take or give security, and register it so that it survives the other party's insolvency.

The recurring problems

Across commercial work, the same few failures account for most of the damage:

• Nothing in writing. Arrangements between family members and related entities are the worst offenders, and the least defensible when a dispute, a divorce, an audit or an insolvency arrives.
• Security that was never registered. A security interest in personal property that is not registered on the Personal Property Securities Register can be lost entirely if the grantor becomes insolvent, leaving a secured lender as an unsecured creditor.
• Guarantees nobody tracked. Owners routinely guarantee leases, facilities and supply accounts, then exit the business without being released.
• Documents that contradict each other. A shareholders agreement, a company constitution, a trust deed and a will that each assume something different about what happens on a death or an exit.
• The wrong entity signing. An agreement entered into by a trustee without reference to the trust, or by a company that does not own the asset, creates problems that surface years later.

Most commercial disputes we see are not about the meaning of a clause. They are about something the parties never wrote down.

Loans are not one thing

We treat lending work in two separate streams, because the client need is genuinely different. A commercial or private loan is about the lender being repaid: interest, term, default, security and enforcement. A Division 7A loan agreement is about avoiding a deemed dividend where a private company has advanced money to a shareholder or associate, and is driven by the tax rules rather than by credit risk. Advice that conflates the two tends to produce a document that serves neither purpose.

Working with your accountant

Where a transaction has a tax dimension, and most do, we would rather agree the position with your accountant before the document is drafted than have it queried afterwards. That applies particularly to business sales, restructures, related-party loans and anything involving a trust.

This page is general information about the kinds of matters we advise on. It is not legal advice, and your own documents and circumstances will change the answer.