Issue 34 - November 2006

• Company and business identifiers
• Business structures
• The obligation to make good
• Christmas parties and WorkChoices
• Client profile - McKillop Property

There are serious consequences for companies and business if they don't state their ACN or ABN Company and business identifiers

The Corporations Act 2001 (Cth) provides that a company’s Australian Company Number or ACN must be shown on all public documents so that the company can be properly identified.

For example, the company number (with the words “Australian Company Number” or “ACN" before it) must appear in clear print on the company’s letterhead, invoices, receipts, orders for goods and services, cheques, official documents and notices and documents lodged with the Australian Securities & Investments Commission.

The ACN is not required to appear on business cards, with compliments slips, machine produced receipts, including cash register receipts, packaging and envelopes or subsequent pages of a document where the ACN appears on the first page.

Penalties for breaching the requirements may result in fines, imprisonment or both.

The Act also provides that a company’s Australian Business Number or ABN may be used instead of the ACN if the last 9 digits of the ABN are the same, and in the same order, as the last 9 digits of the ACN.

The ABN is required, pursuant to the A New Tax System (Goods and Services Tax) Act 1999, to be stated on any invoices issued by a business (making an invoice a “tax invoice”) so that the recipient does not withhold tax at the top marginal rate from payments they make to the business.

If we can assist you in any company related matter, please telephone Craig Pryor or email craig@wmdlaw.com.au.

There are many issues to consider when structuring the establishment of a new business Business structures

When establishing a new enterprise, one of the first matters to consider is that of the appropriate business structure to adopt.

There are many options available (establishing a company, creating a partnership, operating through a trust whether discretionary, a unit trust or a hybrid trust, a combination of each or being a sole trader) and the choice of structure must be made after considering the pro’s and con’s of each option.

Such considerations include the ability to limit liability, minimise tax, allow income streaming, succession planning and general flexibility regarding the future sale of the business.

In order to determine the appropriate structure for you, your lawyer must first obtain an understanding of your needs in establishing the business and your long term plans for the business. Consultation with your accountant and financial planner is also necessary to ensure that the structure fits your needs. If the structure does not fit and needs to be altered at a later stage, unforseen stamp duty and taxation consequences (such as Capital Gains Tax) may arise.

If we can assist you in relation to establishing a new business or in relation to the breakdown of a business relationship or a dispute as to the conduct of a business, please telephone Dean Groundwater or Craig Pryor or email dean@wmdlaw.com.au or craig@wmdlaw.com.au.

It is important to properly consider the end of the lease The obligation to make good

It has been said that the make-good negotiations at the end of a lease are "akin to alimony disputes at the end of a marriage" in that when the relationship comes to an end, it is often that one (if not both) of the parties feels wronged and this often leads to bitter negotiations. Further, just the like break-up of a relationship, the rights and obligations of each party at the end of the lease are often not fully considered at the commencement of the lease because those rights and obligations will not eventuate until several years into the future and the parties are, at the beginning of the lease, usually on good working terms. However, throughout the course of the lease relationship, disputes about rent increases, repairs and disturbances can result in a bitter and confrontational relationship which then affects how the make-good obligations are performed.

It is usual for a commercial lease of retail, office or industrial premises to contain a "standard" make good clause which requires the lessee to restore the premises to their condition as at the commencement of the lease, subject to fair wear and tear. Often there are also provisions which state that the lessor may nominate any items of the tenant's fitout that do not need to be 'made-good' and that these items then become the property of the lessor.

However, there many aspects to the make-good obligations which should be properly considered and negotiated prior to entry into the lease, for example:
What is the state of the premises at the commencing date? Are the premises a "clean shell" or are there remaining components from a previous lessee's occupation of the premises? What evidence should be obtained in relation to the state of the premises?
Does the lessee have to return the premises as a "clean shell" or should it be agreed that some items of the lessee's proposed fitout will not be removed at the end of the lease?
Does the lessee have to redecorate at the end of the lease, and if so, to what standard?
If these issues are properly considered at the beginning of the lease relationship, then each party knows exactly where they stand and the end of the relationship, and its consequences can be much easier on all the parties.

If you would like some more information in relation to make-good obligations, please telephone Rebecca Flynn or email rebecca@wmdlaw.com.au.

Ensure your office Christmas party is a time for celebration Christmas parties and WorkChoices

Well, it's that time of year again when we advise our readers of the potential pitfalls of Christmas parties. We don't do this to take the fun out of Christmas, rather we want to see all our readers enjoy a fun and festive Christmas without affecting their employment relationship.

This year, owing to the commencement of the WorkChoices legislation there is an increased need for employees to ensure that they act appropriately. Although the laws regarding employee misconduct have not changed, the ability for a company who employs less than 100 employees to terminate the employment of an employee has been made easier.

In addition, employees of those companies no longer have the ability to make a claim for unfair dismissal and accordingly, employee indiscretions at a Christmas party may be the trigger for an employer to terminate an employment contract.

Employers need to ensure that they have considered all the potential hazards which may arise from an office Christmas party. The overriding concern of an employer must be the health and safety of employees. For example,
employers should ensure the venue of the Christmas party is safe by inspecting the venue prior to the party;
service of alcohol should be performed by qualified personnel;
the service of alcohol should be refused to a person who is intoxicated; and
even simple decorations such as mistletoe may lead to allegations of harassment or other unacceptable behaviour.
It is vital that employees attending the party are made aware of their responsibilities and what is considered appropriate behaviour. Employees should be informed that a Christmas Party is still a work activity and as such, normal disciplinary procedures apply. Employees should also be warned of the dangers of drink driving, particularly as employers may be held liable for injuries sustained by employees travelling home from the party.

These types of issues should be properly documented in an employer's employment policies. If you would like more information about employment policies, or you have a question in relation to an employer’s liability at Christmas parties or in general, please contact Kevin Dwyer or email kevin@wmdlaw.com.au.

New Southern Highlands real estate agency Client profile - McKillop Property

Ian and Cameron McKillop, clients of Warren McKeon Dickson, are part of the team at the newly established real estate agency McKillop Property, based in the Southern Highlands of New South Wales.

Ian and Cameron state that McKillop Property seeks to market the very best property in the Southern Highlands - rural, residential and commercial – and to offer great incentives to its clients including the benefits attached to m-club membership and the quarterly McKillop Report to keep their clients abreast of developments in the Southern Highlands market.

We wish McKillop Property every success in their new business. If you would like to contact McKillop Property, please visit www.mckillopproperty.com.au or call (02) 4878 5218.

If we can assist you in relation to any property matter, please telephone Rebecca Flynn or email rebecca@wmdlaw.com.au.

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