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Singapore Estate Planning Made Easy

estate planning
singapore estate planning made easy

Estate Planning in Singapore

Estate planning is a necessary process that everyone should go through.

It can be easy to put off, but it’s essential to have a plan in place in case something happens to you. Taking the time to plan your estate now can save your loved ones a lot of heartache and stress later.

If you need a Will or need to update your estate planning documents, now is the time to take action.

Use this checklist to start estate planning or review your current plans.

1. Will

Make a Will – This is the most important estate planning document because it ensures your wishes are carried out and your loved ones are provided for.

    • Without a Will, the law will distribute your assets, which may not be your wish.
    • Without a Will, your loved ones may have to go to court to resolve disputes over your assets, which is expensive and time-consuming. Therefore, it is vital to take the time to create a Will that accurately reflects your wishes.

People often write their own Wills. Even though you can do it without a lawyer, working with an experienced one is  strongly recommended. A lawyer will ensure that your papers are foolproof and protect you and your family from long court probates.

Choosing an executor – An executor is responsible for managing the distribution of assets in an estate. The executor doesn’t have to be a lawyer. Your children, a family member, or a close friend can all take on this role. Once you’ve chosen an executor, you should introduce them to your lawyer, even if they won’t have to work together for years or decades. And remember that you can always change who will carry out your wishes.

Naming your beneficiaries – It is essential to name who will get your assets. It would be best to designate a beneficiary for every asset you own. This ensures that your assets will be distributed according to your wishes in the event of your death.

 

2. Lasting Power of Attorney

A Lasting Power of Attorney (LPA) is a legal document that appoints a trusted third party to decide on your behalf if you become incapacitated.

When people lose their mental capacity, they can no longer make their own decisions and must rely on others. This situation can be challenging for both the individual and their loved ones.

Without an LPA, your family must file a court petition to gain access to and control of your assets and finances. However, the court application process can be costly and time-consuming, and there is no assurance that the court will grant your family members control.

By executing an LPA, you can ensure that your wishes are carried out swiftly and efficiently if you become incapable.

3. Advance Medical Directive

It’s essential to ensure that family members and friends know your medical treatment wishes before a healthcare crisis takes these decisions out of your hands.

An Advance Medical Directive (AMD),a Living Will, is a legal document you sign when you are  mentally competent. This document expresses your wishes to the medical team treating you, regarding the use of extraordinary life-sustaining treatments when you are terminally ill, mentally incompetent or unconscious. By signing this document, you are giving your medical team the authority to make decisions about your care based on your expressed wishes. This can be a valuable tool in ensuring your wishes are followed if you cannot communicate them yourself.

Making an AMD is entirely optional, and you can revoke the AMD at any time.

It is essential to understand the difference between an AMD and euthanasia. Euthanasia is the deliberate ending of the life of a person suffering from an incurable and painful disease. An AMD instructs your doctor not to proceed with extraordinary life-sustaining treatment and allows you to die naturally when you become terminally ill and unconscious while minimising suffering through palliative care and medication.

 

4. Creating A “Need to Know” File

Once you’ve made these critical decisions, it’s important to communicate them to those who will be most impacted.

By creating a comprehensive “Need to Know” file, you can make it easy for them to access the information they need to carry out your wishes.

Your “Need to Know” should include your wishes for medical care, funeral arrangements, and other vital instructions.

It is essential to keep this file current, as your wishes may change over time. Making these decisions in advance can help ease the burden on your loved ones during a difficult time.

It also helps ensure that your wishes are carried out precisely as you desire.

 

 

FINAL TIP: Your estate plan must evolve because your life circumstances are ever-evolving. Your Will and estate plan should be reviewed once every 3 to 5 years or whenever a major life change, like marriage or purchasing a property.

Speak to us over video consultation via Lawyer Anywhere for advice on your Estate Planning matters today!

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5 Secrets To Buying A Business

buying a business
secrets to buying a business

Secrets to Successful Business Acquisition

When looking to buy a business, you must know what you’re getting into.

Buying a business is exciting but can also be a minefield without the right advice.

That’s why we’ve compiled this list of 5 secrets to buying a business.

1. Buy What You Know

  • It’s always best to “Buy What You Know”.
  • This does not mean you need to know every single detail about the business. At the very least, you should understand the principles of the business you are buying. Looking at an industry you know and understand is the best place to start.
  • Next, make sure the business you’re interested in is something you’re capable of running.
  • Finally, don’t forget to factor in your skillset and experience – you don’t want to jump into a business that’s too challenging.

2. Do Your Homework

  • Starting a business can be a gratifying experience, but you must be upfront and honest with yourself; you’ve got much homework!
  • A few things to consider before purchasing: What is the business worth? What are the current financials? What is the company’s history? What are the potential risks and rewards? How well do you know the industry? How much money do you have to invest?
  • Representations made by the seller may not always be accurate, so you must verify those details on your own.

3. Get Your Finances Ready

  • Having your finances in order is essential before buying a business. Unfortunately, many people mistakenly believe that the business is the only asset they must worry about. The reality is that the business is just one piece of the puzzle.
  • If you’re looking to buy a business, it’s essential to ensure you’re financially ready. Financing a business can be tricky, so start by organising your finances. Calculate how much money you’ll need to cover the purchase price and monthly expenses, and save as much as possible.
  • When it comes to financing your business, you can take out a loan from a bank. Consider less traditional sources of finance, such as angel investors or venture capitalists. Friends, family, and fools may be potential sources of capital. These sources should be approached cautiously, as they may have ulterior motives or need to be made aware of the full extent of the investment.

4. Seek Professional Help

  • If you buying a business, make sure you have your “acquisition team” – your banker, accountant, and lawyer – to help you.
  • Your acquisition team is an absolute must to assist you in completing the necessary checks and verification. Once these checks and verification have been carried out, you will know precisely what you are buying and from whom you are buying.

5. Negotiate & Bargain

  • When buying a business, one must be aware of the dangers involved.
  • The critical consideration is to figure out what the business is worth.
  • It is essential to get a reasonable business valuation when considering buying it. Still, you should also be aware of the potential dangers involved in doing so.
  • Always figure out what the business is worth, and do not rely solely on the books of account to give you an accurate picture.

FINAL TIP: Always remember, if something doesn’t smell right, no matter how many months you’ve put into the process or how much you want the business, you should not go through with the deal. If everything goes well, your lawyer can help you finalise and sign the sale agreement; the company is legally yours.

Are you looking to buy a business? We offer consultations so that you can get the help you need.  We will walk you through the process and answer any questions you may have. Contact us today to get started.

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Singapore Residential Stamp Duty

stamp duty
stamp duty

Simplify & Navigate Singapore Stamp Duty

Whenever there is a change of ownership of residential property in Singapore, the transaction must be taxed.  These taxes payable are known as Singapore Residential Stamp Duty. 

The Singapore Residential Stamp Duty (stamp duty) that must be paid are as follows: 

(1) a Buyer’s Stamp Duty (BSD); and 

(2) Additional Buyer’s Stamp Duty, if applicable (ABSD).

What is Buyer's Stamp Duty (BSD) & How Much Is It?

Buyer’s Stamp Duty (BSD) must be paid when transferring or buying Singapore real estate. BSD is based on the purchase price or market value (the higher amount).

Buyer’s Stamp Duty (BSD) Rates (for transactions after 20 Feb 2018)

Purchase Price or Market Value of Property

BSD for Residential Property

First $180,000

1%

Next $180,000

2%

Next $640,000

3%

Remaining amount (above S$ 1 million)

4%

As you can see, the Buyer’s Stamp Duty (BSD) is taxed at a different rate depending on how much the home cost to buy or how much it is worth on the market. So, people who can afford more expensive homes will pay a higher BSD, while people who buy cheaper houses will pay less.

Illustration

  • If we purchase a home worth $500,000, the BSD payable is $9,600.
  • If we purchase a home worth $2 million, the BSD payable is $64,600.

What Is Additional Buyer’s Stamp Duty (ABSD) & How Much Is It?

Additional Buyer’s Stamp Duty (ABSD) was part of a series of cooling measures implemented by the Monetary Authority of Singapore to limit speculative demand for residential properties in Singapore.

Since its introduction, the Additional Buyer’s Stamp Duty (ABSD) has undergone multiple revisions, and the Monetary Authority of Singapore has maintained that there are no intentions to relax property cooling measures.  The latest revisions were announced on 8 May 2022.

The buyer’s profile at the time of the purchase of the residential property will determine whether ABSD is payable, and if so, the amount of ABSD that must be paid.

Additional Buyer’s Stamp Duty (ABSD) must be paid in addition to the existing Buyer’s Stamp Duty (BSD) by applicable buyers.

Additional Buyer’s Stamp Duty (ABSD) Rates (for transactions after 9 May 2022)

Buyer Profile

ABSD Rate 

SC–1st residential property

N.A.

SC–2nd residential property

17%

SC–3rd & subsequent residential property

25%

SPRs–1st residential property

5%

SPRs–2nd residential property

25%

SPRs–3rd & subsequent residential property

30%

Foreigners–any residential property

30%

Entities buying any residential property

35%

While the BSD is based on a percentage of the property’s selling price, the ABSD is fixed. The amount we must pay varies according to our nationality (whether we are Singaporeans, PRs, or foreigners) and the number of properties we own, as shown in the table.

Singaporeans must pay an ABSD of 17% when buying a second residential property.

Illustration

If we want to buy a second home that costs $2 million, we must pay:

BSD + ABSD = $64,600 + $340,000 = $404,600

 

Count of Residential Properties Owned

(A) Count from the Date of the Sale and Purchase Agreement

If the Option to Purchase has been exercised, it should be counted as one of the buyer’s properties as of the day he exercised the Option, even if the property has not yet been legally transferred to him.

This includes purchasing a unit from the developer before its completion if the Sale and Purchase Agreement has been executed.

Similarly, the property should not be regarded as one of the buyer’s properties if the new buyer has exercised his Option to Purchase.

 

(B) Partial / Joint Ownership

Ownership of any interest in a property is counted as part of a buyer’s total property holdings.

Illustration

  • John jointly owns a property with his wife – Count 1.
  • John owns a property with his brother, percentage ownership 30% – 70% – Count 2.
  • The number of properties owned by John is 2.

 

(C) Multiple Properties in a Single Transaction

Many residential properties can be purchased under one contract. However, each residential property will be counted as its own.

 

(D) HDB Shop with Living Quarters 

HDB shops with living quarters or shophouses with residential use will be included as a residential property count.

 

(E) Residential Properties Not in Singapore 

All residential properties not located in Singapore will not be included in the count of residential properties owned.

 

When Must BSD & ABSD Be Paid?

If the BSD applies to you, the ABSD must be paid within 14 days from the exercise of the Option to Purchase or the date the Sale & Purchase Agreement is signed.

 

What About Inherited Properties?

IRAS has clarified that BSD and ABSD are not payable on properties acquired by inheritance. However, such properties are included in the property count if further residential property purchases are made.

We offer video consultation via Lawyer Anywhere so that you can get the help you need. We can walk you through the process and answer any questions you may have. Contact us today to get started!

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Memorandum of Understanding (MOU) & What They Achieve : The Ultimate Guide for Beginners

MOU
MOU

MOU : The Ultimate Guide for Beginners

Hey, What Happened? Didn’t We Sign the Memorandum of Understanding?

After many months of due diligence and engaging in rigorous negotiation, you finally “ink” a contract with your business partner.

You are sitting in your favourite coffee shop enjoying a cup of latte while daydreaming about the brand-new Ferrari that you are going to be able to buy now that your company is thriving. Then suddenly, you get an email that says the deal is off.

So, your fantasy of a lovely Ferrari dissipates as quickly as the coffee in your cup.

Your first thought is, “How can they do that? We have signed the MOU!”

You have obeyed the cardinal “Getting It In Writing” rule and assumed the deal is sealed.

Can you still be left high and dry by the dishonourable reneging party with no legal recourse?

Very often in the business world, legalistic sounding papers like “Memorandum of Understanding” and “Letter of Intent”  are bandied about. But are these documents worth the paper they are printed on? What are the consequences if one party breaches the “Memorandum of Understanding” and “Letter of Intent”?

In many cases, the answer is not much. While a breach of a contract typically results in a lawsuit and the awarding of damages to the innocent party, a breach of a MOU or LOI usually does not. This is because the documents are not legally binding. They are like letters of intent, non-binding agreements to negotiate in good faith.

What Exactly Is A “Memorandum of Understanding”?

  • An MOU is typically used early in negotiations for an intended business transaction between parties. At this point, parties usually have yet to agree on all the essential terms of their transaction but still wish to set out its broad framework.
  • An MOU is a document that outlines the understanding between two or more parties.
  • MOUs are often non-binding because they are preliminary agreements subject to a written contract. This incompleteness usually indicates the parties’ intention  to create legally binding relations only once a formal contract or agreement is enforced.

The common uses of MOUs are:

  • to set out the general intent of the parties to prevent any misunderstandings;
  • to set out the critical points of a complex transaction to help to ensure that all parties are on the same page concerning what is expected of them;
  • to provide safeguards in case the business deal collapses during negotiations;
  • to provide tangible proof of the business deal to potential investors.

What Must A “MOU” contain?

There is no hard and fast rule regarding what should be addressed in an MOU.

As a general rule of thumb, an MOU should include the following information:

  • the general intention of the parties;
  • an overview of the business transaction;
  • the critical points of a complex transaction (e.g. price, quality and deadlines);
  • safeguards in case negotiations fail (e.g. confidentiality, non-disclosure and good faith).

Even though a MOU is not legally binding, it is still an essential document since the MOU records the understanding between the parties of the transaction and their intention.

The purpose of a MOU is to foster collaboration, respect, and understanding among all parties involved in a transaction so that all parties can derive mutual benefit from the transaction.

If you’re need help drafting an MOU,  contact us via Lawyer Anywhere. We can help ensure that your MOU is as legally binding as possible.

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Tips For Business Owners : How To Avoid Minefields

tips
tips for business owners

Navigate Your Business Smoothly: 10 Tips to Avoid Minefields

Running a business is often exciting.  But without the right advice, it can also be a minefield, especially concerning legal matters.  Prevention is always better than cure. 

The following top 10 tips aim to guide you through the minefield:

1. Don’t Put Your Assets At Risk

Are you running your business with your partners?  

If so, are you aware that under Singapore law, all partners are jointly liable for the debts and obligations of the business?  

If your business encounters any problem, not only will your investment in the company be at risk, but all but your assets will also be at risk.  Depending on your business structure, it can help avoid liability – private limited company, limited partnerships, etc.

 

2. Put It In Writing

All your business agreements must be in writing.  

It is often difficult, if not impossible, to enforce an oral agreement.  You may have no recourse for compensation or legal action if problems arise.  So make sure all your contracts are written to give you flexibility and protection.

3. Get Proper Legal Advice Early

Different lawyers specialise in different areas of the law. 

You must find the correct lawyer to help you. Every growing business needs a business lawyer since they are experienced in representing start-ups and emerging companies. The amount you pay for an early advice is usually substantially lower in the long run since it saves you time, aggravation and money.

 

4. Spell Out Your Terms and Conditions

Cash flow is the lifeblood of any business.  

Make sure to spell out your terms and conditions (e.g. terms of trading) to all your customers. This way, you will not be at risk of being paid as and when the customers feel like it.

 

5. Keep Up to Date With The Law

The scope of business law is extensive; as such, no business owner can be expected to be well versed in every aspect of business law.  However, it would be best if you had an essential awareness to help keep yourself out of trouble.  A basic understanding of the following topics is vital:

  • basic contract rules
  • major employer-employee laws (e.g. CPF contributions)
  • regulations of your industry

 

6. Keep Employment Contracts Clear And Simple

It is essential to set out your expectations and rules for your employees.  

No employer/employee is expected to be an expert in employment law.  

Ensuring your employment contract is easy to understand would be helpful.

7. Protect Your Intellectual Property

Do you have a secret formula for your product?  

Do you think your competitors would love to get their hands on your secret formulae?  

If so, you must take steps to ensure that your “secrets” are protected.  Such protection includes trademark registration, confidentiality agreement and non-competition agreements.

 

8. Keeping Proper Corporate Records

Small businesses are notorious for failing to keep records.  Failing to maintain proper or improper records can create ACRA and IRAS problems.  This may also result in personal liability or even hinder your ability to raise funds.

 

9. List Down Your Rights & Responsibilities

If you run your business with your partners, have you consider what would happen if any partners left the company by choice or otherwise?  

Partners or shareholders often fail to sit down and list their rights and responsibilities. 

When a problem arises, this often results in costly litigation fees, which drain parties financially and mentally. 

Such problems can be avoided by having an agreement which deals with the following issues:

  • how much capital must each person contribute?
  • what happens if the business needs more money?
  • what happens if one person leaves the business?
  • what happens if one person dies?

10. Getting Involved In Litigation

Litigation fees can be astronomical.  You should always seek your lawyer’s advice for options such as mediation or arbitration to resolve the matter.  

If, on the other hand, a suit is brought against you, call your lawyer immediately.  Do not attempt to respond without your lawyer’s advice, especially since the first response usually sets the tone of the proceedings.

Having difficulties putting these tips into action? Skip the hassle of waiting to make an appointment with a lawyer.  We offer video consultations via Lawyer Anywhere so that you can get the help you need. Contact us today to get started.

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Do I Need A Will Or A Trust? Or Both?

a will or a trust
a will or a trust

A Will, A Trust, or Both? Find Your Answer Here

People use two primary estate planning documents to plan for the distribution of their assets after death: a Will or a Trust. Both have advantages and disadvantages, so it is important to understand their differences before deciding.

Most people are familiar with the concept of a Will – a legal document outlining how you want your assets to be distributed after you die. If you don’t have a Will, your assets will be distributed according to prevailing law.

Trust, on the other hand, is more complex. A trust is a legal arrangement in which you (the trustor) transfer ownership of your assets to a trustee, who then manages and distributes those assets according to the terms of the trust. Different types of trust can be used for a variety of purposes. For example, a revocable trust can be amended during the grantor’s lifetime, while an irrevocable trust cannot be amended. In addition, trusts can be used for estate planning, asset protection, and charitable giving.

Key Differences Between Wills And Trusts

When it comes to estate planning, many people are unsure whether a Will or a Trust is the best option.

While both options can effectively handle your affairs, there are some key differences to understand before deciding.

1. Effective Date

  • A Will goes into effect after you die, whereas a Trust is active once created and funded.
  • This means that a Trust can be used to manage assets during your lifetime, which can be helpful if you become incapacitated or otherwise unable to manage your affairs, something a Will cannot do.

2. Probate And Privacy

  • When a person dies, their estate must go through probate to confirm the Will and allow the distribution of assets. Probate is a process that a probate court oversees, and it can be lengthy and expensive. If a person dies without a Will, the process is often even more complicated and can take longer and cost more.
  • The key feature of a Trust is that it is not subject to probate because they are not considered part of a person’s estate. This means that Trusts avoid the time-consuming court proceedings and costs associated with probate.
  • While a Will is typically considered a private document, the reality is that anything that happens in court is available to the public through public records. In addition, as Trusts are not subject to probate, matters can be kept private. This can benefit individuals who want to keep their affairs confidential and out of the public eye.

3. Complexity And Cost

  • The cost of preparing a Will is relatively cheap and straightforward.
  • Trusts can be complex and require more paperwork to establish, so they are generally more costly to organise upfront than Wills.
  • However, avoiding probate can offset the cost of setting up a Trust.

4. Protection From Creditors

  • A Will is a legal document that dictates how a person’s assets will be distributed after death. However, if that person has creditors, those creditors may be able to claim against the Will.
  • Trusts offer asset protection from creditors. In addition, the trust creator can condition asset allocation to family members during certain events or restrict beneficiaries’ receipt of assets. This means you can control how your assets are used even after you’re gone.

A Will or A Trust or Both?

When it comes to estate planning, a Will may be all you need – but if you have more complex financial affairs or want to take extra measures to protect your assets, a Trust could be the best solution.

Be sure to consult an experienced lawyer to discuss your best options and devise a plan that will work best for you and your family.

Speak to us for advice on your Estate Planning Matters today!

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Myth Of The Perfect 2-Page Agreement

2-page agreement
2-page agreement

Unveiling the Truth about 2-Page Agreements

Many believe shorter is always better for contracts and that a 2-page agreement exemplifies simplicity and effectiveness.

The length of an agreement should not be the sole measure of its quality.

It is easy to see why a 2-page agreement would be appealing.

But the truth is, not all agreements can be effectively covered in just 2-page. While brevity may be seen as a virtue in some cases, it should not come at the expense of clarity and comprehensiveness.

Some agreements, such as those involving complex business transactions or legal matters, require a more detailed and comprehensive approach.

Attempting to condense all the necessary information into a 2-page document can lead to ambiguity, loopholes, and potential disputes further down the road.

It’s important to remember that the length of an agreement should be determined by its content and complexity rather than arbitrary page limits.

In some cases, a more extended agreement may be necessary to cover all the essential terms and protect the interests of all parties involved. Instead of fixating on a two-page agreement, it is more important to focus on crafting a well-written, clear, and comprehensive document that accurately reflects the intentions and expectations of all parties. This requires careful consideration, collaboration, and sometimes the expertise of legal professionals.

Having been in the corporate practice for more than 20 years and having drafted and reviewed countless contracts, we know that many of Singapore’s Small and medium Enterprises have turned to the internet for self-help measures to deal with the nitty-gritty day-to-day aspects of starting, running, and protecting their business as a cost-saving measure.

Like many business owners, you have probably used or are using an agreement downloaded from the internet.

Or you were a little more diligent and had searched for a few similar legal agreements and combined them into one agreement.

Many business owners come to us, flaunting their “simple 2-page but near-perfect” agreements and requesting minor “touch-ups”. We often had to tell these clients that their agreements required a significant overhaul as they did not provide for many common situations.

To truly understand the importance of a properly drafted agreement, it is essential to explore real-life case studies and their valuable lessons.

One of our clients, a training consultant, recently came to us with his “perfect” 2-page agreement. He said he had been using his consultant agreement for the last 6 years without problems.

He recently learned that the company he had worked with made copies of his work and circulated them to all its staff members. A quick review of his consultant agreement showed that it lacked terms relating to using his materials, particularly the right to compensation for the unlawful use of his materials.

Our client told us that, being a “one-man show,” he didn’t want to “scare off” his clients with a 20-page legal agreement.

Our client has now learned that he omitted important details and clauses by condensing his agreement into just 2-pages.

Having learnt a valuable lesson, our client’s standard agreement is now 8 pages long.

Companies in different industries have different specific needs. Very often, the various issues faced by businesses require a variety of specific legal wordings. If you feel that these issues are important to you, make sure your agreements are reviewed by a lawyer. Speak to us today.

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When Partnerships Go Wrong

partnership
when partnerships go wrong

Navigating the Partnership Maze : Learn from Mistakes, Build Success

Businesses often consider partnerships the most significant aspect of their success because they allow for collaboration, the sharing of resources, and the pooling of experience.

Partnership success and flourishing often lead to remarkable growth and success tales.

On the other hand, partnerships can fail, frustrate, and disappoint in some cases. Misaligned objectives, conflicting cultures, inadequate communication, and unclear duties are the many potential causes of such tumultuous seas.

Despite this, keep in mind that even in the face of adversity, the potential and promise of partnerships remain intact. Although problems may arise, they provide opportunities for introspection, education, and correction.

By comprehensively analysing the elements that led to the dissolution of the partnership, enterprises can pinpoint areas requiring enhancement and formulate strategies to manage challenging circumstances more adeptly.

We will examine a real-life example of a failed collaboration to determine what went wrong and what we can learn from it.

John and Peter were 2 entrepreneurs with complementary skills and a shared vision who came together to create a startup.

At first, everything seemed perfect. They had a solid business plan, a promising product, and a strong network of contacts. The business flourished, and started gaining traction in the market.

But over time, their once-harmon harmonic connection started to crack. 

The once-harmonious relationship began to suffer from disagreements over strategic decisions, different work ethics, and communication breakdowns began to plague the partnership. They started to view things from various angles and struggled to find common ground. These problems finally caused mistrust and a collapse in cooperation. The conflict grew more intense, and decision-making became contentious.

They had put their hard work into building a firm. Still, now their once-promising collaboration was on unstable ground, threatening its future.

 

We will take a closer look at the challenges and reasons behind the downfall of the partnership between John and Peter.

  • Lack of clear communication and shared vision presented one major obstacle in this cooperation.
    • The partners had different ideas and goals for the business, which resulted in frequent misunderstandings and conflicting decisions. This lack of harmony created tension and hindered progress, ultimately leading to a breakdown in trust and collaboration.
  • The unequal distribution of resources and labour presented still another major obstacle.
    • One partner felt they were unfairly burdened with the financial load and work, which bred bitterness, creating resentment and a sense of unfairness. This imbalance strained the relationship between the partners and affected the business’s overall success.
  • The partners should have developed a strong foundation of trust and transparency in their relationship-building.
    • These behaviours undermined confidence and eroded trust. It made it more challenging for the partners to work together effectively, ultimately leading to a breakdown in the partnership.
  • The failure of this partnership was further complicated by the fact that neither party possessed the necessary abilities to resolve conflicts.
    • Disagreements were ignored or handled poorly by the partners rather than being confronted head-on and finding solutions that would benefit all parties. This resulted in problems that still needed to be resolved, which continued to plague and hurt the cooperation between the parties.

Overall, the challenges and reasons behind the downfall of this partnership can be attributed to a lack of clear communication, shared vision, unequal contribution, trust issues, and a failure to resolve conflicts effectively.

Understanding and identifying these elements will help us to learn valuable about the importance of honest and open communication, coordinated goals, fair participation, trust-building, and efficient conflict resolution in preserving successful partnerships.

Contrary to popular perception, a lawyer is more valuable to you BEFORE a lawsuit arises. Speak to us today.

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Lawyers & Deal Breakers

lawyers
lawyers & deal breakers

Uncover the Untold Stories - Legal Secrets

Lawyers have often been branded as “spoilers” and “deal breakers“; they cause business deals to be aborted by letting legal issues cloud business goals and commercial imperatives. However, this image is far from the truth.

Legal expertise plays a crucial role in business transactions. Their involvement can differentiate between a successful business deal and a potential disaster. 

Lawyers have specialized knowledge in drafting and reviewing contracts, which are the foundation of any business transaction. They can carefully analyze terms and conditions, identify potential loopholes or unfavourable clauses, and negotiate on behalf of their clients to protect their interests. This level of legal expertise helps to enforce fair and equitable agreements that safeguard the rights of all parties involved.

By uncovering hidden risks and potential areas of concern, lawyers can provide the necessary guidance to make informed decisions and mitigate potential negative consequences.

Being your lawyer, our responsibility is to protect your legal position.

When business imperatives prevent us from fully protecting your interests, we bring awareness of the risks to the forefront so that your business decisions are always INFORMED decisions; made with full knowledge of the risks involved.

Our approach: Going in with your eyes wide open is better than plunge in blindly, hoping for the best.

While we cannot insure you against business risks, we always have your best interest at heart.

Here is a cautionary tale – believe us when we tell you that it happens more often than we like, to the best and worst of our clients.

Our client was very excited about the prospect of new business through a joint venture with another company. The joint venture company was owned and operated by friends they knew well. Negotiations were conducted cordially over lunch and dinner.

Being lawyers (as always) looking out for our client, we proposed to draw up a simple “joint venture contract”, setting out the agreement reached by our client and his friends on the scope of each party’s contributions, responsibilities and share of profits.

When presented with the contract, his friends were livid; they called our client to say that the contract was inaccurate and that the “deal breaker” lawyer was misinformed, misleading and missing the point.

Further, they claimed to have been insulted that our client even consulted a lawyer for what was, essentially, a venture between good friends based on mutual trust and friendship. They were, in short, not prepared to sign any contract.

Our client wanted the new business enough to forgo “the legalities,” – which was how his new joint venture partners had belittled our efforts.

The client was back in our office about six months into the new business. Not because he wanted to sue his joint venture partners for not making good on their verbal promises (this came later), but because he was now facing court action by third parties seeking compensation for failure to deliver on services that were the responsibility of his joint venture partners.

Contrary to popular perception, a lawyer is more valuable to you BEFORE a lawsuit arises. Speak to us today.

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Too Good To Be True

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too good to be true

Exposing the Truth Behind "Too Good to Be True"

Over an informal lunch, a client informed us that he had been granted an exciting, not-to-be-missed, one-time-only opportunity to buy over a rival company. Our client considered this an excellent offer as it would enable him to acquire the rival’s clientele and expand his business. He had already negotiated the price and was on the verge of inking the deal.

Being lawyers, we offered to “check out” the target company; and advised that a routine risk management measure would entail conducting a due diligence checks on the company’s liabilities and contracts.

Our client assured us that there was absolutely no need to waste money on due diligence checks as the target company had already made frank disclosure of debts amounting to $800k, which both parties had mutually agreed to take into account in the purchase price. In divulging such information, he felt that the owner had proven himself a man of integrity – or else why disclose the enormity of its liabilities?

We suggested to my client that the due diligence exercise would be part of our services when representing him in the purchase; in any case, it would not delay the sale or cost much money. The client reluctantly agreed (and only because he wanted to prove that I was being paranoid!)

Our due diligence showed that the target company owed creditors total debts of over $2.3 million! Additionally, foreign workers employed by a “sister” company were being deployed in their workshops and being paid an hourly wage, putting the company in breach of strict MOM regulations concerning the employment of foreign workers. So our “man of integrity” turned out to be a “man of straw” after all.

Our client was very grateful (and humbled) that we had saved him from a “rotten” deal.

Need help in checking out your “not-to-be-missed” deal? Contact us today.

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