Directors Duties in Australia

By on 19 Dec, 2020

Overview of Directors There are many different types of directors, such as executive and non-executive directors, managing director, independent directors, shadow directors, alternate directors, de facto directors, and nominee directors. In this article, we will address directors of Australian small-medium companies, who are registered as Office Holders with the Australian Securities and Investment Commission (ASIC), often referred to as De Jure Directors, especially in the UK and US. As a director, you must govern a company on behalf of the shareholders and ensure that a company operates at the highest possible standards and complies with the relevant governing legislations. Australian companies are primarily governed by the Corporations Act 2001 (Cth) and regulated by ASIC. ASIC is responsible for bringing civil or criminal proceedings against companies, the directors, and the...

Thinking SMSF: Part 1/2 – RISKS and BENEFITS

By on 15 Sep, 2020

A Self-managed superannuation fund (SMSF) is a private super fund that you manage yourself for the purpose of providing retirement benefits. It can have up to four* related or unrelated members who are also the trustees of the fund. Managing own SMSF provides the Trustees control over the choice of the investments and insurances, as well as the responsibility for the funds’ compliance. While having control over your own super can be appealing, there are strict and complex rules to follow and comes with risk.  SMSFs are regulated by the Australian Taxation Office (ATO) and governed under different provisions, regulations and legislation. The overriding legislation is the Superannuation Industry (Supervision) Act 1993 (SIS Act), while the payment of taxes is governed under the Income Tax Assessment Act 1997 (ITAA 97). In addition, as an SMSF is a trust, the general law of trusts...

Thinking SMSF: Part 2/2 – DOS and DON’TS

By on 14 Sep, 2020

In Part 1 of THINKING SMSF – RISKS AND BENEFITS, we discussed the rules and regulations governing the management of SMSFs as well as the associated risks and benefits of owning and managing your SMSF. In this part, we will cover the common mistakes we see, with a summary of trustees most common do’s and don’ts.   Do Seek proper advice on whether SMSF is for you. See a qualified professional to assist and guide you in setting up the structure and the fund, register your fund ABN, TFN, formulate an investment strategy, and plan an exit strategy.Set up SMSF bank account and an electronic address.Conform to the superannuation and taxation laws, the Sole Purpose test per s62 SIS Act, inform the ATO of any changes to the fund, submit the SMSF’s annual tax returnsMaintain and keep your personal assets distinct and separate from the fund, as well as those of the individual or...

Employee or Contractor? An important distinction

By on 17 Aug, 2020

I often hear businesses questioning whether they should hire a worker as an “employee” or a “contractor”, and what the different implications are. Income Tax Assessment Acts 1936 and 1997 are both silent on the definition of an “employee”. To determine the nature of a relationship, the common law and ordinary meaning of an employee are applied. The general concept derived from the common law is that the relationship between an employer and employee is a contract of service, however, the association between an employer and an independent contractor is a contract forservice. An important distinction. The Commissioner of the Taxation Office explains in the Superannuation Guarantee Ruling SGR2005/1 that when an individual is considered to be an “employee” under s12 of the Superannuation Guarantee (Administration) Act 1992. SGR2005/1 discusses different measures the courts have considered...