Corporate Law

What are cooperative marketing funds?

Cooperative marketing funds allow franchisors to combine contributions from franchisees, to undertake advertising or promotional campaigns on behalf of the entire network.  This framework allows franchisors to implement marketing that would otherwise have been beyond reach financially.  However, it is important franchisors are aware of their obligations under the Competition and Consumer (Industry Codes – Franchising) Regulation 2014 (Franchising Code). [Read more…]

Force majeure in a major pandemic

To say the world has been turned upside down is all but literally true in many respects.  Where there is the slightest sneeze of Covid-19, governments have made shut down decisions that that have impacted the ability of businesses to operate and perform their contractual obligations.

A feverous question is whether COVID-19 an event of force majeure and does it relieve the affected party from its obligations?  Below we set out the issues. [Read more…]

OAIC Notifiable Data Breaches report – July 2020

The Notifiable Data Breaches (NDB) scheme was established to improve consumer protection and promote better security standards to safeguard personal information in Australia.  The NDB scheme applies to all agencies and organisations who are protected by the Privacy Act 1988 (Cth) (Act) and required to take personal steps to secure personal information.

The Australian Information Commissioner (OAIC) publishes reports on notifications received under the NDB scheme to track the leading causes and sources of data breaches, and to draw attention to potential issues and areas that entities regulated under the Act need to have ongoing awareness of.  This article summarises the findings of the NDB Report for the period from 1 January to 30 June 2020. [Read more…]

Director’s identification numbers to become a reality

On 12th June 2020, the Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020 introduced the requirement for all Australian company directors to have a “Director Identification Number” (DIN).  The DIN will become a single identifier for each director across all of their office holdings with the true identity of each director is verified and is consistent across of ASIC’s corporate records.   The scheme will ultimately applies to Australian body corporates, Aboriginal and Torres Strait Islander corporations, and registered foreign companies. [Read more…]

Top 11 legal tips when selling a technology business

Selling a technology business can be an exciting time for shareholders and directors who have worked hard towards an exit.  Because of this, it’s important for the exit to be as smooth as possible.   Below we set out our top 11 tips for selling a technology business which, if followed, will ensure greater protection for sellers and reduce their risk. [Read more…]

Division 7A ITTA 1936 (Cth) – compliance & consequences

Division 7 (sections 102V to 109ZE) of the Income Tax Assessment Act 1936 (Cth) (Tax Act) contains specific requirements for advances of moneys and loans between private companies and its shareholders or associates.  Section 109B of the Act describes three (3) classes of payments which will be deemed to be dividends: [Read more…]

What is a section 293 direction?

There are several reasons why a shareholder may require financial information, primarily they are denied access to the ‘accounts’ so as to make informed decision about the company.  The Corporations Act 2001 (Cth) (Act) provides various mechanisms for shareholders to obtain financial and accounting information about a company, to allow them to access full and complete information about the financial circumstances of the company that they hold shares in.  One such mechanism is referred to as a section 293 shareholder direction, which compels companies to provide requested financial reports as defined by section 293. [Read more…]

Director misappropriating funds found to be oppressive

Shareholder oppression usually occurs when a majority shareholder(s) misuses their power to oppress the minority shareholder(s).   The test for “oppression” is an objective one and is contained in Section 232 of the Corporations Act 2001 (Cth) (Act).   For instance, where a director is found to have breached their fiduciary duty because they have misappropriated funds or assets this can be considered as being oppressive conduct.  This was the case in Martin v Australian Squash Club Pty Ltd (1996) 14 ACLC 452 (Martin) when an executive director misappropriated and misused company funds and assets and was held to have breached his fiduciary duties. [Read more…]

Electronic execution of documents by directors

Because of the current COVID-19 restrictions, it has been inconvenient and even impossible (in some cases) for directors to sign documents in what’s known as “wet-ink”.  In order to address this issue the Corporations (Coronavirus Economic Response) Determination (No. 1) 2020 (Cth) (Determination) has been published by the Federal Government.  The Determination modifies the operation of section 127 of the Corporations Act 2001 (Cth) (Act) and other legislation in relation to the conduct of meetings and the execution of documents by companies.  The meaning of “Document” has been amended to include a document’ in electronic form. [Read more…]

Relief for companies during COVID-19

On 24 March 2020, the Federal Government passed the Coronavirus Economic Response Package Omnibus Act 2020 (Cth) (Act).  As a part of the Act, insolvency and corporations laws have been temporarily amended in light of the financial challenges businesses are facing in the wake of COVID-19.  The changes made are intended to avoid unnecessary insolvencies and bankruptcies by providing a safety net for companies and their directors during the pandemic.  This article will discuss the key changes. [Read more…]

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