The common saying ‘you have to spend money to make money’ is no doubt true when it comes to business. Running a business entails many costs such as leasing a premises, equipment, insurance, wages for employees, tax and maintenance. Business Finance involves both how businesses spend and make money.
When businesses need to raise capital, business finance is categorised as being either debt or equity finance.
Debt finance is when a business borrows money to cover its costs. Some common examples of this include bank loans. An advantage of debt finance is that you maintain control of your business through not distributing ownership. However, business loans also have to be repaid and accrue interest over time.
Equity finance is where funding is provided to a business in exchange for an interest in the business. The most common type of equity finance is the issuing of shares to employees or other interested parties. This arrangement can be beneficial as the amount does not have to be paid back and there is no interest applicable. However, investors will share in the profits of the business and they will also have a say in business decisions.
Business finance is regulated by various key legislations, as well as code of conducts set by regulatory authorities. Key legislations include:
- Banking Act 1959 (Cth)
- Anti-Money Laundering and Counter Terrorism Financing Act 2006 (Cth)
- Bills of Exchange Act 1909 (Cth)
- Financial Transactions Reports Act 1988 (Cth).
Additionally, authorities such as Australian Prudential Regulation Authority (APRA), Australian Securities and Investment Commission (ASIC), Australian Competition and Consumer Commission and the Reserve Bank of Australia have been granted Statutory Authority to regulate the industry and prevent any ethical breaches.
What is a Business Finance Lawyer?
A business finance lawyer deals with the finances of a business, from maximising financial potential, through to dealing with finance related disputes. Lawyers that work in this field have expert knowledge in finance and account keeping. They work with businesses to ensure they are compliant with government and taxation standards. If there are any disputes with these agencies, they are available to represent you and negotiate a resolution. Besides this, they are experts in proposing ways to maximise finances. They also work with businesses that propose new products and are looking to raise capital with investors. They will manage these negotiations and ensure terms are appropriately formed.
Why do I need a Business Finance Lawyer?
If you run or manage a business, a lawyer with expertise in finance, in conjunction with an accountant, will be the best way to resolve financial disputes and ensure your books are running to their full potential. You will need to consult with a business finance lawyer if you find yourself in a unresolvable dispute with the Australian Taxation Office or if you find yourself with issues relating to super and other government requirements.
What will a Business Finance Lawyer provide?
Business finance lawyers will provide expert advice regarding your business’s obligations and capital raising options. They will adopt a straightforward approach to your matter to ensure your interests and rights are protected. When needed, they will work with an accountant to ensure your finances are correct and adopt the most reasonable approach to to gain a solution.
How Much Will A Business Finance Lawyer Charge?
Usually, Business Finance lawyers, and lawyers in general, charge either a fixed amount or an hourly rate. Also, fees are calculated based on the solicitor’s expertise, seniority, location and whether the work is urgent.
We work with Business Finance lawyers in our lawyer network who specialise in Business Finance and can provide assistance on a fixed-price basis. We make sure the price is transparent and affordable. There are no hidden costs and you have the option of choosing who you want to be your lawyer.
Hourly rates and Court fees
The cost of a Business Finance Lawyer will vary based on the scope of the work. Small issues likely to be addressed quickly will cost less. For matters that will need to go to the relevant Court or Tribunal, there may be additional fees involved, particularly as this work takes time. These types of matters may also involve obtaining documents and negotiating with the other party.
What can a Business Finance Lawyer legally charge?
Legal costs can rise very quickly, especially in litigation. However, this is sometimes hard to avoid when work is being done by a lawyer on an hourly basis. Where fixed-fees are not offered by the lawyer, you should expect to be invoiced on a monthly basis with a time period within which you are required to make payment. Lawyers are required to adhere to the rules outlined in the relevant acts. For example, in NSW and Victoria, this is the Legal Profession Uniform Law 2014. Lawyers who do not comply with these rules can face disciplinary action from the law society of their State.
Lawyers are required to provide to their clients a document called a ‘costs disclosure’ if your costs will be higher than $750.00. This document will outline how costs will be calculated in relation to your case. Also be mindful that costs are divided into ‘professional costs’ and ‘disbursements’, and you will be expected to pay for both. Professional costs are the costs of the actual work done by the lawyer, whilst disbursements cover incidentals such as court filing fees, telephone calls, photocopying charges – amongst other things.
What if I don’t agree with the costs?
You have the right to request an itemised bill that will outline how much time was spent on each task in relation to your matter, and how this adds up to the fee you’re requested to pay. If you wish to dispute the cost, you can make a complaint to the The Office of the Legal Services Commissioner (OLSC) and they will investigate the matter and may allocate a costs assessor. You can also take further legal action in the Courts if you feel you have been unfairly charged.