Undertaking work before being paid is a part of business. If you’ve been in business for a while you’ll know the difficulties that can arise in getting paid after the fact.
This is a situation where prevention is much better than cure. There are a number of steps that a business can take to greatly reduce the likelihood of payment problems arising.
Although it seems simple, the first is often overlooked. It is important to properly identify who your business is dealing with and to make an assessment of the creditworthiness of the entity you are contracting with. People and companies can enter into contracts, but nobody else. … Read More
The saying “the only constant is change” certainly applies to the law and legal practice generally. Laws and client needs are constantly changing.
To be an expert and effective solicitor, a lifetime of continuing legal education is required. In that context Everingham Solomons is very pleased to announce that Clint Coles has been awarded a Master of Laws degree by Sydney University.
The Master of Laws course conducted by Sydney University is without doubt one of the most rigorous and prestigious in Australia. Clint’s studies centered particularly upon commercial law subjects such as –
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- advanced rules for the drafting and interpretation of commercial contracts, the ability for terms to be implied into contract and the availability of juristic remedies in the case of ambiguity;
- personal and corporate insolvency including the roles of directors, proprietors, creditors and secured parties in insolvency;
- Australian business taxes particularly the major transaction taxes of capital gains tax, stamp duty, GST and the various carve outs and concessions;
- advanced study of the establishment and use of the commercial trust as a vehicle for business and investment, the regulation of managed investment schemes and the potential liability of trustees and beneficiaries,
- the rationale behind and implementation of the recently developed Personal Property Securities regime in Australia, its impact on borrowers and secured parties and its role in the leasing environment; and
- structuring strategies for asset protection in the estate and business planning context.
In our climate, effective air conditioning is usually very important to any lease of retail or office space. A recent Victorian Civil & Administrative Tribunal case highlighted the legal importance of properly documenting and then complying with air conditioning arrangements.
In this case the tenant operated a Pilates studio from a retail premises in Melbourne. When the lease commenced the parties agreed to insert a special condition to the effect that –
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- the landlord would install new air conditioning;
- thereafter it would be the tenant’s responsibility to maintain the air conditioning; but
- the landlord remained responsible for any capital repair costs.
I’m often asked by Landlords what’s the best form of security to take from a tenant?
The usual forms of security are one or more of the following: –
- Personal guarantee from directors or shareholders of a corporate tenant,
- Cash bond; or
- Bank guarantee
I generally recommend a bank guarantee.
A personal guarantee requires either a voluntary payment by the guarantors or for a landlord to sue the guarantors. Frequently, a personal guarantee proves to be ineffective because if the tenant can’t pay the rent there’s a good chance that the guarantor’s financial position may not be much better.
A cash bond involves the tenant actually paying an agreed amount of money as security for payment of the rent.… Read More
Every business relies on cash flow to survive. It matters not whether you have the best prices, products and/or customer service: if you don’t learn how to properly maintain cash flow, your business will eventually fail. By taking a proactive approach to debtor control you can improve your business’s cash flow and enhance its profitability.
Preventing Bad Debts
Ensure you manage the risk of bad debts by implementing a clear payment and credit policy. Consider:
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- Performing a credit check on potential debtors:-
- Consider having them sign a credit application form or credit agreement
- Conduct a pre-credit data check or/and ask for trade references
- Setting clear payment terms:-
Business relationships are like marriages. Some stand the test of time, others do not.
A company in which two or more unrelated parties are directors and shareholders is a very common structure. The parties involved usually know each other well and learn to accommodate each other’s idiosyncrasies for the good of the ongoing business. That frequently changes when business operators age or die bringing new people into the business.
The recent case of Advanced Fuels Technology v Blythe arose in that factual situation.
The company Advanced Fuel Technology (AFT) had operated for many years under the equal control and management of Mr Blythe and Mr Thompson.… Read More
Whilst a company structure generally protects directors from being personally liable to pay the company’s debts, this is not always the case. Further Directors may be fined personally by ASIC, or may have to pay the companies taxation liabilities such as PAYG or employee superannuation payments.
So, yes it is a good idea to have what is called a Deed of Access and Indemnity.
The deed is a contract between each director and the Company.
It gives the Directors access to the company’s records, payment of legal costs, and requires the company to affect directors and officers insurance, both during the director’s appointment and for a period of years thereafter.… Read More
Airbnb and other similar types of short-term accommodation are now very widely used in NSW.
This has been controversial particularly in strata title developments. The perception of “permanent” strata residents has been that short term occupancies are disruptive and sometimes actually damaging to strata property. This has led many strata developments to pass bylaws intended to prohibit short-term lettings which in many cases have been ignored by owners seeking to maximise rental returns from their properties. The issue has become whether strata developments can legally restrict short-term letting?
The NSW Department of Fair Trading view is/was that-
“Strata laws prevent an owner’s corporation restricting an owner from letting their lot, including short-term letting.… Read More
The heat has arrived in the North West and the countdown to Christmas is here. This is an opportunity for employers to review how their business deals with one of the biggest liabilities that sits on their books. It is of course annual leave.
The January period in the region for many industries and sectors is often the quietest month which in turn may or may not require a fully staffed workplace.
Under the National Employment Standards (NES) workers in full time employment are guaranteed a minimum four weeks annual leave per year or for some shift workers 5 weeks. If those minimum weeks of annual leave are not taken during the calendar year the residual leave not taken accumulates.… Read More
Up to the late middle ages, business was pretty steady. One family owned a cow, another owned a goat, there was mutual jealousy and so they were swapped. In time, money was used to facilitate more complex exchanges. All in all, relatively few people were involved and there wasn’t a huge need for capital.
Around the 1600s though, people started exploring the world. Trade followed exploration and trade was very profitable so naturally the great families of the era liked to keep it to themselves.
However, there were two essential problems:
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- firstly, intercontinental explorers were thin on the ground and trade required the wealthy to give some bold upstart a great deal of money and send him to some remote corner of the world; and
- secondly, trade exploration required a lot of capital and given the risks, often more than one family was willing to contribute on their own, so there was a need for joint investment from unrelated parties.