Business owners need to plan how they would like their business to continue once they cease to have an active role. The succession will have a far greater chance of success if it is properly planned and structured. The mix of business and relationships can complicate matters in a family business. To avoid unforeseen and unwelcome consequences it pays to get early legal advice.

Examinership is a process whereby the protection of the Court is sought to assist the survival of a Company. Once the company is placed into examinership a window is given during which creditors cannot seek repayment of outstanding debts from the company.

In Receivership the Receiver is granted the legal right to receive and dispose of property belonging to others for the benefit of a secured creditor. A Receiver and Manager has the additional power to manage and trade with the company’s charged assets.

In an ever more regulated business environment failure to observe the proper formalities or ensure compliance with a wide variety of regulations can have significant adverse consequences. The consequences can be both personal and corporate. Corporate governance has to be at the forefront of a business’s thinking.

Shareholders Agreements – Where individuals use a limited liability company as the vehicle for a business activity it is advisable to have a shareholders agreement in addition to the Constitution. A Shareholders Agreement regulates issues such as how the business is run, how key decisions are made, the financial commitments of the parties, the rights of families and exit strategies.

Joint Venture Agreements – “JV’s” are agreements between two or more parties on how they will collaborate in a common business project. The parties generally agree to share the profits and losses proportionate to their interests in the agreement.

Partnership Agreements – Such agreements regulate the way individuals or unincorporated companies work together. They cover much the same ground as shareholders agreements. One of the key differences between a partnership agreement and a shareholders agreement is in the area of responsibility for debts. With a partnership agreement, while the owners can decide how to allocate responsibility for debts between themselves, as far as the outside world is concerned, they are all fully liable for any liabilities the partnership may incur. This is not the case with a shareholders agreement. Here the parties own shares in the company operating the business not the business itself and it is the company which is responsible for the business debts.