sutherland

Claim a CTP Green Slip refund

The NSW Government has reformed the compulsory third party (CTP) insurance scheme to reduce the costs of CTP Green Slips for vehicle owners and better support people injured on NSW roads.

If you were the registered owner of a private vehicle as at midnight 30 November 2017, you may be able to claim a CTP Green Slip refund for CTP insurance policies bought or renewed before 1 December 2017.

Over 4 million NSW vehicle owners will be eligible for a refund as a result of these reforms.

Claims must be submitted by 30 September 2018.

To see if you are eligible to claim a CTP Green Slip refund and to make a claim for your refund, log in to Service NSW

in General  by 20 Mar 2018 0 comments

Do you own land in NSW through a family trust structure?

Do you own land in NSW through a family trust structure? If so, then take note…

Revenue NSW (previously the NSW Office of State Revenue) automatically applies the Land Tax Surcharge on land tax assessments for properties owned through a family trust. The surcharge, which was introduced as part of the 2016 NSW budget, is currently at 2%, and can be significant.  There is a similar application to stamp duty also.

This surcharge does not apply where Revenue NSW has been advised of the fact that the trust deed specifically (and irrevocably and permanently) excludes foreign persons or entities as potential beneficiaries.

On 24 June 2020, the State Revenue Legislation Further Amendment Act 2020 (NSW) received Royal Assent. It clarifies that a trustee of a discretionary trust owning residential property in NSW is taken to be a foreign person for foreign surcharges purposes, if the trust does not irrevocably prevent a foreign person from being a beneficiary of the trust.

The transitional provisions give trustees of discretionary trusts an exemption and refund for foreign surcharges where the trust deed, made on or before 24 June 2020, contains a provision to prevent a foreign person from benefiting.

Until 31 December 2020, trustees of discretionary trusts have an opportunity to amend their trust deeds to include the provision and the provision must be irrevocable for the past and future surcharges not to apply.

From 1 January 2021, trustees of all discretionary trusts (including testamentary trusts) will be subject to surcharges unless the trust deed contains an irrevocable provision.

We have assisted several clients to update their trust deeds at the time of initial registration for land tax (to exclude foreign persons or entities as potential beneficiaries) however, where there is an existing trust with an existing landholding, this may be something that needs to be monitored and updated, so check your assessments.

FURTHER INFORMATION

Craig Pryor is principal solicitor at McKillop Legal. For further information in relation to land tax, trust deed amendments or any other commercial law matter, contact Craig Pryor on (02) 9521 2455 or email craig@mckilloplegal.com.au.

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your legal needs.

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in General / Property / Tax Planning / Trusts  by 01 Mar 2018 0 comments

Road Rules Awareness – Top 10 misunderstood road rules

Here is a guide to the Top 10 misunderstood Road Rules which provides simple answers to many road rule questions, including using roundabouts, when you can and can’t use high-beam and fog lights, and when it is permitted to make a u-turn.

Top 10 Misunderstood Road Rules

Below are some short videos on each topic in the top 10.

Roundabouts

Giving way to pedestrians when turning

Mobile phones

Merging

Keeping left

Using headlights and foglights

U-turns

Safe following distances

School zones

Yellow traffic lights

Road Rules Awareness Week provides an annual opportunity for drivers to refresh their knowledge of road rules. It also allows pedestrians, motorcyclists, passengers and bicycle riders to better understand the rules and improve their safety on or near the road.

 

 

in Criminal Law / General  by 26 Feb 2018 0 comments

Bringing on business partners?

For businesses that are growing and putting on other shareholders and directors, a Shareholders Agreement is a must have. If your business is not a company but it a partnership or a unit trust structure, the document would be a Partnership Deed or Unitholders Agreement.

Don’t leave some of the most important and fundamental issues for your business to chance. Consider a company with 2 or 3 shareholders – a typical small to medium sized business scenario…

COMMON PROBLEMS FOR SHAREHOLDERS

Issues that commonly that can affect shareholders include:

  • A shareholder sells their shares, leaving you with an unintended business partner;
  • A shareholder dies and you inherit an unintended business partner or you have to buy the shares from their estate for more than you ought to;
  • As a shareholder, you want out but cannot find a suitable purchaser but the other shareholders won’t buy you out;
  • The shareholders don’t have available funds to pay out an exiting shareholder;
  • The majority shareholder wishes to run the business one way, but is restricted by a minority shareholder;
  • You, as a minority shareholder, are being treated poorly by other shareholders who are running the business with little regard to your interests;
  • You wish to sell the company’s business as there is an excellent offer on the table, but another shareholder will not and is jeopardizing the sale;
  • You wish to receive dividends from the business, but others want to reinvest the profits.

The aim of a Shareholder Agreement is to bring some certainty to the business relationship so there is confidence in how the business will operate

TAILORED SOLUTIONS

A Shareholder Agreement tailors the rights and obligations of the shareholders to fit the particular purposes of the company, the nature of its business and the aims and wishes of its shareholders – to help avoid some of the potential problems identified above.

Some factors that should be considered in a Shareholders Agreement include:

  • The company’s activities/type of business – its purpose;
  • The roles and obligations of the shareholders;
  • Who are the directors and how the shareholders can change them;
  • Director remuneration;
  • Who will manage and control the business day to day, such as a managing director;
  • Meetings – how they are called, how they are run, counting of votes;
  • How decisions are made by shareholders or the board of directors;
  • What types of decisions require a simple majority, special resolution or a unanimous vote;
  • Payment of dividends;
  • Funding/borrowing;
  • Restrictions on the issue/transfer of shares and calculating the share price;
  • How shareholders can exit from the company and on what terms;
  • Funding of exits (including death) – buy/sell obligations and personal insurances;
  • Restraints on existing shareholders as to company customers etc;
  • Insurances to be taken out; and
  • How any disputes are to be resolved.

The aim of a Shareholders Agreement is to bring some certainty to the business relationship so that shareholders can have some confidence as to how the company will be run and, if there is a falling out, to provide a mechanism for that falling out to be dealt with, as painlessly as possible.

Ideally, the Shareholders Agreement would be in place from the outset whilst all parties are in agreement in relation to all issues however, they can be documented at any time (provided all parties agree).

FURTHER INFORMATION

Craig Pryor is principal solicitor at McKillop Legal. For further information in relation to starting or buying a business, drafting business documents or any other commercial law matter, contact Craig Pryor on (02) 9521 2455 or email craig@mckilloplegal.com.au.

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your business needs.

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in Business / Commercial Law / Dispute Resolution / General / Risk management / Trusts  by 12 Feb 2018 0 comments

Creditor’s Statutory Demand

If you or your business are owed a debt by an Australian company that is not disputed, then there can be a relatively simple, yet effective way of obtaining payment in as little as 3 weeks.

The Corporations Act 2001 (Cth) provides for the issue of a document called a “creditor’s statutory demand” to any Australian company that owes a debt greater than the prescribed amount (which from 01 July 2021 is $4,000*).  *Note that this threshold increased from the original $2,000 (at the time this article was original published) to $20,000 as a result of the Coronavirus legislation, but dropped back to the current threshold.

The process is basically that the demand is served and then you wait.

Statutory demands must be in the prescribed form, detail the debt due, be signed by or on behalf of the creditor and be properly served on the company. Where the debt is not a judgment debt, an affidavit is also required to be signed, certifying that the debt is due and payable.

The Act provides where the demand is served and not complied with within 21 days*, the company is presumed to be insolvent and is liable to be wound up. Compliance with the statutory demand is achieved by either paying the debt due or coming to an arrangement satisfactory to the creditor in relation to payment of the debt within that 21 day period. (*During the COVID-19 pandemic period, this increased to 6 months but has reverted back to 21 days from 01 January 2021).

The presumption of insolvency lasts for 3 months after the 21 day period expires. Any proceedings to wind up the company on the basis that it is insolvent must be commenced within that period.

Creditor’s statutory demands may only be set aside by the Court on certain grounds and applications to do so must be both filed with the Court and served on the creditor that issued the demand within that 21 day period. Grounds for setting aside the demands are limited and include where there is a defect in the demand, where the amount owed is less than the prescribed amount or where there is a genuine dispute as to the existence and/or amount of the debt claimed. None of these grounds may be relied on to oppose a demand after the 21 day period.

Where the debt is disputed, the service of a creditor’s statutory demand is not the appropriate way to obtain payment however, there are other methods available.

FURTHER INFORMATION

For further information in relation to debt recovery, company issues or any commercial law matter, contact McKillop Legal on (02) 9521 2455 or email help@mckilloplegal.com.au.

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your legal concerns or objectives.

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in Business / Commercial Law / Debt Recovery / Dispute Resolution / General / Insolvency & Bankruptcy / Litigation  by 29 Jan 2018 0 comments

What is AUSTRAC and what does it do?

So, what is AUSTRAC and what does it do?

The Australian Transaction Reports and Analysis Centre (AUSTRAC) is tasked with enforcing compliance with the Financial Transaction Reports Act 1998 (FTR Act) and the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act).

One of the purposes of the FTR Act and AML/CTF Act is to seek to ensure that instances of tax evasion, money laundering and the potential financing of terrorists are reported to the appropriate authorities.

The AML/CTF Act

The AML/CTF Act imposes obligations on entities that provide ‘designated services’ (such as account/deposit-taking services, cash carrying/payroll services, currency exchange services, life insurance services and lending).

Entities that provide one or more designated services under the AML/CTF Act are ‘reporting entities’.

Threshold transactions

Reporting entities must submit a Threshold Transaction Report (TTR) to AUSTRAC within 10 business days after the entity provides a customer with a designated service involving a ‘threshold transaction’.

Threshold transactions involve the transfer of physical currency or e-currency of AUD$10,000 or more (or foreign currency equivalent).

International funds transfers

The ‘sender’ of an International Funds Transfer Instruction (IFTI) transmitted out of Australia, or the ‘recipient’ of an IFTI transmitted into Australia, must report the instruction to AUSTRAC within 10 business days after the day the instruction was sent or received.

Suspicious matter reports

A reporting entity must submit an Suspicious Matter Report (SMR) to AUSTRAC within 24 hours after forming the relevant suspicion if the suspicion relates to terrorism financing (or otherwise within 3 business days) if it is suspected on reasonable grounds that:

  • a person (or their agent) is not the person they claim to be, or
  • information the reporting entity has may be: relevant to investigate or prosecute a person for; an evasion (or attempted evasion) of a tax law, or § an offence against a Commonwealth, state or territory law; or of assistance in enforcing: the Proceeds of Crime Act 2002 (or regulations under that Act); or a State or Territory law that corresponds to that Act or its regulations
  • providing a designated service may be: preparatory to committing an offence related to money laundering or terrorism financing; or relevant to the investigation or prosecution of a person for an offence related to money laundering or terrorism financing.

The FTR Act

Where an entity is covered by the AML/CTF Act (which was enacted years after the FTR Act), they are generally not covered by the FTR Act.

The FTR Act covers cash dealers include financial institutions, corporations that provide financial or insurance services, trustees and managers of unit trusts and a person who carries on a business of operating a gambling house or casino. The obligations of solicitors are also prescribed by the Act.

Where a significant cash transaction takes place (a cash transaction involving AUD$10,000 or more (or foreign currency equivalent including transactions which, when aggregated, exceed that amount), a Significant Cash Transaction Report (SCTR) is to be lodged with AUSTRAC.

Cash dealers who are a party to a ‘suspect’ transaction must report that transaction to AUSTRAC. The cash dealer must submit a suspect transaction report (SUSTR) to AUSTRAC as soon as practicable after forming the suspicion.

The objective of the FTR Act is that by preparing the reports to AUSTRAC, businesses can more easily identify their customers and are therefore more likely to reduce the incidence of fraud.

in Business / Commercial Law / General / Online Issues / Risk management  by 01 Dec 2017 0 comments

The importance of workplace policies

All employers need to maintain, develop and implement appropriate workplace policies in their business.

The need for these policies is not only compliance with relevant legislation, but also to protect the businesses against claims which might arise from inappropriate conduct of employees. Creating and enforcing workplace policies is one way in which employers may be able to effectively prevent or manage such claims.

Putting in place suitable policies can be a time-consuming task and one that is potentially dangerous for those who are not familiar with the legislative and contractual requirements involved.

The purpose of workplace policies is to place both the employer and employees (or prospective employees) on notice of certain things such as prohibited conduct. They often prevent any serious problems arising but if problems do arise, the employer is usually able to prove they upheld their legal duty by showing compliance with an established written policy.

We can tailor policies to meet the requirements of your particular business.

The following is a non-exhaustive list of topics that employers may wish to cover with appropriate policies:

  • Equal employment opportunity
  • Discrimination, harassment, bullying and violence
  • Work health and safety
  • Appropriate email and internet use
  • Workplace surveillance
  • Drug and alcohol use
  • Mobile telephone use
  • Dress codes
  • Annual leave and sick leave
  • Dispute resolution
  • Counselling and disciplinary procedures
  • Privacy
  • Redundancy

The workplace policies should be drafted so that they compliment the employment contracts in place.

FURTHER INFORMATION

Craig Pryor is principal solicitor at McKillop Legal. For further information in relation to workplace policies, business law or employment related matter, contact Craig Pryor on (02) 9521 2455 or email craig@mckilloplegal.com.au

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your legal concerns or objectives.

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in Business / Commercial Law / Dispute Resolution / Employment / General / Risk management  by 01 Nov 2017 0 comments

What is an indemnity clause?

WHAT IS AN INDEMNITY CLAUSE?

An indemnity clause is a common clause in contracts, whether for the supply of goods, terms and conditions of the provision of services, leasing of assets or the sale of property.

The indemnity is intended to assign responsibility for risks in performing the contract to a particular party – it either confirms or alters the position at common law which would otherwise apply to determine responsibility for such events.

COMMON EXAMPLES

When drafting an indemnity, the nature and types of losses that may arise need to be considered.

Common areas that you may want an indemnity clause or limitation of liability cause to cover may include: negligence; injury to or the death of any person; loss of or damage to property; infringement of third party rights, such as intellectual property rights; duties and taxes; and legal costs and disbursements.

REMOTENESS & REASONABLE FORSEEABILITY

The common law (extending back to the 1854 case of Hadley v Baxendale) basically provides that if a head of damage wasn’t contemplated by the parties at the time of contracting (wasn’t reasonably foreseeable) or didn’t arise naturally arises from the breach according the usual course of thing (is too remote) – it may not be a recoverable loss.

Accordingly, if the damages that you may want the other party to wish the other party to bear on the occurrence of a certain event are considered remote, then they would probably not be recoverable at common law and therefore, you may wish to specifically provide for them in the clause.

The other party may not agree, so the negotiation would then begin and the parties will ultimately have to agree on what is a reasonable compromise in the circumstances.

DRAFTING THE INDEMNITY

Commonly, indemnity clauses are drafted such that where a right to indemnity arises, the liability reduced to the extent that the party benefited by the clause caused or contributed to the loss, that is reduced proportionally.

The extreme in indemnity clauses is where the liable party is liable absolutely (ie, there is no carve out to reduce the liability proportionally). This type of clause, given its strict nature, is usually only agreed to where the event is wholly within the control of the indemnifying party.

INSURANCE COVERAGE

Just as the strength of a personal guarantee is in the financial standing of the guarantor, you also need to be satisfied that the party providing the indemnity has the means to meet any claim if called upon. Often, a party is required to have insurance to support any indemnity but they fail to investigate the extent of their cover and are often not insured at all.

FURTHER INFORMATION

Craig Pryor is principal solicitor at McKillop Legal. For further information in relation to any contract negotiation, agreement drafting issue commercial dispute, contact Craig Pryor on (02) 9521 2455 or email craig@mckilloplegal.com.au.

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your legal concerns or objectives.

Stay up to date – LinkedIn | Facebook | Twitter | McKillop Legal Blog

in Business / Commercial Law / Dispute Resolution / General / Litigation / Risk management  by 01 Oct 2017 0 comments

Payment surcharge changes

If your business charges customers a surcharge on transactions, be aware that from 1 September 2017, all businesses that impose payment surcharges on card transactions need to comply with the the Competition and Consumer Amendment (Payment Surcharges) Act 2016 which bans ‘excessive’ payment surcharges.

The new laws cover surcharges on typical card payment methods:

  • EFTPOS (debit and prepaid);
  • MasterCard (credit, debit and prepaid);
  • Visa (credit, debit and prepaid); and
  • American Express companion cards (issued through an Australian financial service provider, rather than directly through American Express*).

*Note that the benchmarks will not apply to foreign-issued cards. American Express proprietary cards (issued by American Express directly) are not covered by the ban, nor are BPAY, PayPal, Diners Club cards, UnionPay, cash or cheques.

The purpose of the legislative ban is to stop excessive surcharges – those charged at a price more than the actual cost of accepting that payment method. The cost to a business of accepting each payment method known as the ‘cost of acceptance’ for that method and is determined according to the Reserve Bank of Australia (RBA)’s standards set by the RBA Payments Systems Board.

A payment surcharge is generally considered excessive if it exceeds the ‘cost of acceptance’.

If your cost of acceptance for Visa credit cards is 1%, then you can only charge a maximum of 1%, not 2% or 3%.

The cost of acceptance can include merchant service fees, fees paid for the rental and maintenance of payment card terminals, any other fees incurred in processing card transactions, fraud prevention services, insurance etc but these must be able to be verified by contracts, statements or invoices.

Businesses cannot include any of their own internal costs when calculating their surcharges (for example, labour or electricity costs).

The Australian Competition & Consumer Commission (ACCC) is responsible for enforcing the ban and can:

  • issue an infringement notice with penalties of up to $2,160 (individuals, partnerships), $10,800 (body corporate) or $108,000 (listed corporation
  • take court action seeking pecuniary penalties of up to $1,164,780, injunctions and other orders.

Receiving such a penalty would be a disastrous hit to small business, so make sure you comply with the payment surcharge changes. Ask your financial institution to let your know what the average cost of accepting cards is and review it annually so you don’t get caught out.

You may also need to update your business’s Terms of Trade.

Westpac notes costs of acceptance here, NAB here and ANZ here

FURTHER INFORMATION

Craig Pryor is principal solicitor at McKillop Legal. For further information in relation to business law, litigation and dispute resolution or any commercial law matter, contact Craig Pryor on (02) 9521 2455 or email craig@mckilloplegal.com.au.

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your needs.

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in Business / Commercial Law / Dispute Resolution / General / Online Issues / Risk management  by 01 Sep 2017 0 comments

Purchasing a Franchise?

What is a franchise?

A franchise is a business system controlled by the franchisor, using the franchisor’s symbol or trade mark for a fee, subject to rules/restrictions/restrictions as stated in the relevant Franchise Agreement.

Given the bargaining power of the franchisor and franchisee being very different, the relationship of franchisor/franchisee is regulated to help ensure fairness in their dealings.

The Australian Competition & Consumer Commission (ACCC) regulates the Franchising Code of Conduct (Franchising Code), which is a mandatory industry code that applies to the parties to a franchise agreement.

Franchising Code

The Franchising Code is in Schedule 1 to the Competition and Consumer (Industry Codes – Franchising) Regulation 2014 made under s. 51AE of the Competition and Consumer Act 2010. The Franchising Code applies from 1 January 2015 and replaces the previous 1998 code.

In short, the Franchising Code:

  • requires parties to act in good faith (for example, reasonably, honestly etc) in their dealings
  • introduces financial penalties and infringement notices for serious breaches
  • requires franchisors to provide prospective franchisees with a short information sheet (Disclosure Document) outlining the risks and rewards of franchising
  • requires franchisors to provide greater transparency in the use of and accounting for money used for marketing and advertising and to set up a separate marketing fund for marketing and advertising fees
  • requires additional disclosure about the ability of the franchisor and a franchisee to sell online
  • prohibits franchisors from imposing significant capital expenditure, except in limited circumstances
  • provides a dispute resolution process

Disclosure Document

An important requirement of the Code is the requirement for the franchisor to provide a prospective franchisee with a “Disclosure Document”.

The purpose of the Disclosure Document is to provide prospective franchisees, and existing franchisees that wish to renew or extend their existing agreement, with information about the business and the franchisor to allow the franchisee to make an informed decision about the franchise and obtain current information regarding the franchised business.

The Disclosure Document must provide information on the business, including:

  • the franchisor, its contact details, its business and its directors and their business experience
  • details of any master franchisor
  • the franchise site or territory
  • details of legal proceedings against the franchisor and its directors
  • contact details of current (and former) franchisees
  • financial details
  • the franchisor’s requirements for supply of goods or services to a franchise
  • whether online saes are permitted and any restrictions
  • details on marketing or other cooperative funds
  • details of payments such as pre-payments, establishment costs and other fees
  • details on any trade marks and patents that are part of the franchised business
  • details of arrangements when the franchise arrangement ends

If you are purchasing a franchise, before entering into an agreement, you should seek legal and accounting advice.

FURTHER INFORMATION

Craig Pryor is principal solicitor at McKillop Legal. For further information in relation to buying/selling businesses, franchises or any commercial law matter, contact Craig Pryor on (02) 9521 2455 or email craig@mckilloplegal.com.au.

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your legal concerns or objectives.

Stay up to date – LinkedIn | Facebook | Twitter | McKillop Legal Blog

in Business / Commercial Law / Dispute Resolution / General / Online Issues / Risk management  by 16 Aug 2017 0 comments
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