Steve Milicevic

Hi there,

Please email me at steve@miliceviclawyers.com.au

I'd be happy to assist,

Steve

Depending on where in Australia you want to run this, the exact mechanic of the giveaway, the value of the prizes and various other factors, you may need permits for this. And you should have terms and conditions.

Contact me if you'd like assistance:

david.smith@gadens.com

Hi there. Starting a business can be exciting, but there are important legal issues you need to consider to minimise risks and protect your venture.

The first thing to consider is what type of business structure you want. A business may operate as a sole trader, company, partnership or trust. Each of these business structures has advantages and disadvantages. Although we do not know the full details of your business plan, from the information you provided, it sounds like a company may be an appropriate option for you. Running your business as a company means it exists as a separate legal entity that can incur debt, sue and be sued. This would limit your personal liability as a shareholder (i.e. owner) of the company. Setup costs are relatively low but, once you create a company, there are ongoing rules and regulations that your company must follow.

Regardless of the type of business structure you choose, you will need to register your business for a Tax File Number and Australian Business Number. You should also consider registering a business name (also known as a trading name) – a valuable asset as it helps differentiate your business from competitors – and a website domain name.

You should also consider registering a trade mark. A trade mark is a word, phrase, shape, logo, etc, that is used to distinguish goods and services of one trader from those of another. If you choose to register your trade mark, you will get exclusive use of that trade mark throughout Australia for an initial period of 10 years. Others will be prevented from trading with your business’ trade mark. Trade marks can become very valuable assets, especially as the reputation of a business grows.

It is also important that your business is taxed correctly. The taxes you need to register for depend on the type of business you are running. It sounds like you will be buying or selling goods and services (namely a membership service to a business network), which means you will need to register for GST if the business has an expected annual turnover of $75,000 or more. Other taxes will apply if you pay staff salaries or wages.

Other factors you may need to consider in setting up your business are insurance, record keeping and accounting systems, and setting up a governance structure (i.e. policies for the day to day management and operation of the business).

There are many things to consider when preparing a shareholders agreement. Most importantly, it's imperative that it is customised to your business and theobjectives of its shareholders. Matters that are customarily addressed in a shareholders agreement include:

1. Pre-emptiverights:That is, the ability for existing shareholders to have priority over any third party in relation to fundraising activities and any proposed sale of shares.
2. Voting thresholds and reserved matters:Namely, what level of approval is required by the board and/or shareholders for matters voted on and what matters (above that prescribed by law) are reserved for shareholder approval.
3. Composition of the board and nominee representatives.
4. Future fundraisingactivities.
5. Transfer or shares -processand procedure.
6. Dividend policies.
7. Preparation of accounts.
8. Drag and Tag alongrights - the ability to force a minority shareholder to sell and/or the ability for a minority shareholder to participate inthe sale of shares by a majority shareholder(s)
9. Matters which may trigger a compulsory exit by a shareholder (for example, shareholder default or death or disability of a key associated individual)and how such interest is valued
10. Restrictive covenants - do you seek torestrict a shareholder from having an interest in a competing business?
11. The establishment of business plans and budgets.

My advice would be to seek legal assistance in the drafting of this agreementand not rely on template documents.

Kind regards

Richard Partridge

Gadens

Hi there. Launching a start up can be a complex process, and it is great that you are seeking some assistance to ensure everything is done properly.

The first part of your question is straightforward. If you would like some terms and conditions drafted for you, you should contact a solicitor who specialises in start up businesses. Solicitors in this area develop standard form terms which are tailored to different scenarios, and will ensure you get the best outcome possible for your business.It is an investment in the future of your startup as it will give you confidence that all the legal documents are in place.

The second part of your question is more complex. There are some problems you should be aware of that may arise with your plan to transfer property to your wife in order to avoid liability to creditors.

It is possible that the law will not consider the property to only belong to you in the first place. This is because the law presumes that anyone who has worked towards and supported their spouse in property ownership (ie helping to pay the mortgage, or being a stay at home parent, cooking, cleaning and supporting their spouse) may be entitled to a share of the property even if the property is not in their name. This is what is called a “constructive trust” and it means that transferring it to your wife may not protect your house from the creditors as you will still be deemed by the law to own part of it. In addition, there are financial implications to transferring property to another person. The first is that you will have to pay stamp duty on the transfer, which will be calculated on the value of the property. This can be quite costly, so it is something to keep in mind. There are also potentially capital gains tax consequences. Besides, transferring the property may not end up helping you: evenif you transfer your property to someone else, a lender may still require that the house is security to any loan or that the legal owner of the house acts as guarantor for the loan. As you probably already know, asset structure and financial planning is a complex issue, so it is important that you contact a solicitor. They will help you figure out what is the best way to protect your assets in the event your start up is unsuccessful. It is important that you know exactly what risks you are taking, and a lawyer can help with this.