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Creating the right environment for start-ups

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Creating the right environment for start-ups

Proposed amendments to the employee share scheme provisions for start-ups.

On 14 October 2014, the Honourable Bruce Billson, the Honourable Tony Abbott and the Honourable Joe Hockey issued a media release titled "Encouraging employee share ownership and entrepreneurship".

The position of the Government in respect of the application of the employee share scheme (ESS) provisions to start ups has been long awaited, with it being seen as fundamental to the innovative nature of start-up companies, and the need to ensure that they retain a work environment that fosters new ideas.

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Sladen Snippet - Withdrawing a benefit provided under your enterprise agreement may contravene your “no extra claims” clause

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Sladen Snippet - Withdrawing a benefit provided under your enterprise agreement may contravene your “no extra claims” clause

A Victorian water authority was found to have contravened the no extra claims clause in its enterprise agreement, in a decision handed down by the Fair Work Commission (FWC) last week. The authority made changes to a vehicle policy which provided some employees with limited private use of work vehicles.  The enterprise agreement itself contained no provisions dealing directly with the provision or private use of motor vehicles.

Contracting Liability Exposed - The contractor / employee enigma

Contracting Liability Exposed - The contractor / employee enigma

The decision over whether to engage employees or contractors in business is a complex problem that many struggle over. This article highlights a case that illustrates how getting it wrong can evoke dire consequences.

In 2013 the case of Ace Insurance Ltd v Trifunovski came up before the Federal Court. This case dealt with a claim by five insurance agents, who asserted that they were engaged as employees and not contractors. Their payment terms were on a commission basis from premiums they had collected. Each agent carried out their respective duties using their own car, and engaged their own secretarial support. The agents also issued tax invoices for their services and each agent was contracted to the insurer through a company. The insurer deemed them to be contractors, and didn’t pay them any leave entitlements.

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Sladen snippet – Recent successes with excess contributions

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Sladen snippet – Recent successes with excess contributions

Sladen Legal had two recent successful applications to disregard or reallocate excess non-concessional contributions, with the result that significant excess contributions assessments were extinguished or reduced to a nominal amount.

In the first case the client inadvertently triggered the bring forward rule by paying what she thought was an insurance premium, but was in fact a contribution to a retail superannuation fund (that in turn funded an insurance policy held by the fund). The client also made a $150K non-concessional contribution in that year followed by a $450K in the following year (causing excess non-concessional contributions of over $150K). The Commissioner of Taxation agreed that special circumstances existed and agreed to reallocate the “insurance” contribution to the second year reducing the excess contributions tax from over $70K to approximately $1,500.

Read The Trust Deed: Pope’s Case - Unpaid Present Entitlement and Bad Debt Deductions

Read The Trust Deed: Pope’s Case - Unpaid Present Entitlement and Bad Debt Deductions

A recent case in the Administrative Appeals Tribunal (Pope v FC, known as Pope’s Case) is of interest to taxpayers and their advisers, with respect to the characterisation of unpaid trust entitlements (UPEs) as loans.

In this case, Deputy President Hack characterised amounts previously distributed to the taxpayer, Pope, from the Pope Family Trust, and remaining unpaid as being debt at the time, that the amounts were written off by the Pope as being bad. Pope had previously included the UPEs in his assessable income in the income years in which the distributions were made and sought to obtain a deduction for those UPEs when they were irrecoverable from the Trust.

Project DO IT Alert

Project DO IT Alert

A reminder that voluntary disclosures pursuant to the Australian Tax Office’s (ATO) “Project DO IT” initiative must be made before 19 December 2014. Having regard to the difficulties often encountered and the general time frames required to obtain necessary information sourced from offshore third parties, the time to prepare for, and draft, voluntary disclosures taxpayers considering making a voluntary disclosure pursuant to the Project DO IT program would be well advised to consider their eligibility for the Project DO IT initiative and begin their disclosure preparation as soon as practicably possible.

Schools, negligence, and liability for psychiatric injury: the Doulis case

Schools, negligence, and liability for psychiatric injury: the Doulis case

On September 5 2014, the Victorian Supreme Court ordered the State of Victoria to pay damages in excess of $1.2 million to a former teacher at Werribee Secondary College, after he sued in negligence for the school’s failure to prevent what became a debilitating psychiatric injury.

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Sladen Snippet – Power to correct errors on the PPSR

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Sladen Snippet – Power to correct errors on the PPSR

Justice Gleeson of the Federal Court of Australia has provided further clarification surrounding the power of the Registrar to correct errors on the Personal Property Securities Register (PPSR) in the case of SFS Projects Australia Pty Ltd v Registrar of Personal Property Securities [2014] FCA 846.

In this case, SFS Projects Australia Pty Ltd (SFS Projects) was assigned three security interests that were already registered on the PPSR. A mistake was made by the assignor who incorrectly changed the end date of the registrations, instead of changing the name of the secured party, to SFS Projects. If the error was not corrected, SFS Projects would be deprived of the benefits of a continuously perfected security interest under the Personal Property Securities Act 2010 (PPSA).

Unit trusts and superannuation – does the look-through approach exist?

Unit trusts and superannuation – does the look-through approach exist?

Based on the principle of the separation of legal entities, it would not be expected that the actions of the trustee of a unit trust (or other trust) would be imputed on its unit holders. But does that hold true under the superannuation system? For instance, can the actions of a unit trust trustee cause its unit holding superannuation fund trustee to breach the superannuation laws? Or, to put it more succinctly, does the “look-through approach” exist?

Is Your Business Name Really Protected?

Is Your Business Name Really Protected?

One of our clients recently rebranded her business, changing its name in the process. Her accountant had diligently registered a new business name for her. Unknowingly, she’d chosen a name that is similar to a competitor’s name – but different enough for ASIC to allow both registrations. Inevitably, the competitor threatened legal action.

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Sladen Snippet - No Restraint, No Worries

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Sladen Snippet - No Restraint, No Worries

APT Technology Pty Ltd (APT) won a rare injunction in the Federal Court last week, obtaining orders that prevented a former employee from soliciting or dealing with APT clients for five months, even though the employee was not subject to any contractual restraint of trade obligation.

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SMSFs Engaging in Property Developments

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SMSFs Engaging in Property Developments

This paper was presented by Phil Broderick on SMSFs Engaging in Property Developments, at the Ninth Annual SMSF Conference of the Television Education Network, on 4-5 September, 2014.

Self managed superannuation funds (SMSFs) have been carrying on property development activities ever since they came into existence. Yet despite that, there is still a common concern that such activities will cause the SMSF to become non-compliant, or subject to penalties, on the basis that such activities, and in particular undertaking a property development business, are prohibited.

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Sladen Snippet - ATO releases guidelines regarding professional firms

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Sladen Snippet - ATO releases guidelines regarding professional firms

New guidelines released by the Australian Taxation Office (ATO) will assess tax compliance risks associated with the allocation of profits from professional services firms operating in the accounting, architectural, engineering, financial services, legal and medical professions.

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Sladen Snippet - Proposed amendments to the Owners Corporation Act 2006 and the Sale of Land Act 1962

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Sladen Snippet - Proposed amendments to the Owners Corporation Act 2006 and the Sale of Land Act 1962

The Consumer Affairs Legislation Further Amendment Bill 2014 (Bill) is currently before the Victorian Parliament. The Bill seeks to amend several Acts, including the Owners Corporation Act 2006 and the Sale of Land Act 1962.

Superannuation funds and public trading trusts

Superannuation funds and public trading trusts

When superannuation funds consider structuring through, or investing in, another private entity, the choice is generally between a company and a unit trust. When the decision is made to invest in a unit trust, it is primarily made in order to take advantage of a unit trust’s “flow-through” nature under the current tax laws. However, this flow through nature will be lost if the unit trust is deemed to be a public trading trust.

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Why you need a mentor

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Why you need a mentor

Sladen Legal Principal, Meagan O’Connor, was recently interviewed as part of a discussion with Business Chicks about why you need a mentor, and how it might be the best thing for your career.

In this article (published in “Latte” - the Business Chicks magazine), Meagan discusses her outlook on mentoring in the workplace, and how the corporate world is becoming better structured to mentor women through their careers.

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Sladen Snippet - Transfer of Land Amendment Bill 2014 – proposed introduction of priority notices

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Sladen Snippet - Transfer of Land Amendment Bill 2014 – proposed introduction of priority notices

The Transfer of Land Amendment Bill 2014 (Bill) has been introduced to the Victorian Parliament. The Bill proposes a number of amendments, including provisions to facilitate the phasing out of paper certificates of titles in preparation for the introduction of electronic conveyancing system.

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Sladen Snippet - “Like the Titanic, it Sank Ignominiously” – Director jailed for breach of duties

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Sladen Snippet - “Like the Titanic, it Sank Ignominiously” – Director jailed for breach of duties

A South Yarra accountant was today sentenced in the Melbourne County Court to five years and eight months jail on charges relating to the loss of at least $67 million dollars of investors’ money in property investment schemes controlled by him.

Incorporating Superannuation into Estate Planning: Common Challenges

Incorporating Superannuation into Estate Planning: Common Challenges

This paper was presented by Phil Broderick at the Legalwise Seminar on Will Drafting and Estate Planning, held on 12 August, 2014.

Superannuation benefits do not automatically form part of a member’s estate upon the death of the member. As such, a member’s will cannot deal with their super benefits, unless the benefits are paid to the estate of the member.

Consequently, a person’s super benefits must be dealt with separately in the estate planning process. Rather than dealing with super in a person’s will the tools for dealing with super death benefits are binding death benefit nominations (BDBNs), reversionary pensions, and the control of the decision making process through the control of the super fund trustee.