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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“ Commentaries ”
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“ In the legal profession the term ‘costs’ refers to the fees and other expenses a solicitor charges a client for their professional services and other payments that arise out of the provision of legal services, including disbursements such as court fees. Costs are one of the most heavily regulated ... ”
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“ Nature of disclosure1 Timing of disclosure2 ”
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“ Costs disclosure is not required in relation to certain clients, described in the legislation as ‘sophisticated clients’ or ‘government or commercial clients’ as defined by the relevant legislation to include clients such as lawyers, law firms, public companies, liquidators and government entities. ... ”
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“ Cost agreements are not always required although clearly as between the practitioner and their client there will be disclosure but without the need for formal compliance with the regulation. The limits are: ”
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“ In NSW & VIC there is a standard costs disclosure for fees under $3,000 which is included in the precedents. If the total legal costs in a matter (excluding GST and disbursements) are not likely to exceed $3,000 (the higher threshold), a law practice may, instead of making a disclosure under ... ”
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“ Knowing that clients are disinclined to read, sign and return cost agreements, the letter sending them usually provides that unless heard to the contrary the practice will assume agreement. There will almost always be a later opportunity to have the agreement signed. Of course, many practitioners ... ”
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“ Costs are remuneration for professional work when acting in the capacity of a barrister or solicitor. Payments to a practitioner for work which is not professional work, are not costs. Disbursements are payments made, or liabilities incurred in the course of practice and which the practitioner is ... ”
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“ Firms are required to provide an estimate of the total of costs, excluding GST and disbursements, and information on the impact of any significant change to these costs. A law practice must take all reasonable steps to satisfy itself that the client has understood and consented to the proposed ... ”
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“ What is a disbursement Disbursements are payments made, or liabilities incurred in the course of practice, and which the practitioner is bound to pay whether put in funds by the client or not; or payments which, by established custom and practice of the profession, the practitioner is bound to pay. ... ”
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“ A lawyer may request money on account of fees be paid into a trust account before the commencement of work. This is particularly so in criminal and other court matters where the inclination to pay may wane with an unwanted outcome. The funds may cover legal fees as well as disbursements and the ... ”
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“ The costs agreement will set out the billing cycle. Commonly a regular monthly billing cycle is adopted covering work undertaken during the previous month. ”
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“ A lump sum invoice is one which sets out a recital describing the legal service provided and a total amount. An itemised invoice is one which sets out in detail each of the legal services provided, the date they were provided, and the cost for each service. An itemised invoice allows for an invoice ... ”
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“ A law practice cannot charge for the time spent in preparing an invoice. A law practice cannot charge for the time spent in preparing an itemised invoice for a client who has already received a lump sum invoice. ”
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“ All bills should be accompanied by a written statement setting out the avenues that are open to the client in the event of a dispute and any time limits that apply to the taking of such action. Under the uniform law in NSW and VIC each bill or covering letter must be signed by a principal of the ... ”
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“ In 1991 the Australian Competition and Consumer Commission released guidelines to assist businesses in the withdrawal on one and two cent pieces. In the purchase of goods or services for cash, businesses were advised to round the final payment: ”
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“ – When to charge and how to charge Goods and Services Tax (GST) is a broad-based tax of 10% applied to most goods and services, including legal services. Businesses are required to register for GST if their turnover exceeds the $75,000 threshold. If turnover is less than $75,000 than registration ... ”
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“ Reducing fees can create good will but needs to be handled with care as some take offence to the implication that they cannot afford to pay for the work they have retained. It is also a hard won reality that comes from experience that people are inclined not to value any advice given for free. ”
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“ Credit terms are quite common and need to be clearly documented and administered. ”
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“ Notification of rights is a requirement in all states and is found in all example invoice precedents. If the client has not been advised of their rights in a costs agreement, then practitioners must advise the client of their rights at the time of issuing the invoice. ”
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“ Monthly accounting for work in progress is recommended in order to achieve target lockup days. If debtors are not followed up promptly cash flow reduces making it imperative to adopt a debtor’s policy for effective debtor control. All overdue accounts must be followed up promptly and repeatedly. ”
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“ Termination When a retainer is terminated before completion a lawyer may claim costs for the work done to the date of termination on a quantum meruit basis if: ”
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“ Sound financial management is absolutely critical to the success of the law practice. There is a high correlation between practices with poor financial management and increased probability of experiencing professional negligence claims. The link is clear. Principals, who do not manage their ... ”
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“ Methods of payment include: Credit card; ”
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“ All By Lawyers cost agreements include the following authority to transfer money to pay their invoices: Trust money ”
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“ Lawcover recommends that practitioners use the cost assessment scheme to recover costs. Instituting proceedings against a disgruntled client who refuses to pay an outstanding bill exposes practitioners to the risk of a cross-claim in negligence being filed. The advantage of the cost assessment ... ”
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“ Other states For more information on similar procedures that exist in some other states, see: ”
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“ ATO webpage - Family trust election ATO webpage - Streaming trust capital gains and franked distributions ”
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“ Business and Franchise Sale and Purchase Personal Property Securities ”
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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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“ The term ‘trust’ refers to a relationship which exists in which a person or entity, known as the trustee, holds assets, or is bound to exercise certain rights, on behalf of and for the benefit of one or more beneficiaries. ”
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“ Taking good instructions The use of the precedent Retainer Instructions ensures that all important issues are considered, instruction which cannot be contradicted later recorded, costs discussed, and the scope of the retainer clearly defined. ”
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“ As a trust is not a separate legal entity, the trustee is personally liable for all debts, liabilities and expenses the trustee incurs for the trust. There are two general rights extended to trustees under trustee legislation and through limitation of liability clauses within trust deeds that serve ... ”
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“ The fees and stamping requirements for establishing a trust deed vary throughout Australia, and the duty payable also varies depending on the type of property that is held by the trust. The following table summarises the procedure for stamping and the fee requirements in each jurisdiction. ”
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“ Advantages of discretionary trusts Taxation ”
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“ The trustee of a discretionary trust is given discretion as to the way that the property of the trust is distributed to beneficiaries. At the core of the discretionary trust relationship is the ‘power of appointment’. The power of appointment, which can be conferred by will or inter vivos, vests ... ”
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“ The following actions and documents are required to establish a discretionary trust: Decide on the parties to the trust – A discretionary trust requires at least one trustee, a settlor and, if required, an appointor. The beneficiaries may be both individual parties and members of a specified class. ”
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“ The trust is established when: the trustee has consented to act as trustee; ”
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“ The trustee is responsible for managing the trust's tax affairs, including registering the trust in the tax system by obtaining a tax file number (TFN) and an ABN (if applicable), lodging trust tax returns and paying certain tax liabilities. Income tax ”
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“ At trust law there is no distinction between a ‘power of appointment’ and a ‘power of amendment’. The term ‘power of appointment’ is often used interchangeably to refer to the power to amend a trust instrument and the power to appoint or consent to a change in trustee. In practice ‘power of ... ”
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“ Discretionary trusts are favoured asset protection tools for many privately held family businesses, however they can become the subject of a wide array of disputes, particularly if there are complex financial arrangements, with complicated family dynamics underlying the trust. Disputes which can ... ”
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“ Trusts are required by law in each jurisdiction except South Australia, to vest and end after 80 years. It is common for the deed to provide for an earlier vesting date or link the vesting of the trust to a specific event, such as a beneficiary reaching a certain age or the death of a certain ... ”
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“ A unit trust is a type of fixed trust that is commonly used in business and investment settings where there is a venture between unrelated or arm’s length parties. A unit trust can be distinguished from other types of trusts as the beneficiaries’ rights to the income and the capital of the trust ... ”
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“ For tax planning purposes, it is important to recognize the distinction between fixed and non-fixed unit trusts. A fixed unit trust ”
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“ Units in a unit trust structure often draw comparisons to shares in a company. As with shares in a company, a unit trust allows for multiple classes of units with different rights in relation to capital, income and voting. Units are also recognised as a form of property that can be valued, bought ... ”
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“ The following actions and documents are required to establish a unit trust: Parties – A unit trust requires both a trustee and at least one unitholder. In circumstances where there is only one unitholder the trustee must be a separate person or entity. ”
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“ A unit trust is established once the trust deed is executed and the unitholders subscribe to the foundation units by paying the initial price to the trustee, usually $1 per unit. The trustee consents to act as trustee of the unit trust and issues units to each of the unitholders. For stamping and ... ”
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“ The trustee is responsible for managing the trust's tax affairs, including registering the trust in the tax system by obtaining a tax file number, lodging trust tax returns and paying any tax liabilities. Income tax ”
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“ Redemption and transfer of units The unit trust deed will ordinarily provide for the redemption of units at the election of the trustee, or upon request by a single unitholder, or by resolution of the unitholders as a group. The right to transfer units is usually restricted by a right to ... ”
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“ The unit trust deed will identify the vesting date of the unit trust. It is common for the unit trust deed to enable the trust to be wound up or terminated at any time if the trustee brings the vesting day forward or distributes the trust property. Often the trust deed will provide for the ... ”
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“ A hybrid trust combines the features of both fixed and discretionary trusts, there are several different forms of hybrid trusts, but most aim to combine the more favourable features of discretionary and unit trusts to create a more flexible structure. Hybrid trusts can be used in a wide variety of ... ”
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“ Charitable trusts are express trusts which have been established for a particular charitable purpose, rather than for the benefit of identifiable beneficiaries. Charitable trusts enable the transfer of gifts from individuals and or corporations to charities. A charitable trust can be established to ... ”
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“ A special disability trust is a specific type of trust, created by statute, which can be established to provide for the long-term reasonable care and accommodation needs of a family member with a severe disability. Such a trust can either be set up inter vivos or as a testamentary trust in a will. ... ”
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“ When finalising a matter it is important to terminate the retainer. This informs the client in writing that all work on the matter is complete and that no further work will be undertaken unless the firm is otherwise instructed. If the matter is finalised in such a way that the client retains ... ”
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