Not even a wet and stormy Wednesday morning could deter entrepreneurs and business owners coming in from all over Sydney to attend Aeona’s inaugural ‘Wednesdays at Aeona’ seminar.
Our ambition with this weekly initiative is to extend our support of the Sydney Startup community by providing speakers with specialised industry expertise to keep founders up to date with developing trends and general advice in their area of expertise.
Apart from being an educational experience, the other key aim of Wednesday’s at Aeona is to
Bring Sydney’s Entrepreneurs and Start-up community together
To network and create valuable business connections with peers – all over a hearty breakfast of course!
Topic 1: Co-ownership agreements: The Secret to a Healthy Business Partnership
Presented By – Doron Shmilovits – Director at SLG Lawyers
Yesterday’s event featured a to-the-point yet incredibly useful seminar by Doron Shmilovits, a commercial lawyer and Director at Sydney law firm SLG Lawyers.
Mr Shmilovits used this opportunity to talk about an issue he saw as being vital to founders who are heavily involved in small businesses that surprisingly isn’t covered as much as it should be.
Pulling no punches, Mr. Shmilovits first explained that usually when you have a lawyer in the room, you know something has gone terribly wrong – and that you’ve exhausted all of your other options.
Mr. Shmilovits started out by advising that, it’s better to be proactive and engage a lawyer to write up a co-ownership agreement at the beginning of a business relationship, than to be reactive and leave it until you have a disagreements with your business partner before bringing in a lawyer.
Mr Shmilovits made the point that bringing in a lawyer down the line will, unfortunately, be an expensive proposition with average legal fees from these cases approaching one-hundred thousand dollars in incurred expenses.
“Think of a Co-Owner Agreement as a Pre-Nup for business – everyone needs one.”
An interesting point Mr. Shmilovits brought up was that like married couples, business partners also have a ‘honeymoon’ phase where everything can be seemingly peachy. It is at this point business owners really need to ask the hard questions like ‘what happens to our share in the company if one of us were to become incapacitated (ie. mental illness) or if death were to occur?’
It is at this point business owners really need to ask the hard questions like ‘what happens to our share in the company if one of us were to become incapacitated or if death were to occur?’
Mr. Shmilovits continued on by citing four key areas that Co-Owner Agreements tend to focus on, which were:
- Board of Directors
This is all about having the power to appoint your own director while ideally trying to prevent passive investors from having the right to appoint their own directors.
- Dealing with Shares
The ‘right of first refusal’ which protects you from strangers coming into your business as well as what rights apply when big offers come from outside, for example, to buy out your company. This also includes the special clauses to protect you in the event a shareholder becomes insolvent, suffers an accident or dies.
This also includes the special clauses to protect you in the event a shareholder becomes insolvent, suffers an accident or dies.
- Capitalisation and Funding
Clear guidelines need to be set in the event of your business running out of capital; how will money be raised?
- Dispute Resolution
A mechanism needs to exist in case of a gridlock between shareholders. This may involve shareholders undergoing mediation, a third party decision or shareholders can also buy others out.
This information provided the bulk of the seminar and after a few questions from the audience everyone enjoyed a hearty breakfast spread and had a chance to have a chat with each other – so much in fact that the event went well over time!
All in all, talking to a few of the attendees and the team at Aeona, everyone thought that today’s event was a success – a great benchmark for a new weekly series.
If you think you would be interested in attending a Wednesday’s at Aeona seminar then check out our events page, we’re constantly adding new events and opportunities for people in the Startup space to not only get ahead of the pack but stay ahead.
We hope to see you for next week’s Wednesday’s at Aeona – presented by Joven Demontverde, a Principal Accountant at Accounts Maven who will be talking about Strategic Entity Choice for entrepreneurs looking to start a business.