Top Tips from a Commercial Lawyer

The 5 mistakes business owners make that can derail their business and what to do to prevent it.

As commercial lawyers we see the same mistakes made by business owners time and time again, and most (if not all) of them are easily avoidable if they had been proactive about their business legals. We wanted to share with you some of these common mistakes and let you know how you can address them now, before they become costly mistakes.

1. They do not protect their intellectual

property…

The only way to stop someone else using your business name or logo is through registering a trademark.

If you are doing great work for your clients and people are recommending you – you do not want other people looking for you online and ending up connecting with (or worse still engaging) a competitor that is using your name or something deceptively similar. And yes, this happens all the time!

On the converse, you do not want to be inadvertently associated with a bad business. Imagine if you got a bad Google review for poor services but this was not even you. This could happen if a copycat starts using your name. These bad reviews are hard to remove and can damage your goodwill.

So, what can you do to help prevent this? Easy, register a trademark.

Registering your business name as a trademark gives you the widest form of protection, it stops anyone using your business name (in your designated classes of good and services).

The good news is that REGISTERING A TRADEMARK is relatively inexpensive and easy to do. A commercial lawyer with trademark experience can complete the registration on your behalf.

2. They do not have a contract in place

with their clients…

You cannot simply leave it to chance and trust that everyone you do business with will pay you. You need to have the law on your side and for that you need a contract with your client.

The amount of business owners we talk to who are owed considerable sums of money and who do not have terms of trade/terms and conditions is scary.

The easiest way to make sure you get paid is to have business terms and conditions attached to your client quotes. This then forms your contract with your clients.

If you already have terms and conditions, then have a good read of them and make sure that they contain robust clauses around late payment and enforceable limits of liability.

You should have a client agreement, and this is usually your quote and your terms and conditions attached.

Your contract with your client should include as a minimum the following clauses:

• Agreement regarding Price • Payment Terms • Your Refunds or cancellation policy • Your Ability to charge interest on late payment • Your Ability to charge Debt recovery costs • Termination provisions • Your suspension rights (e.g. for late payment) • No liability for delay • Disclaimers and limits of liability

If you are worried about your terms and conditions (or lack of them!) and want to know more grab our FREE GUIDE ON HOW TO GET PAID

3. They trust people who work for them

too much…

Sometimes you need extra help in your business but are not certain enough about the amount of work you can give someone to take on an employee. When this happens, you tend out to reach out to people you know to help you out.

This is all well until something goes wrong and you have no written agreement in place, and we see the costly aftermath of this a lot.

If you are a business owner who engages subcontractors, you need a well drafted subcontractors agreement in place because everything is fine… until it’s not. Here are some of the things you should have in a well drafted contractors agreement/subcontract:

• the subcontractor’s responsibilities • Workplace Health and Safety obligations • restraints of trade (to make sure they do not steal your clients or employees) • Dispute Resolution Procedures

If this is of concern to you there is more detail in this article on SUBCONTRACTOR AGREEMENTS

4. They trust people in business with

them too much…

Sometimes you rush into starting a business with friend or family member and do not think about what will happen if things go wrong.

There is a simple fix, a legal agreement. If you have a company this is called a shareholders agreement and if you are partnership (more rare) a partnership agreement.

All too often we see company directors/shareholders embroiled in costly disputes in circumstances when a shareholders agreement could have prevented unnecessary legal costs and disruptions. In fact, I will go out on a limb here and say that most successful businesses I deal with all have well drafted shareholders agreements in place.

A well drafted shareholders agreement should cover all the rules of holding shares in the business including:

• Appointment of directors and voting rights • Clauses dealing with rules on transfer of shares • Shareholders rights and obligations • Dispute resolution clauses • Restrictions on competition • Confidentiality

Click here for more information on SHAREHOLDERS AGREEMENTS and their importance.

5. They have completely the wrong

structure...

When first setting up a business, it is common to use a sole trader structure, as it is relatively easy and cheap to get your started. However, as your business grows, it is crucial that your business structure evolves with it.

One of the biggest benefits gained from structuring your business as a proprietary limited company is that you can protect your personal property (by keeping it separate from the business). As a sole trader you are personally liable for all business debts. You can incur debt and you can be sued, which means your personal assets are very much at risk. Changing to a company structure turns your business into a separate legal entity, meaning the company can sue and be sued. This limits your personal liability.

For more information read our article SHOULD I START AS A COMPANY OR A SOLE TRADER?

So, what can you do to protect your business? If you are concerned abut any of the above or if you have not confidently ticked all of these boxes above then we would love to take a deep dive into your business, asses the risks that you may have and come up with a strategy to get you better protected.

Click here for details of our unique 1 on 1 LEGAL AUDIT Typical Legal Disclaimer!…

Unfortunately, there is never a ‘one size fits all’ formula to apply. Every situation is unique and it can be tricky to wrap your head around some areas of the law. To ensure you are setting yourself and your business up for success, it is always best to consult a legal professional with expertise in the field.

If you require any assistance with with your business legals or any other commercial legal issue, please do not hesitate to contact me.

Helen Kay

07 5619 6858 www.riselegal.com.au

Why networking is like mortar for Building Women’s Construction Careers

Working in a male-dominated industry makes construction a particularly challenging sector for women, particularly when the media often misrepresents the roles women hold, whether it’s being on the tools or in the office. Networking with other women in the building industry helps overcome the sense of isolation – and helps women grow their careers too.

Jo Kirley, Recruitment Manager at Aussie Painters Network and Educational Committee member of Awesome Women in Construction (AWIC) says networking has been essential for her. Her work within the VET system would be “impossible” without the network of contacts she has developed in the building industry, she says.

“I call on my contacts all the time to get things done,” she says.

Jo became involved with AWIC because her other role as the partner of a tradie, doing all the office side of the business, she needed to be able to talk to other women experiencing the same difficulties. One of the major positives of networking for women is understanding they are not, in fact, alone, according to Rebecca Paech, AWIC Events Coordinator and Customer Service Manager at PGH Bricks and Pavers.

Sharing stories has enormous benefits, Rebacca says.

“It lets you know that what you are seeing and experiencing on site and in the office is real.”

Some of these experiences involve behaviours from male colleagues that show a level of internalised sexism.

“The perception is that we (women in the workplace) will unpack the dishwasher, for example,” Rebecca says.

“It is present on all levels of a business.”

Networking is a way to help overcome this, through sharing strategies, reality-checking and supporting other female colleagues.

The contacts in the industry gained through an organisation like AWIC are also one of the most valuable assets a woman in construction can have.

“If you are looking to progress your career or move out of the role you are currently working in, contacts help. There are so many stories of people connecting through AWIC and that helping them move to another role, for example,” Rebecca says. “A lot of people [in AWIC] know a lot of other people, and if you are not in that kind of loop, you can be left behind. It’s a very interconnected industry… so networking helps you get in the game.”

Rebecca has found networking has helped build her own confidence in career in the industry – and this is something she has also been able to pass on to her daughter, who is looking at carpentry as a post-school career choice.

Jo says that when she is working with female apprentices who are facing challenges, connecting them with a female employer really helps.

“Female apprentices often feel more comfortable talking about what is going on for them to a female employer,” she explains.

For female apprentices and tradies who have a male boss, AWIC can provide a space to “simply be heard”, Jo says.

“I feel it’s important for employers to encourage their female employees to be part of AWIC. The support that is there is so valuable. Sometimes you just need to vent to a female person who understands how stressful your job is – somebody on the same level, who can offer advice if you want it.”

“Sometimes you don’t need advice – you just need someone to listen.”

Rebecca has found the events organised by AWIC including workshops and keynote speakers have also provided some excellent tools for her work and helped grow her capabilities.

The social aspect can also be extremely important.

“We are social beings. Humans like to talk; we like to communicate. It is good to be able to talk about having an [awful] week or the juggle of kids and getting them to soccer, or finding time to cook, that kind of thing. With AWIC, there is no judgement, it’s the sisterhood.

“The network makes you feel like you are being supported, the struggle is acknowledged.”

The general conversations are also an effective way to be aware of what is happening more broadly in the industry, outside of one’s own company or trade. For example, when there are major changes happening such as proposed reforms, legislation, programs or policies, the topics also come up quite naturally during casual chats at events.

Rebecca says that because everyone is facing issues specific to their company or trade sector or professional role type, there Is also a chance to swap notes and learn about the issues others are facing and how they are navigating them.

In Queensland residential construction, for example, supply shortages are currently affecting many builders and subcontractors. Fabricated metal components, PVC pipe and structural timber framing, for example, have been hard to come by due to COVID-19 impacts on international shipping. That has affected the ability of builders to get projects to lock-up stage.

For PGH Bricks, the shortage of key materials such as framing has a flow-on effect for orders of bricks for completing brick veneer walls.

“It is important for me to get those insights [from others] for my team.”

For more information about Awesome Women in Construction (AWIC) visit www.awic.org.au or email hello@awic.org.au

Your Keys to the 2021/22 FEDERAL BUDGET

Every year, with great fanfare and pride the Australian Treasurer presents the budget for the year ahead. We’ve had a close look at the details in this 2021 Budget for you. Highlights are covered below as they relate to individuals, businesses and superannuation.

This is not a complete list by any means, for a detailed overview visit our website, where you can find details on the following proposed budget measures: • Increasing the Medicare levy low-income thresholds • Modernising the individual tax residency rules • Reducing compliance costs for individuals claiming self-education expense deductions • Employee Share Schemes • Digital economy strategy • Debt recovery for small business • Tax treatment of qualifying storm and flood grants • Age limit for downsizer contributions • Residency requirements for SMSFs • Changes to the First Home Super Saver (‘FHSS’) scheme

It is important to remember that although these measures are in the budget, it may take some time to implement them. Furthermore the Government reserves the option to back date any measure’s effectiveness to budget day.

1. Personal Income Tax Changes

Retaining the Low and Middle Income Tax Offset (‘LMITO’) for the 2022 income year.

The Government has announced that it will retain the LMITO for one more income year, so that it will still be available for the 2022 income year. Under current legislation, the LMITO was due to be removed from 1 July 2021.

The LMITO is a non-refundable tax offset that provides tax relief for low and middle income taxpayers and is available in addition to the Low Income Tax Offset (‘LITO’).

The LMITO is proposed to apply as follows for the 2022 income year.

The LMITO is a non-refundable tax offset that provides tax relief for low and middle income taxpayers and is available in addition to the Low Income Tax Offset (‘LITO’).

The LMITO is proposed to apply as follows for the 2022 income year.

Consistent with current arrangements, the LMITO will be applied to reduce the tax payable by individuals when they lodge their tax returns for the 2022 income year.

In the prior year (2020/21) Federal Budget, the Government announced amendments to allow businesses with an aggregated turnover of less than $5 billion to access a new temporary full expensing of eligible depreciating assets until 30 June 2022. Temporary full expensing became law when Treasury Laws Amendment (A Tax Plan for the COVID-19 Economic Recovery) Bill 2020 received Royal Assent on 14 October 2020.

In the 2021/22 Federal Budget, the Government has announced that temporary full expensing will be extended by 12 months to allow eligible businesses with aggregated annual turnover or total income of less than $5 billion to deduct the full cost of eligible depreciable assets of any value, acquired from 7:30pm AEDT on 6 October 2020 and first used or installed ready for use by 30 June 2023. All other elements of temporary full expensing will remain unchanged, including the alternative eligibility test based on total income, which will continue to be available to businesses.

Temporary loss carry-back extension

In the prior year (2020/21) Federal Budget, the Government announced amendments to introduce a temporary loss carry-back measure. Broadly, this initial measure allowed ‘corporate tax entities’with an aggregated turnover of less than $5 billion to carry back tax losses made in the 2020, 2021 and/or 2022 income years to claim a refund of tax paid (by way of a tax offset) in relation to the 2019, 2020 and/or 2021 income years. The rules relating to the temporary loss carry-back regime have been enacted and are contained in Division 160 of the ITAA 1997.

In the 2021/22 Federal Budget, the Government has announced that the loss carry-back measure will be extended to allow eligible companies (i.e., with aggregated turnover of less than $5 billion) to also carry back (utilise) tax losses from the 2023 income year to offset previously taxed profits as far back as the 2019 income year when they lodge their tax return for the 2023 income year.

Consistent with the current law, the tax refund available under this measure is limited by requiring that the amount carried back is not more than the earlier taxed profits and does not generate a franking account deficit. Companies that do not elect to carry

Removing the work test for voluntary contributions

The Government has announced that it will allow individuals aged 67 to 74 years (inclusive) to make or receive non-concessional contributions (including under the bring-forward rule) and salary sacrifice contributions without meeting the work test, subject to existing contribution caps.

Individuals aged 67 to 74 years (inclusive) will still have to meet the work test to make personal deductible contributions.

The measure will have effect from the start of the first income year after Royal Assent of the enabling legislation, which the Government expects to have occurred prior to 1 July 2022.

Currently, individuals aged 67 to 74 years (inclusive) can only make voluntary contributions (concessional and non-concessional) to their superannuation fund, or receive contributions from their spouse, if they satisfy the work test (subject to a limited work test exemption). Generally, to satisfy the work test, an individual must be working for at least 40 hours over a period of not more than 30 consecutive days in the income year the relevant contribution is made.

Removing the requirement to meet the work test when making non-concessional or salary sacrifice contributions will simplify the rules governing superannuation contributions and will increase flexibility for older Australians to save for their retirement through superannuation.

Removing the $450 per month threshold for Superannuation Guarantee (‘SG’) eligibility

The Government will remove the current $450 per month minimum income threshold, under which employees do2. Changes Affecting Business Taxpayers

Temporary full expensing extension

In the prior year (2020/21) Federal Budget, the Government announced amendments to allow businesses with an aggregated turnover of less than $5 billion to access a new temporary full expensing of eligible depreciating assets until 30 June 2022. Temporary full expensing became law when Treasury Laws Amendment (A Tax Plan for the COVID-19 Economic Recovery) Bill 2020 received Royal Assent on 14 October 2020.

Temporary loss carry-back extension

In the prior year (2020/21) Federal Budget, the Government announced amendments to introduce a temporary loss carry-back measure. Broadly, this initial measure allowed ‘corporate tax entities with an aggregated turnover of less than $5 billion to carry back tax losses made in the 2020, 2021 and/ or 2022 income years to claim a refund of tax paid (by way of a tax offset) in relation to the 2019, 2020 and/or 2021 income years. The rules relating to the temporary loss carry-back regime have been enacted and are contained in Division 160 of the ITAA 1997.

In the 2021/22 Federal Budget, the Government has announced that the loss carry-back measure will be extended to allow eligible companies (i.e., with aggregated turnover of less than $5 billion) to also carry back (utilise) tax losses from the 2023 income year to offset previously taxed profits as far back as the 2019 income year when they lodge their tax return for the 2023 income year.

Consistent with the current law, the tax refund available under this measure is limited by requiring that the amount carried back is not more than the earlier taxed profits and does not generate a franking account deficit. Companies that do not elect to carry back losses under this measure can still carry losses forward as normal.

3. Superannuation Related Changes

Removing the work test for voluntary contributions The Government has announced that it will allow individuals aged 67 to 74 years (inclusive) to make or receive non-concessional contributions (including under the bring-forward rule) and salary sacrifice contributions without meeting the work test, subject to existing contribution caps.

Individuals aged 67 to 74 years (inclusive) will still have to meet the work test to make personal deductible contributions.

The measure will have effect from the start of the first income year after Royal Assent of the enabling legislation, which the Government expects to have occurred prior to 1 July 2022.

Currently, individuals aged 67 to 74 years (inclusive) can only make voluntary contributions (both concessional and non-concessional) to their superannuation fund, or receive contributions from their spouse, if they satisfy the work test (subject to a limited work test exemption). Generally, to satisfy the work test, an individual must be working for at least 40 hours over a period of not more than 30 consecutive days in the income year the relevant contribution is made.

Removing the requirement to meet the work test when making non-concessional or salary sacrifice contributions will simplify the rules governing superannuation contributions and will increase flexibility for older Australians to save for their retirement through superannuation.

Removing the $450 per month threshold for Superannuation Guarantee (‘SG’) eligibility

The Government will remove the current $450 per month minimum income threshold, under which employees do not have to be paid SG contributions by their employer.

The measure will have effect from the start of the first income year after Royal Assent of the enabling legislation, which the Government expects to have occurred prior to 1 July 2022.

If you need any support with your year end tax planning, call us on 3399 8844 and we will be happy to help you with a FREE Tax Planning Session. You can visit our website at www.straighttalkat.com.au and complete your details on our Home page to request an appointment.