Companies, NSW Conveyancing and NSW Business and Franchise
This bundle includes guides from the following three publications.
Recent updates can be viewed on Obiter - our News & Updates site.
Companies, Trusts, Partnerships and Superannuation
This valuable publication provides a simple guide to companies, trusts, partnerships, joint ventures and superannuation, with all commonly required documents, allowing you to advise and service your clients with confidence.
Superannuation is explained simply and comprehensively, and is accompanied by a full suite of precedents, including everything needed to set-up, run and amend a self managed superannuation fund.
The commentary provides a tax and succession planning overview sufficient for most circumstances found in general practice.
Some of the most popular precedents included in this publication:
- Comparative table of business structures
- Limited recourse borrowing documentation
- Company constitution
- Company resolution
- Shareholder agreement (long and short forms)
- Agreement for sale of shares
- SMSF trust deed and rules
- Binding death benefit nomination
- Unit trust
- Discretionary trust deed
- Hybrid trust
- Joint venture agreement
- Partnership agreement
- Put and Call option
- Charitable trust
NSW Conveyancing
A complete matter-management solution which allows solicitors, conveyancers and support staff to run a busy conveyancing practice. Includes the By Lawyers Contract for Sale of Land.
Each step in the transaction is set out in sequential order with easy access to all of the required precedents and a simple but comprehensive commentary. The publication includes the reference materials ‘1001 Conveyancing Answers’, ‘A full description of the sale process in NSW’ and ‘A full description of the purchase process in NSW’.
Popular precedents include:
- Contract for sale of land – By Lawyers
- Order on the agent
- Letter to vendor's solicitor with settlement adjustments and requesting payment directions
- Detailed cover sheet - Purchase of real property
- Section 66W certificate
- Direction to pay to purchaser’s solicitor
- Notice to complete
- Contract for sale of land – Law Society
- Letter to vendor's solicitor submitting transfer
- Settlement instructions mortgagee
NSW Business and Franchise
The Sale and Purchase of Business and Franchise publications seek to assist the practitioner to successfully navigate the complex process that is business conveyancing.
The commentaries set out the tax consequences of sale price apportionment and explain the tax treatment of stock, long service leave and other employee entitlements, the status of the premises and many other important issues.
The many precedents include the By Lawyers Uniform Contract for Sale of Business which covers all aspects of the transaction from pre-exchange vendor warranties and purchaser guarantees, by shareholders where applicable, to completion, the effective release of PPSR security interests, the transfer of business assets including copyright works, trade marks, supplier contracts and the ASIC requirements for the transfer of the business name. The contract also customises the competition restraints so they are enforceable, binds the key people and deals with confidential information and non?solicitation of staff and customers.
The comprehensive matter plan is an effective risk management tool, assisting practitioners to work though the matter ensuring the necessary steps of a typical matter are considered as required.
The Business Structures and the Comparative Table commentary usefully compares the various business structures. This is particularly useful when advising purchasers.
The Franchises commentary is a comprehensive manual on franchise agreements.
Recent updates can be viewed on Obiter - our News & Updates site.
Popular precedents in this publication include:
- By Lawyers Uniform Contract for Sale of Business
- Retainer instructions
- Library of 24 special conditions
- Library of 19 other contracts, licences and agreements
- Settlement adjustment sheet
- Client Enclosure - Summary of relevant considerations
Guides in this publication
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Business structures and the comparative table
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COMPANIES
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TRUSTS
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JOINT VENTURES
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PARTNERSHIPS
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SELF MANAGED SUPERANNUATION FUNDS
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SALE OF REAL PROPERTY (NSW)
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PURCHASE OF REAL PROPERTY (NSW)
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RETIREMENT VILLAGES (NSW)
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SALE OF BUSINESS AND FRANCHISE (NSW)
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PURCHASE OF BUSINESS AND FRANCHISE (NSW)
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1001 Conveyancing Answers (NSW)
MATTER PLAN
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“ Setting up a self managed superannuation fund – ATO website Investing – ATO website ”
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“ Papers, articles and case law ”
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“ This publication is designed to assist with the set-up of a new business structure, the acquisition of an existing structure and the change from one structure to another by covering the essential elements, advantages and disadvantages of each possible structure in relation to income tax, capital ... ”
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“ The following table considers: The status of each structure in relation to income tax, capital gains tax and land tax. ”
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“ A sole proprietorship, most often known as a sole trader, is the simplest structure. Its key feature is that the business has no separate legal existence from its owner. It is owned and run by one individual who is responsible for all debts and liabilities of the business. A sole trader does not ... ”
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“ A partnership is the relationship between persons carrying on a business in common, with a view to making a profit. A minimum of two partners is required to form a partnership: s 1 Partnership Act 1892. The maximum number of partners allowed by law is 20, s 115 Corporations Act 2001, unless the ... ”
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“ Unlike partnerships and sole traders, a company is a legal entity separate from its shareholder owners. There are four types of companies: a company limited by shares; ”
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“ A joint venture is a commercial relationship between two or more entities for the purposes of a particular undertaking, with a view to realising mutual commercial gain. Joint ventures are usually established for a specific purpose. ”
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“ A trading trust is a business structure where the trustee holds property, incurs liabilities, earns income and distributes it on behalf of the beneficiaries of the trust. The trustee is personally liable unless otherwise agreed with the transaction’s counter party. The trust deed normally provides ... ”
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“ Associations are not normally considered to be business structures as they generally serve the purpose of providing protection to a committee and members of a group usually conducting a 'not-for-profit' activity. Unincorporated associations ”
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“ The principal way in which tax is minimised is by the 'splitting' of income by having the flexibility to divert income to the lowest tax rate entity. Therefore a sole trader and a partnership of individuals rate poorly in the table. The current income tax rate for companies and base rate entities ... ”
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“ Taxable capital gains are added to the total taxable income of the taxable entity for the income year in which the capital gains tax event occurred and the marginal rate of tax is then applied. The taxation of capital gains is however preferential to that of ordinary income because of the ... ”
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“ Land tax in New South Wales Land tax is an annual tax calculated on the total value of taxable land above the land tax-free threshold, which is currently $692,000. ”
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“ The sole trader fairs badly in that they are liable to the full extent of their assets. The partnership is in even worse shape in that it is possible to be liable for debts incurred by a partner without the knowledge or authority of the other partners. ”
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“ Most clients seek to minimise their tax liability, provide for the protection of their assets and also retain full control of their affairs. The sole trader has full control but as seen above has no opportunity to split income and is exposed to creditors to the full extent of their assets. ... ”
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“ The set-up costs for a sole trader are minimal and this structure also has the lowest running costs. In addition, the principal is not an employee of the business and therefore compulsory employee superannuation contributions, payroll tax and workers compensation do not apply. Partnerships usually ... ”
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“ Each structure is given a flexibility score from the least flexible to the most flexible. All have wide choices when it comes to investments and all have wide general powers. Superannuation funds are limited by their restricted ability to borrow, by their inability to run a business and by their ... ”
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“ Division 152 of the Income Tax Assessment Act 1997 brings together all of the small business capital gains tax reliefs into the one area with a common set of eligibility criteria. The importance of structuring the ownership of assets to qualify for these concessions cannot be over emphasised as ... ”
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“ In the event that a family trust incurs losses then it will be prudent to seek appropriate advice on whether or not they can be carried forward and whether or not a family trust election needs to be made. The consideration of the complex rules involved are outside the scope of this commentary but ... ”
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“ Many clients believe that they have protected a trading name by registering a company name or even by registering a business name or domain name. This is not the case. A business name is merely a name under which a business operates. The purpose of registration is to allow ASIC to maintain a ... ”
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“ New South Wales – Duty on land rich companies and trusts The duty on the transfer of shares and units was generally abolished back in 2016. However for land rich companies and trusts the duty is still payable on these transactions. ”
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“ Example 1 – Tax advantages of a vendor selling shares Tax advantages of a vendor selling shares in the company rather than the company selling the business ”
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“ Superannuation is a form of savings plan for retirement encouraged by the Federal Government. By providing obligations on certain persons to contribute to superannuation (employers through the superannuation guarantee arrangements) and providing incentives to others (by the provision of taxation ... ”
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“ A self managed superannuation fund is a regulated superannuation fund with fewer than five members and which: complies with the conditions of s 17A of the SIS Act 1993; and ”
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“ The main benefits provided by the Federal Government to promote the use of superannuation are the taxation benefits for investment earnings accumulated in a superannuation fund to retirement and then the taxation benefits to members on withdrawal of those benefits in retirement. Principally: Income ... ”
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“ The steps required to form a self managed superannuation fund are relatively simple. Step 1 ”
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“ Trustees of a self managed superannuation fund cannot be disqualified persons. A disqualified person is anyone: who is an undischarged bankrupt; ”
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“ Two aspects need to be considered in deciding if and when contributions can be made to a self managed superannuation fund: is the fund allowed to accept the contribution in accordance with the Superannuation Industry (Supervision) Act 1993 (Cth) and Superannuation Industry (Supervision) Regulations ... ”
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“ The rules for a self managed superannuation fund accepting contributions are found in r 7.04 of the SIS regulations. Where these rules are not satisfied the fund is required to refund the contribution. ”
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“ Deductions for employers An employer can claim a tax deduction for contributions it makes to a self managed superannuation fund on behalf of its employees when the contribution is made where: ”
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“ Duty is generally payable on the establishment of a trust. However, exemptions apply for establishment of a self managed superannuation fund in all jurisdictions other than the Northern Territory where nominal duty is payable. Nominal duty is also generally charged on the transfer of property due ... ”
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“ Because of the generous taxation concessions, the Superannuation Industry (Supervision) Act 1993 limits the investments that can be made by a self managed superannuation fund. The overriding requirement is that a superannuation fund must be maintained for the sole purpose (s 62) of providing ... ”
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“ Section 17A(3) of the SIS Act sets out the circumstances in which a trustee of a self managed superannuation fund may be substituted without the fund failing to be compliant, and therefore suffering adverse tax consequences. Those circumstances are: where a trustee member of the fund has died and ... ”
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“ Account based income streams Simple account based pension ”
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“ Pursuant to regulation 6.21, following the death of a member, the superannuation fund trustee is required to pay the deceased member’s remaining superannuation interests to their beneficiaries, or legal personal representative, as soon as practicable. The payment of superannuation benefits after a ... ”
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“ A complying superannuation fund may only acquire ownership of real property from a member or related party where it constitutes business real property. Very broadly, “business real property” is real estate which is used wholly and exclusively in one or more businesses (whether carried on by the ... ”
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“ If the transfer of business real property is being treated as a contribution, then the contribution of the property to the fund will be counted in the member’s contribution limits in the financial year when the contribution is made. Significant adverse tax liabilities may be triggered for the ... ”
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“ The acquisition of any property by the fund needs to be in line with its investment strategy. If it is not, then the investment strategy should be reformulated to take into account the property acquisition prior to the transfer. Section 52 of the SIS Act 1993 requires that in formulating the fund’s ... ”
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“ The transfer of business real property may trigger income tax for the member and it is recommended they seek their own specific tax advice on the matter. Generally the income tax consequences are as follows: ”
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“ Stamp duty can be significantly reduced if business real property is transferred from a member to their SMSF under exceptions available in many states through their respective stamp duty legislation, for example, s 62A of the Duties Act (NSW) when a concessional rate of $500 applies if certain ... ”
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“ Stamp duty An in specie transfer to a member will incur ad valorem stamp duty on value on the transfer which is payable by the member. ”
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“ A self managed superannuation fund (SMSF) is permitted to borrow funds to acquire an asset provided that the borrowing is structured as a limited recourse borrowing arrangement (LRB arrangement). This commentary briefly explains the superannuation and taxation law applicable to limited recourse ... ”
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“ Apart from very limited exceptions, a self managed superannuation fund is only permitted to borrow under a limited recourse borrowing arrangement. Broadly, for a borrowing to constitute a limited recourse borrowing arrangement all of the following conditions must be met: the borrowed money must be ... ”
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“ The type of asset that a self managed superannuation fund may acquire under a limited recourse borrowing arrangement is regulated by: specific rules contained in the limited recourse borrowing provisions in ss 67A and 67B of the SIS Act; and ”
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“ Generally a self managed superannuation fund is only permitted to acquire a single ‘acquirable asset’ under a limited recourse borrowing arrangement. The concept of an ‘acquirable asset’ does not include money (whether Australian currency or foreign currency). The exclusion of money from the ... ”
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“ As noted above, superannuation law contains a myriad of investment rules which all complying superannuation funds must adhere to. These rules include the requirement that the investment be in line with the investment strategy of the self managed superannuation fund and be for superannuation ... ”
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“ Besides using the borrowed money to acquire the asset, a self managed superannuation fund is also permitted to use funds borrowed under a limited recourse borrowing arrangement to pay expenses incurred in connection with the acquisition and borrowing. This includes conveyancing fees, stamp duty, ... ”
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“ A self managed superannuation fund may borrow from any person under a limited recourse borrowing arrangement. This includes related and unrelated parties of the self managed superannuation fund. Where a self managed superannuation fund borrows from a related party then the loan must be on an arm’s ... ”
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“ It is a key requirement of a limited recourse borrowing arrangement that the asset the subject of the arrangement be held on trust for the self managed superannuation fund until such time as the loan is repaid. The custodian performs the duty of holding the asset on trust for the self managed ... ”
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“ Often external lenders require that a related party of the self managed superannuation fund, such as a member of the fund, guarantee the fund’s borrowing. The Commissioner of Taxation accepts that a limited recourse borrowing arrangement may involve a guarantee. However, the usual rights of a ... ”
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“ A self managed superannuation fund can refinance a limited recourse borrowing arrangement without jeopardising the complying nature of the arrangement provided that the arrangement and the fund remain compliant with all applicable laws. ”
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“ Stamp duty on entry into the custodian deed Where the asset which is the subject of the limited recourse borrowing arrangement constitutes ‘dutiable property’ over which stamp duty may apply, e.g. land, then entry into the custodian deed raises stamp duty issues. This is because the custodian deed ... ”
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“ Income Tax The income tax consequences for a self managed superannuation fund during the term of a limited recourse borrowing arrangement were previously unclear. The main issue was whether or not the custodian trust comprising the custodian as trustee of the asset for the self managed ... ”
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“ A limited recourse borrowing arrangement may be ended either by: the self managed superannuation fund paying off the loan and then collapsing the custodian trust by having the legal title to the asset transferred into its name; or ”
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“ Attention to all legislative requirements in detail is vital when a self managed superannuation fund decides to borrow to acquire an asset. Step 1 – Review rules and investment strategy of self managed superannuation fund ”
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