A Sweat Equity Agreement is an agreement between a business and someone providing services, whereby the service provider agrees to take equity in the business, rather than cash. Sounds simple? The devil is in the detail...
New business owners are often told to operate their enterprises through a 'proprietary limited company' to cap their liability if something goes wrong. This is good advice, but it is nowhere near the end of the story. You also need to protect your assets. How does a proprietary limited company work? A proprietary limited [...]
If you are carrying on a business through a partnership, then we strongly suggest you consider moving to a company. Find out why will hold this opinion.
Do the temporary changes to insolvency law mean that you won’t get paid? Not entirely, but they do mean you need to be super careful to assess creditworthiness before extending credit.
After deciding that a company suits your requirements as the entity through which to operate your business, follow these steps to get your company up and running.
When people go into business together it’s common for them to enter into a Shareholders’ Agreements to govern how they will own and administer their company. Our preference is to use a tailored version of the company’s ‘Constitution’ as the primary instrument to regulate the affairs of a company. Our reasons are:
Founding a company is a lot easier than retaining control of it. Part of your journey will necessarily involve other people. First, it may be a co-founder. Then family and friend investors, and ultimately professional investors. During this evolution, the chances of you being left behind, and things getting out of control, increase exponentially. We’ll help you get back in control, with a binding entitlement to what you’re worth.
As a general rule, a company provides its shareholders with ‘limited liability’. This means that the extent of resources a shareholder risks when they invest in an enterprise is limited to the amount of capital they put into the company (or agree to put in). If the company runs out of resources, or gets hit with a nasty surprise, the capital may all be lost, but the shareholders are not obliged to put anything additional in. They have just ‘done their doe’. The limitation of liability for shareholders has not really changed much over the centuries that limited liability companies have been around. What has changed, is the role and responsibility of directors.
As a general rule, Budgets try to please as many people as possible, and upset as few as possible. This strategy is even more important for a Budget in an election year - when short-term memories are still likely to be working on polling day.
Here are some reasons why you should think about a Constitution for your company, rather than simply adopting the 'replaceable rules' in the Corporations Act.
The ATO is using Director Penalty Notices more often. However, the ATO officers are only human and they can make mistakes. There are four main ways in which your DPN may be challenged.
Company title is rare and unusual. If you are selling it then you should have experienced lawyers to help you.
We have written a lot of technical stuff about selling a business. But we’re finding that more and more people want to understand the best high-level strategy to actually conclude a deal. This article sets out the key steps.
Most Shareholder Agreements, Constitutions and Partnership Agreements provide 'pre-emption' rights. These are rights that require someone wanting to sell an interest in the enterprise, to first offer the interest to the other equity holders. But they do not necessarily require the majority to buy.
Many businesses have built strong brands by treating customers well. But it is also important to ensure that no single customer can put your business at risk. You need to draw the line somewhere. This is where your terms of supply come in. However, these terms need to be consistent with the Australian Consumer Law.