Volume 28 - MARCH 2009

Welcome, to the revamped eZine. 

Don't forget to join the Law & Disorder Group on Facebook where you can have your say on these issues and network with other readers.

If you are on the Sunshine Coast join me on March 19th at the Business Referral Club breakfast in Buderim to hear international motivational speaker Kurek Ashley.  Details below.

The enemy within: Your business partner

Your bookkeeper and accountant have worked on the figures and they reveal two things.   First, your business is in bad shape and secondly, it is all your partner’s fault.  You knew it and so did your spouse. 

You are fully liable for every wrong move he (or possibly “she”) makes on behalf of the partnership.  If you get sued a creditor can claim all the money from your assets and then it is up to you to get the money out of your partner.  Not an easy task.

If your partner goes bust three things may happen:

1. You will pay all the debts of the business not just half.
2. His trustee in bankruptcy may recall any loans that he had made to finance the partnership.  You will need to come up with the cash to replace his share.
3. If you took out a joint bank loan to finance the business the bank could recall its loan as your partner’s bankruptcy is probably a breach of the loan agreement. 

Here are three ways to protect yourself from your own partner:

1. Have a partnership agreement which can anticipate some of the problems.
2. Each partner should try to take out a separate loan to cover its share of the business because if your partner defaults on payment of a joint loan you are liable for the lot.  Avoid guarantees especially joint guarantees.
3. Any money lent by your family should have the benefit of a loan agreement.

If you are in an established partnership your business finances may be so intertwined it may be difficult to get rid of him but be aware of the pitfalls.

Getting rid of a useless, underperforming partner is one positive, feelgood thing that you can do in a down turn because to keep them on can be a liability.

Paul Brennan is a practicing Queensland lawyer and author of the “10 Greatest Legal Mistakes in Business…and how to avoid them”. 

If you have a partner you wish to discuss click here

Loan agreement protection

At some time over the last few hundred years debtors changed their strategy from “blowing their brains out” to not returning telephone calls.

Your lawyer will actively discourage you from lending money but, if you are pushed into a corner then have some sort of loan agreement as the debtor may die, go broke, get divorced or have a memory lapse.  

A loan agreement can simply say “IOU $X” and be signed by the debtor.  This identifies the amount and has the debtor confirm that the money is owing.

The next step up, is a post dated cheque or cheques by the debtor in your favour.  A cheque sets a date for repayment.  You can “sue on the cheque” meaning it is a lay down hand and you do not need to prove that the money is owed. 

So what can a loan agreement drafted by your lawyer really add apart from legal cost? Well, there is a big difference in practice between proving that the money is owed and getting repaid as any banker will tell you. 

A loan agreement can:

1. Not only set an interest rate but a default interest rate to encourage the debtor not to hang onto the money.
2. Secure the loan against real estate or a personal guarantee from another.
3. Ensure the case is heard in your local court as debtors seem to regularly hit the road.
4. Pay your legal fees if the debtor defaults and you need to instruct a lawyer.
5. Provide it is the entire agreement and can only be amended in writing to stop the debtor moving the goalposts.                   

The best thing about a loan agreement is that you can push the boat out as the debtor pays for your lawyer to draft it.

© Paul Brennan.  For more articles like this see Paul's eBook

Click here for information about "Unleashing the Dogs of Law - How to win or lose your dispute in the bad times"

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How to fight your own battles

Other people upset you.  One day you realize that the real problem is that some people will not surrender to your charm offensive and behave in the way that you think they should, even if it is for their own good.

You have tried standing up for yourself but win or lose you just don’t enjoy it as much as people toeing your line voluntarily.

The answer is to stand up for someone else.  Fighting other people’s battles is far easier.  For example, the risk of losing money is quite bearable when it is not your money, as is the risk of physical harm.  In fact, you will find yourself being quite aggressive and even brave on their account. 

Being released from their own commitments they may want to fight your battles.  This is where your problem really begins as you do not want these potential champions, to mess it up.  Therefore, fighting everybody’s battles is a mistake.  You must pick and choose carefully, by assessing the fighting capabilities of potential champions which can be divided into three categories: physical, verbal or just not speaking to people and causing an atmosphere.  It is best to have some champions in each category.

Next you will need to carefully analyse your opponents.  Some opponents think that by making other people unhappy it makes them feel better, maybe it does. But, to get maximum enjoyment they must stick to their own area of expertise in order to reduce the risk of losing.  For instance, the opponent who creates atmospheres is supreme in many work and family situations but is understandably afraid of a person who will beat them up for doing it.  They will even avoid anyone who might shout at them.    Whereas, you are a good loser, opponents are generally bad losers and therefore, must spend a lot of time working out who to pick on.

But, what happens if the person who you are fighting on someone else’s behalf makes it personal against you and you start to experience all the pain of fighting your own battles?  In that case, you immediately hand it over.  With the right champion you can even have them beaten up as an example to other opponents who want to step out of line.  This works particularly well in the case of family members or work colleagues.

Once, you have a stable of champions you will be tempted to revisit old scores, the older you get the better the element of surprise.  Resist it.

Extract from Suffering 101 © Paul Brennan

Need a speaker for your event click here

Event

Come and hear International peak performance coach and motivational speaker Kurek Ashley speak on:

"How to remain positive and move your business forward".

• 
  - Discover how important it is to remain positive in challenging times.
  - Learn some simple techniques to help you feel great and be positive everyday.
  - Understand why this is so important for you, your staff and your customers.
  - Leave with some great tools to help you get more...
  
  
  

"Bring plenty of business cards.  It will be fun and great for your business.  It may even cheer you up " MC, Paul Brennan.

Book early to avoid disappointment.

Date: Thursday 19 March 2009 Time: 7am for 7.15 - 9am
Venue: Headland Park Golf Club, Golf Links Rd Buderim
Cost: $35 (including full buffet breakfast) RSVP: Friday 13 March 2009

click here to download the Kurek Ashley Event registration form.  If you require more information call the secretary Graham McIntyre on 5491 1422 or email at Graham@wardlepartners.com.

The weekly breakfast meeting at the Business Referral Club helps you grow your business.  It is cost effective and fun.  Come along and see.