Raising Capital as a Small Business in Australia

By on 30 Apr, 2023

Funding is crucial for anew business to launch and for establishedbusinesses to grow. But how does it work? What options are available? who and where from? What are the limitations, obligations, compliances, and legal framework to observe? How to prepare for fund raising and what are the best practices? Understanding Capital Raising for Australian Private Companies Capital raising is a crucial process for any business, providing the necessary funds to fuel growth, innovation, and sustainability. For Australian private companies, navigating the complex landscape of capital raising can be challenging. This comprehensive guide will explore the various options available, the legal framework, and best practices for successfully raising capital. Capital raising refers to the process of obtaining funds to finance business operations, typically through equity or debt financing. Private...

ATO’s new WFH deduction rules

By on 21 Mar, 2023

ATO Introduces Changes to Working from Home Deductions for Australian Taxpayers On 3 November 2022, the Tax Office announced modifications and important changes to the way taxpayers can claim deductions for expenses incurred while working from home. The changes were published under PCG 2023/1, available here, and subsequently the accompanying Compendium, available here. The ATO stated that these alterations have been designed to better accommodate contemporary remote work arrangements. ATO Assistant Commissioner Tim Loh explained that taxpayers can choose between two methods to claim working-from-home deductions: the “actual cost” method or the “fixed rate” method. The fixed-rate method is the only one undergoing changes. The updated fixed rate method, which is applicable from 1 July 2022, can be used by taxpayers when calculating deductions for their 2022-23...

Shadow Directors

By on 17 Aug, 2022

What is a Shadow or De Facto Director and What are the Associated Risks? A shadow or de facto director is somebody whom the law deems to be a director due to the authority or control they exercise over a company. Shadow or de factor director is therefore someone who acts and exerts similar powers as a director but who has not been formally appointed and registered as the company director. We know the responsibilities and duties of appointed company directors, discussed at length in our previous article “Directors Duties in Australia”. However, an individual who has not been validly appointed as a director of a company may nonetheless be considered a director of that company if they have authority to the extent that the directors are regularly acting in accordance with the individual’s directions or requests. This article explains the circumstances by which the law may consider...

Holding Company Meetings

By on 15 Jul, 2022

Holding a company meeting? Here’s what you need to know There are two types of companies under Australian law refer to s45A CORPORATIONS ACT 2001 (Cth): proprietary or private companies and public companies. The fundamental difference between them is that a proprietary company can have no more than 50 non-employee shareholders and must not engage in any fundraising activity that would require the lodgement of a prospectus. A public company may have more than 50 non-employee shareholders and is allowed to engage in fundraising activities that require the lodgement of a prospectus. Only a public company can be listed on the stock exchange (ASX). Here we are focussed on proprietary or private companies incorporated in Australia. Following are the guidelines recommended to hold a private company meeting. Directors, or Officeholders, must consult their company constitutions to ensure...

Lost Trust Deeds

By on 10 Jun, 2022

What should you do if you have lost your Trust Deeds? A trust deed is a crucial document that sets out the explicit terms of trust arrangements and its governing rules, allowing a trustee to fulfill such a duty. Given the importance of the deed, a lost deed will create significant issues for trust and its trustee. Trustees have a fiduciary duty to keep the deed of the trust safe and familiarise themselves with the terms of the trust – see Hallows v. Lloyd (1888) 39 Ch D 686. Losing a trust deed is at the minimum a breach of the duty to keep the documents safe and potentially a breach of failing to act in accordance with the terms of the trust. Such a breach can potentially mean a trustee becomes personally liable. This article gives an overview of why it is important to safeguard the original trust deeds and what to do in circumstances of lost deeds. The most common scenarios we...