You’ve probably seen it on Facebook: a friend letting it all out in a post about their frustrations at work, usually followed by an outpouring of support from friends in the comments section. Sometimes the author of the post will name the employer, or even call them names. But is publicly criticising your boss legal? Could it get the employee dismissed?
This article will look specifically at media posted outside the course of employment, and made on a staff member’s personal device. In particular, we’ll look at the consequences of employees publicly criticising their employer. 
Can Employees Be Dismissed For Posting Negative Comments About Their Workplace?
Employees can be dismissed in certain circumstances. In Australia there is no direct right to freedom of speech. 
There is, however, an implied right to political expression in our constitution. This right has to be balanced with impartiality that certain employees must show, in particular government employees. As well as this, employees must not bring their employer into disrepute or violate any hate speech laws.
Private Sector Employees
In the 2012 Linfox case, a staff member working for a private company (Linfox, a transport company) complained on his Facebook about two of his managers. He made negative comments about them, and was dismissed as a result. 
The employee successfully argued this was unfair dismissal, with Fair Work ruling the employee should be paid compensation for lost wages and get his job back. 
Some key issues that were taken into consideration by Fair Work were:
The staff member believed his Facebook was set to a ‘friends only’ privacy setting and could only be seen by a limited number of peopleThe employee did not fully understand how Facebook works (in 2020, this will be harder to argue!)There was no workplace social media policy His posts were seen as within his right to free speechHe had worked at Linfox for over 20 years and did not have previous problematic behaviour
Public Servants
In another recent case in 2019, the decision to dismiss a public servant who sent anonymous tweets criticising her employer (the federal government) was upheld. The employee’s tweets were mostly sent outside of work hours, from her own device and were under a pseudonym. 
Even though her tweets were anonymous, her dismissal was upheld as her tweets went against the public service code of conduct which stipulated employees must avoid conflicts of interest, and uphold the integrity and good reputation of their employer. 
The employee was at first successful at the Administrative Appeals Tribunal in arguing this went against her right to freedom of political communication. However, the High Court disagreed with this, and found these tweets did breach the public service code of conduct and that the response of dismissal was commensurate. 
The public service sector also has a strong social media policy, aimed at protecting the public’s trust.  According to this policy, trust in the Australian Public Service can be influenced by the employee’s seniority, the connection between the social media post and staff member’s work, and how ‘extreme’ their view is.
In a case in 2015, a Centrelink employee made regular posts to complain about dealing with Centrelink customers. The posts were anonymous, though he identified himself as a Centrelink employee. The employee was fired for breaching the APS Code of Conduct and for causing reputational harm to Centrelink, but then reinstated by Fair Work. 
Fair Work took into account:
That the employee did not deliberately try to bring Centrelink into disreputeThat there was not enough evidence to show Centrelink’s reputation was damaged by the employeeHow long the employee had been employed and past behaviourHow challenging it would be for the employee to find a new job
Can An Employee Be Dismissed For Any Other Types Of Posts?
Yes, they can. Employees can and have been dismissed for posts that don’t criticise their employer, but are otherwise offensive. 
Some posts may be violent in their nature and directed at a person, or incite hatred against a person or group because of their race, ethnicity, gender, sexual orientation, religion, disability, or other factor. 
So, can you fire someone even if it’s not political or about work, but because they’ve demonstrated that they’re a bit of an unsavoury character? Understandably, even if the post is not connected to work, the person is, and this can bring your business into disrepute.
In 2015, a supervisor who worked at Meriton posted sexist and violent comments on Clementine Ford’s social media account. Once Meriton was made aware of this, they promptly dismissed the employee, and informed the target of the sexist attacks that they did not condone the employee’s behavior. This is an example of a dismissal based on social media posts bringing an employer into disrepute. 
In some cases, a post may violate the law. There is a ton of legislation aimed at making hate speech illegal. For example, there’s the Racial Discrimination Act (Cth) or s93 of the Crimes Act NSW, which outlaws intentionally or recklessly threatening or inciting violence against another in a public act based on another’s sexual orientation, gender identity, intersex status, religious belief, race or HIV or AIDS status. A ‘public act’ includes social media use.
Why It’s Important To Have A Social Media Policy
Social media should be broader than just Facebook and Twitter. Having a policy will firstly make clear what you mean by social media, and then clarify what conduct is acceptable. 
It is important to sensitively balance the rights of your employees to use social media to express themselves with the need to protect your business’ reputation. This will be different for private companies than it will be for public servants. 
In 2015, an SBS sports reporter was fired for posting negative comments about Australian soldiers on ANZAC day. The reporter filed a claim that he was dismissed unfairly due to expressing his political views. Interestingly, his employer argued this was not the reason, rather it was his breach of the social media policy and code of conduct which led to his dismissal.
Key to the decision in Linfox to give the employee his job back was the fact that there was no social media policy. Having a well written social media policy that your staff are aware of will make unfair dismissal based on social media use more difficult. 
In Summary
Employers may have a right to dismiss staff who make posts on social media, even if anonymously, and even if it’s done on their own device outside of work hours. 
Some common reasons to dismiss employees based on social media use include breaching a social media policy or code of conduct, breaking a law through inciting hate speech, bringing an employer into disrepute or risking impartiality.
Employees might retaliate by lodging a claim with Fair Work for unfair dismissal if it is seen as too harsh or unreasonable. We strongly recommend you seek legal advice before deciding to terminate a staff member’s employment. Feel free to reach out to Sprintlaw’s expert employment team on 1800 730 617 or [email protected].
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An Enterprise Bargaining Agreement is a contract which makes changes to employment terms and conditions and is between an employer and employee/s. 
Enterprise Bargaining Agreements are a type of ‘registered agreement’ which can be negotiated. This type of negotiation is called ‘collective bargaining in good faith.’ 
Good faith, in this context, means bargaining representatives should:
reasonably attend meetingsdivulge necessary informationconsider and reply to proposals put forward by othersback up responses to proposals with reasonsrespond in a timely fashionnot frustrate collective bargaining process or freedom of association not act in an erratic or unreasonable manner
The parties involved in bargaining the agreement are the employer, employees and, if the employee chooses, employee bargaining representatives. These representatives can be an organisation such as a trade union, or a person, such as someone who will be covered by the Enterprise Bargaining Agreement or the employee can choose themselves. 
After the agreement has been negotiated, a draft Enterprise Bargaining Agreement is given to all employees affected. The employees then vote on whether or not they agree to the agreement.
The agreement is then sent to the Fair Work Commission which must approve the agreement for it to become effective.  Enterprise Bargaining Agreements are highly regulated by the Fair Work Commission and have many minimum standards that must be met. The Fair Work Commission can also assist if there is a dispute in the negotiation process.
What Are The Types Of Enterprise Bargaining Agreements?
Enterprise Bargaining Agreements can be made before or after employment occurs. For example, a Greenfields Agreement is made before employees are employed, between the employer/s and an employee association, such as a trade union.
If an employee or group of employees is already employed, the type of Enterprise Bargaining Agreement they would enter into is called either a Single-Enterprise Agreement or a Multi-Enterprise Agreement.
What Is In An Enterprise Bargaining Agreement?
Wondering what needs to be included in an Enterprise Bargaining Agreement? Well, here’s our breakdown. 
The date of termination of the agreement must be included. This date can’t exceed 4 years from when the Enterprise Agreement was approved by the Fair Work Commission.
The Enterprise Agreement must set out how disputes are handled and allow an independent third party or the Fair Work Commission to settle disputes regarding National Employment Standards or modern award terms.
There must be a term for creating individual flexibility arrangements so that the Enterprise Agreement can be varied for individual employees who need it.
Lastly, the Enterprise Bargaining Agreement must make scope for consultation between the employer and employees where there are changes in the workplace likely to have a significant effect on staff. 
You Should Look Out For…
Look out for Enterprise Bargaining Agreements that contain unlawful terms. If an Enterprise Bargaining Agreement contains unlawful terms, the Fair Work Commission will not approve it. 
For instance, these agreements should never contain any discriminatory terms or terms that contradict the National Employment Standards, industrial action provisions or the Fair Work Act. 
The Enterprise Bargaining Agreement cannot leave an employee’s pay worse off than what is covered by their modern award. The agreement must leave the employee ‘better off overall’, which the Fair Work Commission will also examine. 
Why Do Employers Have Enterprise Bargaining Agreements?
Enterprise Bargaining Agreements can boost productivity, while providing more flexibility for both the employer and employee. 
Drilling down to finer details, an Enterprise Bargaining Agreement can improve flexibility for staff and employers in the following ways:
Flexible rosters and working hoursWidening an employee’s job classificationJob sharingBetter arrangements for employees who have family/care responsibilitiesCareer breaksSimplifying the Modern Award provisions to make it easier for both the business and employees to understand their rights and to make compliance with the Modern Award more straightforward.
Other benefits are new training and thus job opportunities, efficiency goals, better service delivery, and better employee grievance procedures. 
Employee Bargaining Agreements provide a chance to be tailored to the specific needs of your staff, helping you hear and understand how productivity can be increased and what your staff need for a functional workplace. This gives you a valuable insight into your staff, and sets a positive and egalitarian tone for a style of communication that is between equals.
The Takeaway
If you’re looking to encourage innovation, productivity, and happier staff then an Enterprise Bargaining Agreement is a great start. Contact our expert employment lawyers for a consult on 1800 730 617 or [email protected].
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If you’re a member of the public looking to invest in some shares, you might be interested in purchasing shares through an IPO at a set price before the shares are listed on the stock exchange. If you’re a business wanting to raise capital and your profile at the same time, you might choose to go through an IPO.  
What Does IPO Stand For?
IPO stands for ‘initial public offering’. An IPO is the first sale of shares to the public a company makes and can sometimes be called a ‘float’. 
In Australia, an IPO gives investors the opportunity to buy shares at a certain price before they trade on the ASX. Investors can check out the prospectus of companies they may want to invest in on ASIC’s notice board and see any upcoming listings on ASX’s website here.
What Is The Process For An IPO?
An IPO is used when a company first decides to go public. Prior to an IPO, the company would have been a private company and used other methods of capital raising with limited shareholders. (Think angel investors, raising capital with friends and family, etc). To qualify for an IPO, a company usually must have a certain profit or value potential or already be highly valued. 
The process of an IPO consists of the pre-marketing phase, and the actual initial public offering.
The company hires an underwriter and a team of professionals such as lawyers and accountants to undertake the process. The underwriter prepares documentation, does due diligence, and proposes what the price of the shares should be, how many shares should be offered and on what date. 
Once documentation is prepared, marketing takes place. A prospectus is lodged with ASIC, then the formal listing of the shares is lodged with the ASX. The ASX then approves the application for the IPO, opens the offer for a period of weeks and then closes it.
You can find out more about the process and time lengths on ASX’s website here.
Once an IPO occurs, existing shares become the same value as the IPO price. Many existing shareholders may sell their shares at this point. 
Why Go Through An IPO?
Companies may choose to have an IPO because of the huge capital raising opportunity an IPO presents. An IPO opens up investment to the public, and increases visibility through the marketing stage that occurs before the IPO.
Other advantages include more straightforward share conversions and valuations, the potential to raise more funds after the IPO through further public offerings and availability of ESOPs for staff.
Some disadvantages are the cost and therefore risks of running a public company, the onerous reporting obligations of a public company, and less control as there are more shareholders with voting rights. Given the high cost of an IPO, if your company is thinking of going through an IPO, you may be interested to know the ASIC has, as of August 2020, relaxed regulatory rules to make this easier and cheaper.
For shareholders, an IPO might be the opportunity to invest in shares at a set price before they hopefully rise on the ASX. On the other hand, as IPOs occur for new companies, it might be a while until the investor sees dividends.
What Next?
If you’re curious about the best form of capital raising for your company, feel free to reach out to our corporate lawyers for a consultation. You can contact Sprintlaw on 1800 730 617 or at [email protected] for a free chat.
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Businesses that support charities have long provided incentives for the socially conscious to purchase their goods or services. From ‘Thankyou’ water to Ronald McDonald House Charities — businesses that partner up with or donate to charities are able to fulfil a meaningful cause, bring awareness to causes they are passionate about, differentiate their brand, and get kudos for being a business that cares at the same time. 
Businesses can support charities no matter what their legal structure is.   
There are lots of businesses supporting charities the right way. But what about those that make false charity claims? Businesses can make false charity claims on purpose or by mistake. Businesses need to be really careful to ensure they are not misleading the public with their claims.
In this article, we’ll take a quick look at what the consequences are for making false charity claims.
How Are False Charity Claims Illegal?
False charity claims are illegal. They are a breach of Australian Consumer Law—in particular, the provision that a person must not ‘in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.’ False charity claims can also be an example of ‘unconscionable conduct’ (defined as conduct which is so harsh that it goes against good conscience).
As well as heavy financial penalties and reputational damage for businesses involved, false charity claims impact genuinely philanthropic organisations that are doing the right thing. 
Misleading and deceptive conduct encompasses a variety of behaviour, including non-intentional misleading and deceptive conduct. 
Examples Of False Charity Claims
One of the most famous examples of false charity claims is that of ‘The Whole Pantry’ which was a health food app and a book run by Belle Gibson. Gibson, the director and founder of the company, claimed she had overcome brain cancer through healthy eating. Gibson claimed much of her profits would go to various charities. 
Specifically, it was claimed that all profits for one week would be donated to charity, ticket sales to her app launch would be donated and, in the director’s words, ‘a large part of everything’ would be donated to charity. 
It was later revealed Belle Gibson had never had cancer, and had not donated most of the donations she had claimed to. 
The Consequences of False Charity Claims
Belle was found to be in breach of the ACL for misleading and deceptive conduct and unconscionable conduct. A key part of unconscionable conduct was Belle Gibson’s use of charities to further her business image, some of these charities involved seriously unwell and vulnerable children. 
The consequences for Belle Gibson were fines of $410,000, as well as an injunction restraining her from making claims that she had beaten cancer with healthy eating in connection with sales for her business.
More recently, an eyewear brand, Oscar Wylee, was fined $3.5 million for making false charity claims. As well as these fines, Oscar Wylee was ordered to pay part of ACCC’s costs and display on Oscar Wylee’s website how their conduct had been misleading.
These claims were that for every pair of glasses bought, one would be donated to charity, and that they were closely partnered with a charity. In reality, Oscar Wylee donated around one frame of glasses per 100 pairs bought, and had only made one donation to their supposed partnered charity 6 years ago. 
As well as misleading the public—who could have chosen a business which genuinely supported charitable causes—charities who expected to receive donations were let down. 
The Takeaway
If you’re thinking of helping out a charity, no matter how big or small your business’ contribution is, that’s a meaningful thing to do. However, it’s important not to make false charity claims, as this is illegal whether you mean to or not. It can harm consumer confidence, your brand and the targeted charities themselves. If you need more help on understanding your obligations under Australian Consumer Law, reach out to us on 1800 730 617 or at [email protected] for a free chat.
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What Are Examples Of Indigenous Knowledge?
Indigenous knowledge is a broad concept, and includes intellectual property covering traditional innovation, know-how, and skills in scientific, technical, medical, agricultural and biodiversity areas.
Indigenous knowledge also covers art and culture, such as visual symbols, architecture, languages, music, narratives and other forms of artistic expression.
Importantly, indigenous knowledge applies to past, current and developing knowledge.
How Is Indigenous Knowledge Protected?
Indigenous intellectual property has been, and often continues to be, inappropriately used without consent of the owner. 
Unfortunately, in Australia, there are no domestic laws specifically to counteract this. International law does have a principle of ‘free, prior and informed consent’ regarding indigenous knowledge from traditional owners. In reality, though, this is difficult to enforce.
It has been argued there are many shortcomings with the intellectual property rights system’s ability to protect indigenous knowledge. These problems include:
The method of protecting rights is too short term. For instance, a patent in Australia can last for 8, 20 or 25 years, depending on the type of patent.Individual ownership is overly emphasised, while indigenous knowledge can be owned by communities. The focus is on commercial transactions rather than protecting cultural expressions.Informal innovation is threatened.
You can read more about these shortcomings in this research paper.
When Might A Business Use Indigenous Knowledge?
Businesses might use indigenous knowledge without even realising it, or use knowledge without knowing that they should ask permission first.  Using indigenous knowledge without consent from the owners of this knowledge can result in some harmful consequences.
Like any owner of intellectual property, recognition and permission is key. Recent indigenous consultation with IP Australia found control, protection, recognition and respect of indigenous knowledge to be the top concerns of holders of this knowledge.
Here are some examples where businesses might use indigenous knowledge:
·  A Sydney soft drink business develops an icon for a trade mark that uses the Darug symbol/artistic motif for water.
·  A baker is inspired from going on a Gamilaroi guided tour of agricultural uses of wild wheat where the tour guide describes how to make a unique and tasty cake from a wild grain. The baker then sells and markets the cakes using the techniques the guide described.
·  A naturopath business wants to use traditional herbs known for their calming properties in Wilcannia country. The naturopath harvests these herbs and markets them for the same purpose they’ve been used for thousands of years.
·  A director running a dance company sees a Ylongu performance with a distinct and graceful pattern of movement he replicates in his theatre’s upcoming performances.
What Should You Do If You Want To Use Indigenous Knowledge In Your Business?
As well as respecting the owner’s invention and international law, your business will benefit from a positive reputation if you seek advice, permission and partnership with the owners of the intellectual property you wish to benefit from.
So, what practical steps can you take if you want to use indigenous knowledge in your business?
Many businesses are not aware that protocols exist in many industries to specifically seek permission to use indigenous knowledge. You should check what protocols apply in your industry.
Using the examples above, the soft drink business and dance company using indigenous art should start by following the protocol, “Australia Council for the Arts – Protocols for Visual Arts, Music, Writing, Performance and Media Arts”.
In Summary
There are no specific intellectual property laws for indigenous knowledge in Australia in 2020, but this is likely set to change. Even so, you should still seek consent before profiting from indigenous knowledge or using it in your business. If you want to have a chat with an intellectual property lawyer, feel free to get in contact with us on 1800 730 617 or [email protected].
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Franchising can benefit both the franchisor and the franchisee. For the franchisor, franchising means fast business growth, higher visibility, and more profit. For the franchisee, they can step into an already established brand, having a clear plan on how to run the business. 
In this article, we’ll run through the franchisor’s obligations to extend a term, as well as look at what franchisees can do as the end of a franchise term nears.
What Is A Franchise Term? Why Would It Be Extended?
A Franchise Term sets out how long the Franchise Agreement will operate for, as they normally run for a set amount of time. Both franchisors and franchisees will understandably want to extend the franchise term if business is going well. 
If for any particular reason either party wants to end the Franchise Agreement, they can choose not to renew the franchise term, or to terminate the franchise agreement. 
What Do You Need To Do To Extend A Franchise Term?
Before a franchise term ends, a franchisor must do the following:
Let franchisees know whether they will extend the franchise or begin a new franchise agreement. This is called an ‘end of term notice’.At least 6 months notice must be given, or if an agreement has only been in place for 6 months, at least 1 months notice must be given.When extending the franchise, an end of term notice must also disclose that the franchisee can have a copy of the disclosure document.
You can read more in general about what documents franchisors need from the beginning here.
What Are Disclosure Obligations?
You would have given a disclosure document to the franchisee at the beginning of your relationship. But what you may not know is, as a franchisor, you must also renew and maintain this disclosure document. Franchisees have a right to access a current disclosure document before renewing or extending their franchise agreement with you. Franchisees can ask for a disclosure document every year.
A disclosure document should include;
Information on legal proceedings against the franchisorWhether the franchisee is able to extend, renew or enter into a new agreement when the franchise agreement reaches its termFees the franchisee may have to payFinancial detailsContact details of franchisees, past and present   
Other Disclosure Obligations Franchisors Need To Comply With
According to the Franchising Code, there are additional mandatory disclosure requirements.
As well as providing the disclosure document:
Franchisors should get written confirmation from franchisees confirming they comprehend the disclosure document. Franchisors should give the franchisee a new copy of the franchise agreement, and Franchisors should give franchisees a copy of the Franchise Code.
What Happens If Franchisors Don’t Comply With The Code?
If franchisors don’t do the above, the ACCC can take enforcement action. A recent example of this involves popular franchisor Bob Jane. Bob Jane did not give written notice to franchisees whether they meant to extend the franchise agreement or begin new franchise agreements within the cut off time. 
Bob Jane also did not provide the necessary documentation under the code before extending agreements, and did not get written statements from franchisees. In this case, Bob Jane must now run a compliance program and is under a court-enforceable undertaking to observe the Franchise Code.
What Next?
If you are a franchisor, make sure you comply with the Franchise Code and provide the disclosure documents and get written confirmation from your franchisees that they understand your disclosure documents. It’s imperative you stay organised and submit and obtain paperwork by the deadlines according to the Franchise Code.
If you are a franchisee, remember you can request disclosure documents every 12 months and don’t need to wait for the franchisor to take the initiative.
If you are a franchisor or franchisee and need help understanding your obligations, don’t hesitate to reach out to us on 1800 730 617 or by email at [email protected]. We specialise in franchise law and can talk you through your situation. 
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If you’ve ever worked in real estate or a car dealership, you might be very familiar with sales commission. This means that employees are paid based on how well they perform in terms of sales. This can work in one of two ways:
Commission is paid in addition to their current wageCommission is paid by itself (makes up their whole wage)
As an employer, if you follow the first method, commission acts as an incentive for employees to work for a ‘bonus payment’. Generally speaking, this should be paid in addition to their wage and NES entitlements. 
The second method, however, is a bit more tricky. Here’s what you need to know. 
When Can I Pay My Employees Commission Only?
You cannot pay your employees commission only unless they’re under a modern award or registered agreement that allows you to do so. For example, under the Real Estate Award, employees can be paid commission only. This means they can be paid based solely on their sales performance, and the minimum wage does not apply. 
This is usually the case with industries like real estate because the company’s income is closely connected to sales and employee performance. Essentially, commission works as an incentive to make more sales and generate more income. 
For example, let’s say that Jack works in Real Estate and is currently under the Real Estate Award. He is not entitled to minimum wage, however he and his employer have a written agreement that he will be paid commission only. This means he gets paid according to how many sales he can make, and this is all set out in their contract. 
If Jack was working at a retail clothing store, however, this would not be the case. Jack would not be covered by the Real Estate Award and the company’s overall income is not as closely connected to his individual sales performance. As such, he would be entitled to minimum wage and commission-only payments would not be permitted. 
Are There Certain Requirements?
If you want to pay your employees commission only, you need to ensure that:
Their modern award allows them to be paid in this wayYour employment contract is consistent with commission-only paymentThere is a written agreement that sets out how the commission will be calculated and paid
You also need to ensure that your employee has a copy of this written agreement, so everything is clear from the outset. 
What Kind Of Written Agreement Do I Need?
The best way to set out a commission-based payment is to have an Employee Commission Agreement. It basically outlines the terms of payment and how it will be calculated, and is often given early in the employment relationship.
What About Contractors?
Contractors can also be paid commission only, and this needs to be set out in writing in the form of a Commission Agreement. However, it’s important to be aware of sham contracting. 
What Is Sham Contracting?
If an employer tries to make an employment relationship look like a contractor relationship to avoid certain obligations (such as superannuation and minimum wage), this is a sham contracting arrangement. To determine whether a sham contracting arrangement exists, a number of questions need to be asked. A recent case with Uber Eats workers dealt with this issue in depth—you can read about it here. 
Essentially, it’s important to know the difference between employees and contractors, so you can identify a sham contracting arrangement and ensure you’re not being exploited. This way, you can also determine whether you’re entitled to more than commission-only payments. 
As an employer, you need to ensure that you’ve established the correct legal relationships with your employees and contractors. This means fulfilling all your obligations to them and setting it all out in writing. 
Need Help?
The legal side of employment obligations can get a bit tricky. If you’re not sure whether your award permits commission-only payments or you’ve got some general questions about the employment relationship, have a quick chat with our team of lawyers!  You can reach out to us at [email protected] or contact us on 1800 730 617 for an obligation free chat.
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You may or may not have heard of the Personal Property Security Register (otherwise known as the PPSR). 
As a business owner, it’s important to know what the PPSR is, how it works and how it is relevant to your business.
Read on and we’ll break it down for you. 
The Purpose Of The PPSR
The PPSR is the official government register for security interests over personal property. 
The PPSR came into existence in 2012 under the Personal Property Securities Act 2009 (Cth).
The introduction of the PPSR removed all 35 separate registers that existed before 2012. Previous registers included state vehicle registers and the national ASIC Register of Company Charges. 
Now, the PPSR is your business’ one-stop, online shop to register your security interests. 
The purpose of having the PPSR is to let the rest of the world know that you have a registered security interest over certain personal property. 
Personal property includes: 
Cars and other motor vehicles such as a motorbike Boats and planesBank accounts, debts, commercial licences and intellectual property Shares, cash, chequesGoods (this includes rented or hired out goods) 
What personal property does not include is: 
Land BuildingsFixtures (for example, an oven or toilet in a house)
Registering a security interest on the PPSR allows others to search that security interest. This is particularly useful when a person is buying something off of another person or lending money. 
Checking the PPSR allows the purchaser to know that the personal property they are buying is debt-free, not stolen and has no other competing security interests. 
Let’s consider the example below. 
EXAMPLE: John is selling a car to Bill. Bill searches the PPSR to check that the car has no debt owing on it, it has not been stolen and it has not been written off. Fortunately for Bill, the car has no debt, has not been stolen and has not been written off. Bill purchases the car from John. Once he has purchased the car, Bill goes to register his security interest over the car on the PPSR.
Note: It costs $2 to search a registered security interest online. 
How Is The PPSR Relevant To My Business?
Understanding and utilising the PPSR can be vital to the optimal functioning of your business. 
According to the PPSR Business Guide, the PPSR is especially relevant to you and your business if you engage in: 
Wholesaling or selling on credit terms Hiring, renting or leasing out goods Are in the building, agriculture, automotive or supply industry  Buying and selling valuable second-hand goods or assets Raising finance using stock or other assets as collateral Selling art or other goods on consignment Consignment is where your business pays a seller for merchandise after the item sells
So, it is highly likely that the PPSR is relevant to you and your business. 
As a business owner it is important you understand the PPSR in order to protect your business and its security interests. 
The PPSR can help protect your business by: 
Providing information on whether the goods you wish to purchase are free from possible repossession and existing financial debt,Ensuring you get your goods or money back if a customer goes broke 
EXAMPLE You are considering purchasing equipment for your business. You search the PPSR to ensure that the equipment does not have money owing on it. Fortunately, there is no money owing on the equipment. You purchase the equipment. You then register a security interest over your purchased equipment on the PPSR. You decide to lease the equipment to Fred. Fred unfortunately goes broke.As you have a registered security interest over the property, you are in the best position to get the equipment back. 
I Have A Contract. Do I Still Need To Register My Security Interest On The PPSR?
Absolutely. 
Your contracts must always be backed up by registering your interest on the PPSR. 
You may have a contract in place with a retention of title clause that states that you remain the owner of the goods you lease to clients. In accordance with this clause, if your client goes broke, the equipment is to be returned to you.
Despite having a retention of title clause in your contracts, you still must register your security interest on the PPSR. 
While it is extremely important to have a contract in place with your clients, it is vital that you also register your security interest on the PPSR. This is so that you avoid somebody else registering a security interest over your property. 
Priority Rules 
Under the PPSR it generally stands that the first security interest to be registered on the PSSR is the first in line to have the goods or value of the goods returned to them. 
As such, an unregistered security interest loses out to a registered security interest on the PSSR. This is why it is so important to register your security interest! 
So, first in time = first in line. EXCEPT when it comes to a purchase money security interest (PMSI) 
Purchase Money Security Interests 
A PMSI exists when you have lent money or credit to another individual for the purpose of enabling them to acquire particular collateral. 
Common examples of a PMSI include: 
A secured property loan Where you enter into an agreement to lend money to enable the purchase of specific goods.Example: You lend money to Bill so that Bill can purchase a car. 
Supplying goods on credit Where you supply goods on credit terms with payment at a later date secured by the goods. Example: You lend equipment to Bill and he pays you back 30 days later. 
A PMSI may also arise through a lease, consignment or bailment of goods. 
To see if your security interest is a PMSI, click here. 
If you have a registered PMSI, then you gain super-priority. This means that even if you registered your security interest in the property last, you will jump ahead of the queue and be first to receive collateral or its proceeds. 
Be sure to determine whether or not you have a PMSI as it may result in you having super priority. 
How Do I Register My Security Interest On The PPSR?
To register a security interest you must set up a PPSR account here. 
Following this, you will login to your account and create a secured party group that details the person or organisation that has interest in the property you are registering. 
Now, you are ready to create a new registration. 
To register an interest you must have the following information: 
Collateral details This will describe the property that you are claiming to have security interest over.Grantor details This is the details of the person that gave you the security interest over the property.Secured party group details and Method of payment Registration may incur fees. 
Fees for registration include: 
Duration Cost Up to 7 years$6.007-25 years$25.00No end date$115.00
Perfection
When registering your security interest, it is vital that it is perfected. This will make sure that your security interest has the best priority and effectiveness if it is required to be enforced in the future. 
To perfect your security interest, you must take care when registering your interest on the PPSR. This means making sure that all details are correct and the correct boxes are ticked. 
For example, if you are registering a PMSI, you must tick the box indicating that you are registering a PMSI. 
Timing 
Time is of the essence. 
When it comes to priority rules, generally, first registered = first priority. 
If you are registering a PMSI, note the following: 
Supplying goods that are a part of customer’s inventory If you are supplying goods as part of your customers inventory (such as stocks) you need to register your security interest before those goods are delivered
Supplying goods not part of customers inventory For goods being used as equipment and not inventory, you must register within 15 business days of delivery. Note that you can register your interest as soon as you enter into dealing with a new customer, regardless of whether the goods have been delivered or not. 
Benefits Of The PPSR
The PPSR helps protect your business and its security interests. 
The PSSR is beneficial as it: 
Ensure thats your registered security interests will take priority if a customer goes into liquidation Is an effective risk management tool, protecting your business against negative effects of a customer’s liquidationHelps you obtain lending, as the financier can easily register an interest on assets if you’re securing your loan with assets on the PPSRProtects your business from purchasing property that has remaining debt, has been stolen or could be repossessedAvoids contractual issues, especially relating to retention of title clauses
The PPSR can be extremely beneficial to your business. It is important that you engage with the PSSR correctly for it to be effective. 
Need More Help? 
The PSSR is extremely effective in protecting your business and ensuring that it operates at its optimal capacity. 
Ensuring that you understand and utilise the PPSR is vital to the functioning of your business and its security interests. 
What’s more, including a well drafted clause on title and the PPSR in your business contracts, for example hire contracts, consignment or asset sale agreements is vital in protecting your assets. 
If you have any concerns about using the PPSR effectively or have any questions, we are here to help! Reach out to our team for a free, no-obligations chat at [email protected] or 1800 730 617.
The post What Is The PPSR? appeared first on Sprintlaw.

Are you finally ready to take the plunge and begin your start up? If you’ve got a great idea, you might be motivated to create a startup so you can eventually cash out one day, whether that be completely or partially. 
Having an exit strategy will help you get there, and planning is crucial, especially if you’re very ambitious (think: Whatsapp was bought by Facebook in 2014 for $19 billion).
Exit strategies are not exclusive to co-founders. If you are a sole founder, part owner, investor or entrepreneur, having an exit strategy is important. Being on top of your exit strategy and implementing it early will help ensure an optimal outcome.
Not sure where to start? Don’t stress, we’ve got you covered.
What Is An Exit Strategy?
An exit strategy is a strategy that enables you to cash out on your business, on your terms, when and if the time comes.
The purpose of an exit strategy is to allow you to to sell the ownership of your company either entirely or partially to investors or another company.
If your business is successful, an exit strategy can allow you to cash out, making a substantial profit. Alternatively, if your business is not successful, an exit strategy can help limit your losses.
An exit strategy does not need to be set in stone. Exit strategies should be flexible, accounting for the market and changes that your business may encounter.
There is a lot involved in an exit strategy, and planning from the very beginning is vital.
To start with, have you looked at similar startups in your industry, and how much they are worth? Have you had a discussion with your co-founders to find out where you see yourselves in 5 or 10 years. Do you see this as a side hustle or your full time job?
A lot of business owners and entrepreneurs begin their business with the idea that they will eventually move on from it. Others aren’t too sure if they will eventually move on or not. Either way, it is beneficial to have an exit strategy in place.
Having an exit strategy helps you have a say in: 
How you will get out of your businessHow much money you will get when you leave the business
A good first step would be a Founders Term Sheet to have an in principle, legally non-binding discussion in writing. In order to make it legally binding, and to have more details around the exit, you should eventually have a binding Shareholders Agreement. 
By having an exit strategy in place, you increase the likelihood that you will receive a return on the amount of time and effort you have placed into your business.
Types Of Exit Strategies
The type of exit strategy you choose to implement is dependent on your unique circumstances and expectations.
The most common exit strategies are outlined below.
Sell Your Business
Selling your business can result in a good return. Having a well thought out exit strategy in place can help ensure this.
The first step is to identify potential buyers. Perhaps it might be a bigger company in your industry or a competitor. It may be a business in an adjacent industry trying to diversify their business. It may even be private equity funds or similar players looking for good businesses to buy.
This will depend on the industry you’re in and it’s essential you do your homework around the potential avenues!
Whatever route you decide to go down, make sure the various possibilities are considered when drawing up your  Founders Term Sheet or Shareholders Agreement.
At the end of the day, your exit strategy will outline terms that are best suitable to your unique circumstances and expectations.
Merge Your Business With Another Business
You might have heard of a merger as a type of an ‘exit’ because it is a specific legal concept in the US. However, in Australia, things are a bit different: a merger is the result of a business sale or a share sale, and may involve some share swaps too.
Essentially, a merger is when two companies join forces to create a combined company.
Go Public 
Depending on the size of the business, going public can bring in decent profits.
An Initial Public Offering (IPO) is how you would do this. An IPO provides your company with the opportunity to obtain capital by offering its shares to the public through a stock exchange, such as the ASX. An IPO will take your company from being a privately held company to a public company.
Going public is a big step, and it gives your company a greater ability to grow and expand its capital.  IPOs can be an effective exit strategy for you if your company has been successful enough to consider going public.
Going public is usually an expensive and long term process, however, it can allow for the continuing growth of your company. This may be the most effective exit strategy for you, adequately honouring the efforts you have placed into the business.
Whatever exit strategy applies to you, it is important it is thought about and planned for earlier rather than later. This will help ensure the greatest possible outcome in your favour.
What Are The Benefits Of Having An Exit Strategy?
Having an effective and uniquely tailored exit strategy in place increases the likelihood that a positive outcome will eventuate.
Some benefits of having an exit strategy include: 
Choosing when and on what terms you leave your businessGenerating a potential income for retirement once you exit your business
Creating a smooth transition for others to take over your business Protecting the value of the business you have builtEnhancing the future worth of your business
These benefits are, of course, dependent on the type of exit strategy you choose to implement.
Having an exit strategy in place is highly beneficial to both you and the business you have created.
So, How Do I Form An Exit Strategy?
An exit strategy isn’t something usually contained in one legal document. Rather, it should be a plan that gives you flexibility to read the market and change due to demands.
A Founders Term Sheet or Shareholders Agreement can help you be on the same page, so it’s a good part of your exit strategy. But the more important part of your strategy is preparing for the market, understanding how your co-founders will contribute and what share they will get, and getting your company’s legals right.
If you’re thinking of exiting some day, you need to bear in mind that a potential acquirer – or the public market – will scrutinise your business and its foundations vigorously. This means you need to be set up in the right way, and have proper legal documents in place. Part of your exit strategy should be preparing for this eventual scrutiny.
This is where it might be a good idea to get help from a lawyer. An experienced lawyer can help startups with their legals and can ensure you have thought of everything you need from a legal perspective for smooth sailing down the track.
As well as legals for setting up, if you have key contracts, and key suppliers or some intellectual property that is crucial to the value of your business, and it is not legally protected, you might have to pay a price for it down the track, and this could very well be at the point of exit.
Need More Help?
We’ve got you covered! Our team can help you set up your startup properly, so that when the time comes for you to exit, you’ve done everything right. Reach out to us via email at [email protected] or by phone on 1800 730 617 for a free, no-obligations chat.
The post What Is A Co-Founder Exit Strategy And Why Do I Need One? appeared first on Sprintlaw.

Are you a pet owner? Well, we have great news for you! 
In October 2020, the NSW Court of Appeal held that blanket bans prohibiting pets in apartment blocks are no longer permitted. 
Yep, that’s right, this means that in NSW your pet can no longer be prohibited from living with you in your apartment block! 
So, how exactly does this work for pet owners? Read on to learn more. 
What Are ‘Strata Titles’ And ‘By-Laws’?
If you live in an apartment block, retirement village or caravan park you have likely come across the term ‘strata title.’
If a property is under ‘strata title’ this means that there is ‘common property’ on the premises that is equally owned by everyone living on the property. 
Common property may include a driveway, the courtyard garden or the foyer of your apartment block. 
Strata title is governed by state law. For example, in NSW, the Strata Schemes Management Act 2015 (NSW) governs strata title.  
Where there is strata title, there are by-laws. By-laws are a set of rules that owners and tenants must follow. They cover how residents can behave and what common property they can use. 
Let’s consider the following example of a by-law.
Example: By-law 1212.1 Owners or occupiers of a lot should not make noise that is likely to interfere with the peaceful enjoyment of other owners or occupiers. 
Some states, such as NSW, even have model by-laws. Model by-laws are designed to help corporations write their by-laws by providing examples of by-laws that corporations can adopt or make changes to, though they don’t have to. 
In NSW, the ‘owners corporation’ is responsible for passing and enforcing by-laws. 
So, what happens when a by-law prohibits you from having a pet in your apartment? 
Let’s dissect the 2020 case Cooper v The Owners – Strata Plan No 58068 [2020] NSWCA 250 (the Cooper Case) to figure it out. 
The Cooper Case
Mrs Cooper is a proud dog owner of her (adorable) miniature schnauzer, Angus. 
The Horizon in Sydney, Australia is a 43-storey apartment block that via its by-laws prohibited animals from residing on its premises. 
For four years Mrs Cooper fought to overturn Horizon’s by-laws prohibiting pets in apartments. 
Horizon’s by-laws stated: 
By-law 14 Animals14.1  … an owner or occupier of a Lot must not keep or permit any animal to be on a Lot or on the Common Property.
Mrs Cooper argued that by-law 14 was harsh, unconscionable and oppressive under both ss 139 and 150 of the Strata Schemes Management Act 2015 (NSW).
As such, Mrs Cooper was arguing that by-law 14 should be invalidated. 
The issue that the NSWCA had to determine was whether or not by-law 14 was  harsh, unconscionable and oppressive under ss 139 and 150 of the Strata Schemes Management Act 2015 (NSW)
What was decided? 
The three NSWCA judges unanimously held that by-law 14 was in fact harsh, unconscionable and oppressive in accordance with ss 139 and 150 of the Strata Schemes Management Act 2015 (NSW).
The Court ordered that by-law 14 be removed.
Impacts Of The Cooper Case
So, what does the Cooper Case mean for pet owners wanting to move into apartment blocks, retirement villages or caravan parks? 
The Cooper Case ruling means that properties covered under ‘strata title’ can no longer pass by-laws blanket banning animals from residing in individually owned units. 
1. What This Means For Residents 
You can not be prohibited from having your pet live with you—hooray! 
Mrs Cooper’s four year long battle has paid off, allowing you and your furry friend to cohabitate.  
Although this ruling is a big win, it is important to consider other by-laws that might still remain in place. These include noise restriction by-laws. This is something you may want to consider if your pet barks or screeches. 
On the contrary, if you are a resident and absolutely terrified of pets or are allergic, the decision in the Cooper Case may concern you a bit. 
In accordance with NSW Fair Trading, pets must not negatively impact other residents. 
While the ruling in the Cooper Case makes it difficult to blanket ban pets, if your fellow neighbour pets are negatively impacting you, it may be a good idea to have a chat with your property’s owners corporation or your landlord to work something out.  
2. What This Means For Investment Property Owners 
If you are an investment property owner, you may be slightly concerned that your tenants will begin running a zoo out of your property. 
Although this is highly unlikely, we understand your stress. 
The Cooper Case sends a clear message that pets should not be banned from residential properties. When considering the far-reaching ruling in the Cooper Case, it is unlikely that you would be able to ban your tenants pets.
However, it is important to note that NSW Fair Trading states that a tenant must always gain their landlord’s permission prior to residing with their pet. 
While you cannot ban your tenants pets through strata by-laws, your tenant must still: 
Supervise their pet Clean up any common property that is soiled Ensure that their pet is not noisy or negatively impacting other residents.
What About An Appeal To The High Court Of Australia? 
Never say never. 
Since The Cooper Case was heard in the NSW Court of Appeal, its decision can be appealed to the High Court of Australia. 
At the time of writing, however, no applications have been made to the HCA. 
As for now, the recent decision made by the NSWCA in The Cooper Case remains. 
Hooray For Pet Owners!
So, the Cooper Case is a big win for pet owners, that’s for sure! 
NSW parliament is expected to be meeting soon to review Strata laws. Perhaps we can expect the decision in the Cooper Case to be reflected in future legislation.
To keep up to date with the latest legal developments, sign up to our newsletter here. 
The post Who Let The Dogs In? The NSW Court of Appeal Did! appeared first on Sprintlaw.

As a small business owner, you may be wondering how to best protect confidential information. After all, this information is often what makes your business unique and helps you to stand out from amongst your competitors. 
New technology is making it easier for people, such as employees, to copy and improperly use and disclose information obtained during employment. This may include business information such as financial data, client lists and databases, software codes, as well as documents outlining your business’ strategies and processes.
So, it is increasingly important for your business to take steps to prevent these situations from arising. It’s a good idea to clearly lay out how your business deals with confidential information from the outset when dealing with new people. This may be new employees, contractors, service providers, suppliers, and even customers. 
By setting out this information early, you can minimise the risk of potential disputes arising later down the track, saving you time, money, and headaches. 
One of the easiest ways to do this is to include a confidentiality clause in a contract. But what is a confidentiality clause and how does it work? Is it different to a privacy clause? 
This article will take you through the ins and outs of confidentiality clauses – your business’ confidential information will be safe and secure in no time! 
What Is A Confidentiality Clause?
Simply put, a confidentiality clause is a legally binding agreement that places an obligation on one or both parties to keep specified information confidential. 
Confidentiality clauses are an important mechanism, not only to protect sensitive information that may give you an edge over your competitors, but also to prevent employees from stealing your business information.
Why is it important to maintain confidentiality in the workplace? Find out here.
A confidentiality clause may appear in the form of a standalone contract that explicitly deals with confidentiality, such as a Non-Disclosure Agreement. It can also be included as a clause in a larger contract, such as an Employment Contract or Contractor Agreement. There is no one way of forming confidentiality clauses — what matters is its legal effect.
You can choose for the confidentiality clause to be a one-way obligation or a mutual obligation:
One-way confidentiality: Information, communications, and documents received from the disclosing party must be kept confidential. For example, if Party B signs a one-way confidentiality clause with Party A, they must keep confidential information received from Party A confidential.Mutual confidentiality: Both parties have the same duties and obligations to keep the other party’s confidential information secret.
What Is Confidential Information?
What constitutes ‘confidential information’ is up to you and is defined in your confidentiality clause. 
It may be things like the personal information of your employees and customers, as well as your business’ proprietary information — from your client database and financial data to your brand guidelines, secret recipes, or software codes.
Using a broad definition of ‘confidential information’ is a good way to keep all your information secret and to make sure that all items in the agreement are covered. This may be useful if your business is entering into a long-term relationship, especially since the type of information you want to protect can change over time.
Notably, there are some exceptions to confidentiality clauses, such as situations in which:
Information is already publicly availableDisclosure of confidential information is required by law or to provide goods or services under the contractWritten consent has been given by the disclosing partyThe receiving party is seeking professional advice concerning the contract, and the advisor is bound by client confidentiality
If you are signing a confidentiality clause, it is good to double check to see what other information may be exempt from confidentiality.
What’s The Difference Between Confidentiality Clauses And Privacy Clauses?
When talking about sensitive information, it’s easy to get confused between confidentiality clauses and privacy clauses. Both clauses are concerned with what your obligations are with respect to how you can use and disclose information. Understanding how they differ is important so you can make sure you act appropriately. 
Whereas a confidentiality clause requires parties to keep information confidential, a privacy clause imposes an obligation on one or both parties to comply with the Privacy Act 1988 (Cth) and the Australian Privacy Principles (APPs). The purpose of the Privacy Act is to protect the personal information of individuals. Personal information includes things such as an individual’s name, date of birth, address, contact details, and photograph.
Another major difference between the two clauses relates to definitions. Unlike a confidentiality clause, in which you can define what constitutes ‘confidential information’, a privacy clause cannot modify or negotiate the meaning of ‘personal information’ nor the obligations arising under the Privacy Act and APPs.
Read more about selling personal information and what your obligations are here.
Case Study: Showpo & Black Swallow
The importance of protecting your business’ information from unauthorised disclosure is illustrated in a dispute arising between Australian online fashion retailers Showpo and Black Swallow.
Showpo and Black Swallow are online women’s fast fashion retailers, both of which have a similar target market.
In mid-November 2016, Showpo commenced proceedings against Black Swallow in the Federal Court. Showpo alleged that a former employee downloaded a copy of Showpo’s customer database and provided it to their new employer, Black Swallow. The database contained the contact information of over 306,000 customers, suppliers, competition entrants, and other contacts. 
It was also alleged that Black Swallow sent promotional emails to the customers contained in the database, and adopted similar branding in an attempt to market itself as an affiliate label to Showpo.
Showpo successfully sought an interim injunction against Black Swallow. The injunction prevented Black Swallow from using or disclosing the customer database – an important step taken to minimise and control any foreseeable damage that Showpo could suffer.
The dispute was ultimately settled through mediation. Black Swallow was ordered to pay $60,000 in compensation, and have been permanently restrained from using or disclosing the database.
This case just goes to show how breaches of confidential information and data often occur internally. 
Enforcing A Confidentiality Clause
When it comes to enforcing a confidentiality clause, you will need to know about the two types of breaches: actual and anticipatory.
An actual breach of confidentiality occurs when the other party fails to uphold their contractual obligations. In most cases, such as with the dispute between Showpo and Black Swallow, this happens if the other party doesn’t keep confidential information secret, and either uses or discloses it without permission or authorisation. 
In contrast, an anticipatory breach arises if the other party displays an unwillingness to keep information confidential and perform their contractual obligations. An example of this is if the other party threatens to leak confidential information.
Now you understand the types of breaches, you may be wondering what remedies are available to you if they happen. Generally speaking, the remedy will depend on the type of breach.
Courts will often grant damages in cases where there has been an actual breach of confidentiality. Damages are usually awarded in the form of monetary compensation for actual harm or loss experienced and sustained.
Where there is an anticipatory breach, courts will typically order an injunction. This order will prevent the other party from using or disclosing confidential information.
What Should You Do If Someone Has Breached Your Confidentiality Clause?
If you believe that another party has breached a confidentiality clause and improperly used or disclosed your confidential information, it is always best to attempt to resolve the matter outside of court. This will help you save time and money.
When it comes to resolving the matter outside of court, you should begin by sending the other party a formal letter. This will let them know that you mean business and are taking the breach seriously. 
So, what do you need to include in the letter? While there is no prescribed format that your letter needs to follow, there are a few key elements that it should cover:
Alleged breach: make it as clear as possible for the other party to understand what the specific parameters of the confidentiality clause are and how they have breached it.Damages: what harm or loss has been suffered, or can be expected to occur, as a result of the breach?Demands: what do you want from the other party? Do you want them to stop using or disclosing the information, monetary compensation, or something else?Notification: another good practice is to inform the other party of what steps you plan to take if the matter cannot be resolved, for example, taking them to court.
Want To Find Out More?
We’ve spoken about the importance of confidentiality clauses and what to do if you believe someone has disclosed your confidential information.
So, what now?
It’s always good to seek a lawyer’s help to make sure your contracts include effective confidentiality clauses that protect your business properly. The wording of confidentiality clauses can sometimes be tricky so you want to make sure you haven’t left any gaps!
From straightening up your contracts, to drafting formal letters and enforcing confidentiality clauses, Sprintlaw has a team of friendly and experienced lawyers that are ready to help! If you would like a consultation on your options going forward, you can reach us at 1800 730 617 or [email protected] for a free, no-obligations chat.
The post Confidentiality Clauses: What Are They & How Can You Enforce Them? appeared first on Sprintlaw.

New consumer laws will be in effect to protect more consumers across Australia.
The Australian Consumer Law (ACL) is the main body of law that protects consumers who buy goods and services from businesses across Australia.
And, now, even more consumers are going to be able to access the ACL’s protections. This is because the ACL’s definition of a “consumer” is changing. 
Previously, the ACL defined a “consumer” as anyone who purchases goods or services under $40,000. Under new changes to the law, this number will be increased to $100,000.
This means that a lot more consumers across Australia will have rights and entitlements under the ACL, so businesses need to understand their obligations to consumers.
These new consumer laws will take effect from 1 July 2021, giving businesses a significant amount of time to prepare. 
So, what does this change actually mean for businesses in Australia?
In this article, we’ll walk you through the laws and what it could mean for your business.
A Quick Lesson On The Australian Consumer Law
Confused about what the Australian Consumer Law is?  
The ACL covers both consumers and businesses across Australia. It addresses a wide range of areas like refunds, returns and exchanges, misleading and deceptive conduct, spam, resale prices, and plenty more.  
Business owners have to comply with the standards and expectations set out in the ACL. Consumers have rights to take action against businesses if those standards aren’t met. 
All businesses (including overseas businesses who sell to consumers in Australia) must comply with the ACL. 
How Does The Law Define “Consumer”?
For a business’ customers to actually be entitled to any rights under the ACL, they must meet the legal definition of “consumer”.
Currently, Section 3 of the ACL defines a “consumer” as anyone who purchases goods or services that are:
under $40,000typically used for personal, domestic or household purposesvehicles
If a person satisfies that definition of a “consumer”, they are entitled to the rights and obligations under the ACL that expressly refers to consumers, including consumer guarantees.
Consumer guarantees are the minimum standards that businesses and manufacturers are expected to meet when they sell goods or services to consumers.
For example, if you’re hiring out party equipment for household parties, you are required under the ACL to ensure that the equipment is fit for its intended purpose. If it’s not, then the consumer will be entitled to a “remedy”. This could include a repair, replacement or refund.  
So, if a person buys goods and services that satisfy the definition of a “consumer” under the ACL, they are entitled to a remedy if a business does not meet its consumer guarantees. 
A full list of the consumer guarantees that businesses must comply with is here.
How Is The Definition Of “Consumer” Changing? 
As discussed above, the ACL has defined a consumer as someone who purchases goods worth up to $40,000. This $40,000 limit was introduced in 1986. The rationale was that any goods or services above that amount would typically be used for business purposes. 
For example, a business installing industrial air conditioning in a factory wouldn’t be seen as a “consumer” for the purposes of the ACL. Typically, there would be a B2B contract between the two businesses, which would set out a process for defects and refunds. And, as their customers won’t have a right to a remedy for not meeting ACL standards, the terms can be more favourable towards the business offering the goods or services.  
New changes will see the monetary threshold increased from $40,000 to $100,000 from 1 July 2021. These changes have been introduced by the Treasury Laws Amendment (Acquisition as Consumer – Financial Thresholds) Regulations 2020. 
The changes mean that anyone in Australia who buys goods or services up to $100,000 will be entitled to a remedy if the business does not meet the consumer guarantees. The changes will give more consumers across Australia rights under the ACL. 
What Does This Mean For My Business?
If your business sells goods or services under the $40,000 limit, this change won’t affect you (as the consumer guarantees still apply to you either way).
However, if you’re currently selling goods or services over $40,000, you need to make sure you’re prepared for the new changes, because consumers will have more rights if your goods or services do not meet the consumer guarantees.
Here’s how to prepare:
Make sure your customer contracts comply with the consumer guaranteesUpdate your refunds/return policies Understand your obligations when a consumer requests a remedy
These changes will take effect from 1 July 2021, which gives businesses plenty of time to make sure they’re prepared.
Regardless of whether your consumers have a right to claim a remedy under the consumer guarantees, you must still comply with the rest of the ACL. For example, the ACL prohibits all businesses from misleading and deceptive conduct, or from imposing unfair contract terms.
What Do I Do Now?
If these new changes affect you, we suggest that you speak with a lawyer to understand your obligations to meet consumer guarantees and ensure that your contracts comply with them.
Whether or not these changes affect you, it’s likely that the consumer guarantees still apply to your business. If you’re not sure how they work, we’ve written about them here. 
The ACL is constantly changing. For example, in 2019, mandatory wording was introduced for additional warranties. 
It’s important to keep up with these changes to the ACL and to be aware of how your obligations to consumers may evolve as a result.  To check whether your business is compliant with the ACL, or for any other consumer law questions, reach out to our friendly team for a free chat on 1800 730 617 or at [email protected].
The post The Definition Of “Consumer” Is Changing In The Australian Consumer Law appeared first on Sprintlaw.

Facebook has introduced new technology under ‘Rights Manager’ to better help content creators protect their intellectual property—specifically helping creators protect their images online.
In this article, we’ll walk you through what the current rules are, and explain how Facebook’s changes will affect the owners and publishers of posted images. 
Do I Currently Have Ownership Over Images I Post On Facebook or Instagram?
Yes, you do. 
If you are the creator of content such as images, or if you’re the owner of a trade mark, this content will be protected by the normal intellectual property rights that exist in your country. 
According to Facebook’s terms and conditions, when uploading content, you are giving Facebook a licence to use it in accordance with the privacy settings you’ve selected.
Facebook has a “non-exclusive, transferable, sub-licensable, royalty-free, and worldwide license to host, use, distribute, modify, run, copy, publicly perform or display, translate, and create derivative works of your content.”
Basically, this means Facebook can use your images for free, and can transfer or sub-license this lease to another, while you are still free to license the content with other entities. 
Can I Publish Content On Facebook That Doesn’t Belong To Me?
Facebook shifts the responsibility of copyright ownership to the person uploading the content by stating that the content uploaded must be owned by the person uploading it. 
Currently, Facebook is able to remove content that would violate the intellectual property rights of a third party. An example of this is if someone uploads a photo without first getting permission from the owner of the photo. 
If you upload content to Facebook without first getting permission from the creator of the content, you’ll always risk violating the author’s intellectual property rights. This is the case even if sharing an image from another user’s post.
What Changes Is Facebook Making?
Facebook is going to allow some ‘partners’ (we don’t know who they are yet) to have control over where their images show up by allowing the owner of the content to order that their images be taken down. The image would then be removed, or there would be a territorial block so it would not be able to be viewed in certain geographical areas.
This will work through ‘upload filtering’. The owner of the image can submit an application for images they want to protect by uploading a CSV file with the image metadata to facebook, and stating where the copyright applies. This is then processed with Facebook, and any images that match this file will be monitored according to the new rules. 
Problems may arise where multiple users claim they own the image, so it’ll be interesting to see how Facebook deals with this.
What’s also interesting is that these copyright rules could one day be rolled out to all users of Facebook and Instagram. But, for now, the new changes are not going to be available to everyone.
Why Are These Changes Being Made?
Facebook may have implemented this technology to coincide with new copyright laws set to start in the EU next year.  The new EU laws will mean large internet platforms (as well as Facebook, YouTube, Instagram and Google) will have to block content that infringes copyright. 
The new changes mean these platforms can be found liable if they keep up content that infringes copyright. As these platforms are available to users worldwide, having a territorial block option for countries with different copyright laws makes sense.
For now, the EU’s changes are only set to affect large commercial platforms like Facebook and Google. Small businesses will be exempt from the new copyright laws if they earn less than 10 million euros annually, or are under three years old. 
And, fear not: under the new EU copyright directive, other people’s images can still be uploaded if they are part of parodies, criticism, cartoons, review or citation. So memes should be okay for now!
How Will Facebook’s Changes Affect You?
If you’re a business wanting to protect your images from unauthorised use, you might soon be able to utilise Facebook’s ‘Rights Manager’ to upload your images first so you can be alerted if they are used elsewhere without your permission. This will be particularly useful if you’re a photographer or if you run any type of business where protecting images is important.
As mentioned above, anyone who uses Facebook already has a responsibility to ensure that the images they upload are owned by the publisher, or that permission has been given to upload such images. So, if your business uploads images taken by another without their consent, you could still be breaching someone else’s intellectual property rights. 
As a general rule, if you’re an individual uploading or sharing content, you should always check you have the content owner’s permission to publish it. 
Plus, if you operate an online marketplace or a website where users can upload content, Facebook’s new changes should prompt you to think about how you deal with images on your site. 
In these cases, it’s really important to have strong terms and conditions in place to make the uploader aware that they need to seek permission and take responsibility for images they publish. If your site doesn’t have these T&Cs, your business could be liable. 
In the past, we’ve spoken to online marketplace clients who got into disputes because a professional photographer or other business realised their images were being used without permission by users on the marketplace. And the online marketplace owners weren’t even aware of this! Having a watertight set of T&Cs from the outset can protect you from these headaches. 
The Takeaway
Just as Facebook has terms and conditions for intellectual property to protect itself, so should your business on its website. 
Infringement of intellectual property can easily happen by accident, or in a way that is out of your control if others can use your website. For a free chat about what terms and conditions would best suit your business, give us a call on 1800 730 617 or email us at [email protected].
The post New Developments May Let You Copyright Your Facebook & Instagram Posts appeared first on Sprintlaw.

If you’re a company director, you may have heard of a holding company and the protection that it offers to your business structure. Most people set up a holding company to reduce tax and risks while their company grows, but it’s important to note that a holding company can still be liable for any debts incurred by its subsidiary companies.
This all depends on the situation, and there are a number of questions to ask before deciding whether the holding company is liable. But before we discuss these circumstances, it’s important to go through some key terms. 
What Is A Holding Company?
A holding company is usually set up to own shares or stock in its subsidiary companies, but is generally uninvolved in day-to-day activities like manufacturing or selling. It’s a good way to reduce the risks of a growing business structure because it protects your company assets. 
For example, if a customer wanted to sue your company, they could only sue the subsidiary company that they had a legal relationship with. This means that all the company’s assets that are owned (or being ‘held’) by the holding company are protected. 
What Is A Subsidiary Company?
A subsidiary company is the company that is owned by a parent or holding company. Following on from the example above, the subsidiary company would be the one exposed to the most risk of being sued. This is why a holding company is used as a safeguard, and generally owns most of the company assets. 
This kind of company structure is also known as a dual company structure. 
Here’s a diagram to explain how holding companies and subsidiaries work. 

What Happens When The Subsidiary Company Is In Debt?
Even though a subsidiary company is technically separate from its parent company, liability can still extend to the holding company. 
More specifically, the holding company can be liable for the debts of its subsidiaries where the subsidiary company is trading while insolvent and a director knew, or should have known, about it. 
If you’re unsure about whether a holding company could be liable, you can ask the following questions:
Was it a holding company of the subsidiary at the time that the debt was incurred?Was the subsidiary company insolvent at that time?Were there reasonable grounds for suspecting that the subsidiary company was insolvent, or would become insolvent?Were one or more directors aware (or should have been aware) that there were reasonable grounds for suspecting insolvency?
If any of these points apply to your situation, your holding company can be liable for your subsidiary company’s debts. 
As a director of a holding company, it’s important to closely monitor the financial status of your subsidiary companies. 
What Can A Liquidator Do?
If your subsidiary company is in debt, a liquidator will be appointed to manage their financial situation. Under section 588W of the Corporations Act, the subsidiary’s liquidator can recover the money from the holding company if:
The holding company has breached s 588V (this section states that a holding company is liable if they knew, or should have known, about the subsidiary’s insolvency)The person that is owed money has suffered loss or damage due to this insolvencyThe debt was wholly or partly unsecured at the time of loss or damageThe subsidiary company is being wound up 
If the above applies, the liquidator can recover the owed money from the holding company. 
What Defences Can I Use?
Setting up a holding company doesn’t exclude all risks of liability. Thankfully, there are some defences available should you ever find yourself in this kind of situation (these are set out in section 588X of the Corporations Act). 
Safe Harbour Provisions
If your holding company is being held liable for the subsidiary company’s debts, you can claim that you were developing a plan that was ‘reasonably likely to lead to a better outcome’ for the company. This is known as a safe harbour provision. 
These provisions are particularly helpful for businesses during the stressful COVID-19 situation as it allows directors to seek relief where insolvency is difficult to avoid. Essentially, it’s the director’s way of saying that while they knew of the insolvency, they were doing what they could to manage it. 
Reasonable Grounds
As a holding company, you can claim that there were reasonable grounds to believe that the subsidiary company was actually solvent. This means you reasonably believed that they were able to pay all of their debts, and would continue to be solvent even when they did incur the debt. 
Reliance On Information
The holding company can also claim that a ‘competent and reliable person’ was responsible for giving them enough information about whether the company was solvent, was giving them this information, and based on this information, they reasonably believed that the subsidiary company was solvent. 
Director’s Non-Participation
A holding company can also use the defence that its directors were unable to assist in managing the company due to an illness or another good reason. Essentially, the company can claim that the director’s absence made it impossible to know of the insolvency. 
Reasonable Steps Taken To Prevent Insolvent Trading
Lastly, a holding company can argue that they took reasonable steps to prevent the subsidiary company from incurring the debt or trading while insolvent. In this case, the holding company may be able to avoid liability. 
While there are a number of defences available for a holding company in this situation, it’s generally good practice to avoid this liability from the outset. A great way to do this is to monitor your subsidiary company’s finances regularly and ensure that there are no grounds to suspect insolvency. 
Next Steps
Setting up a holding company has its benefits, but it doesn’t necessarily rule out the possibility of liability for your subsidiary’s debts. 
Luckily, we have a team of lawyers you can chat to about a Dual Company Structure and any concerns you have regarding liability. Feel free to reach out to us at [email protected] or contact us on 1800 730 617 for an obligation free chat.
The post Can A Holding Company Be Liable For Its Subsidiaries’ Debts? appeared first on Sprintlaw.

Intellectual property (IP) is fundamental to your business’ success and longevity. It’s what helps you to stand out from your competitors and can be some of your business’ most valuable assets. Because of this, you need to understand how to protect your business’ IP and make sure that you own the works that have been created for your business.
If you’re engaging an independent contractor to design, create or develop works for your business, it becomes even more important to be aware of your intellectual property rights. 
For example, you may engage someone to design a logo for your business or hire a software developer to write some code for an app your business is creating. But who actually owns this creation? Your business or the independent contractor?
By default, the independent contractor will own copyright over works they create—even if they are creating them for your business. 
This is why it’s really important that you ensure IP ownership is transferred from the independent contractor to your business. If you don’t do this, it’s possible for the contractor to stop you from using the works you paid them to make!
In this article, we’ll run through how your business can protect the intellectual property of the works created by independent contractors. There are several key legal issues you should be aware of when engaging independent contractors, so let’s walk through them!
Is The Creator Engaged As An Employee Or Independent Contractor?
One of the first questions that will arise when talking about IP ownership is whether the person who created the work did so while engaged as an employee or as an independent contractor. 
This is a very important distinction to make, especially where there is no clear contractual relationship, as it will generally determine who owns the IP and copyright over the works.
As a general rule, employers will own the IP of works created by their employees if it is carried out “during the course of employment”. If a person is employed to create works as part of their job, the IP will belong to their employer.
However, this rule does not apply to IP created by independent contractors.
The law in Australia is that IP created by an independent contractor will belong to the contractor, unless there is a contract or agreement that says otherwise.
In situations where there is no contract (or where contracts are silent on the issue of IP ownership), businesses are generally understood to have an implied licence to use the IP created for them by contractors. The independent contractor will retain ownership over that IP unless the business has the work assigned to them (for example, through an IP Assignment Deed).
Not sure whether you have engaged a worker as an employee or as an independent contractor? We have an article that can help.
What’s The Difference Between A Licence And An Assignment?
You might be wondering what the difference is between a licence to use a work and an assignment. Why does it matter if you can still use the work created for your business?
An IP assignment will permanently and irrevocably transfer the ownership of IP from the owner (in this case, the creator or independent contractor) to your business. After you have successfully completed an assignment, you will have full ownership rights over the IP. This means that your business will be entitled to use the IP as you wish.
Alternatively, if the IP ownership remains with the independent contractor your business engaged, you will generally be said to have an implied licence to use the work. 
Under a licence, the owner of the work will be able to control how you use the work. For example, they will be able to choose where and for how long you are allowed to use it, and they can even control who else is allowed to use the work.
Licences can be an exclusive, non-exclusive or sole licence:
If your business has an exclusive licence, only you can use the work. Even the owner of the IP will not be able to use it themselves.If your business has a non-exclusive licence, anyone will be able to use the work if they have been granted a licence by the owner.Under a sole licence, your business will be the only licensee allowed to use the work, but the owner may also use the IP themselves.
So, How Can You Make Sure You Own The IP and Avoid Ownership Disputes?
Simply put: contract, contract, contract!
The best and safest practice for your business is to take proactive steps to iron out any and all issues surrounding IP ownership before work begins. A good contract helps you avoid headaches later on.
Contracts are particularly important when engaging independent contractors—especially because they prevent disputes arising if work is subcontracted out. If the contractor you hire subcontracts the work to someone else, you will need to contact the subcontractor(s) and enter into an IP Assignment Deed to transfer IP ownership to your business.
What Contracts Should You Use To Protect Your IP?
There are two main ways to go about contracting: a Contractor Agreement or an IP Assignment Deed.
A Contractor Agreement (or variations of this contract, such as a Developer Agreement or Service Agreement) deals with more than just IP. It is a robust contract that is generally used when you initially engage an independent contractor to carry out work. It sets out the terms of engagement around things like payment, liability, expected standards of services, and what happens if something goes awry. 
The Contractor Agreement can also include an IP clause in which the contractor assigns ownership of the IP they create to your business. This clause clarifies who the creator of the work is and who owns it.
Alternatively, you can choose to use an IP Assignment Deed, as it is a good way to ensure ownership over IP is assigned to your business. The sole purpose of this deed is to transfer ownership of IP from one person to another—in this case, from the independent contractor to your business. 
An IP Assignment Deed can also be used if work has already been created, but there was no contractual agreement relating to the ownership of IP.
You may also want to think about having Non-Disclosure Agreements (NDAs) and Confidentiality Agreements. These contracts are a good way to protect your business’ IP and other confidential information, especially if you’re engaging in confidential commercial discussions with people outside of your business. 
NDAs and Confidentiality Agreements stop people from using or sharing confidential information that has been disclosed to them. They are always good to have organised early on in new relationships with independent contractors—such as when money has not yet been exchanged, or if development of a work has not yet started.
Need Help?
Making sure you own IP over works created for your business is important for building and upholding your brand’s image and reputation. You need to have the right paperwork in place, especially when engaging independent contractors to design or complete work for your business. If you need advice or help drafting contracts that are catered to your specific business situation, don’t hesitate to reach out to us for a free, no-obligations chat on 1800 730 617 or at [email protected]. We’ll walk you through your options and help you figure out what contracts you’ll need in your specific situation.
The post When Independent Contractors Create Work, Who Owns The Intellectual Property? appeared first on Sprintlaw.

Starting a business with your spouse or romantic partner can be really exciting! 
You might be thinking to yourself: ‘who would be better to start a business with than my significant other?’
While it’s easy to get caught up in the fun of it all, it’s important to consider what legals you should have in place for the benefit of your business. 
Unfortunately, not all relationships end in happily ever after. If you have the correct legals in place, you will be able to have confidence that your business will stay afloat and continue at optimal capacity, despite any relationship breakdowns. 
Read on to find out exactly what legals you should have in place when starting a business with your significant other. 
Choosing The Best Business Structure 
The first thing to consider is business structure. 
Choosing the correct business structure will help set solid foundations for your business. 
The two most relevant business structures are a partnership structure and a company structure. 
Let’s break them down. 
What Is A Partnership Structure? 
A partnership structure will allow you and your spouse/partner to run your business together as ‘partners’. 
The pros of a partnership business structure include: 
It’s easy to set up It’s easy to dissolve if you wish to end your businessIt comes with little administrative costs
The cons include: 
The business is not a separate legal entity from you. This means that you can be personally liable for your actions or your partner’s actionsIt can be difficult to raise capital If one of you wants to leave the business, the partnership has to dissolve
Under a partnership structure, you should have a Partnership Agreement. This outlines the main concerns for your business, as well as the structure of you and your spouse/partner’s business relationship, how long you want the partnership to last for, and what happens when one of you wants to leave. 
It is really important to have a Partnership Agreement in place to optimise the functioning of your business and partnership. 
If you think a partnership business structure is best for you and your spouses/partner’s business, you should:
Register a business nameRegister an Australian Business Name (ABN) and Tax File Number (TFN)Sign a Partnership Agreement 
What Is A Company Structure? 
A company structure will allow you and your spouse/partner to be shareholders — completely separate from your business, which will be its own legal entity. 
As shareholders, you and your spouse/partner will be the legal owners and controllers of the company. This means that you can appoint ‘directors’ to make all of the decisions. 
Yes, you can be both a shareholder and a director! 
For more information on the distinction between a shareholder and a director, Australia’s corporate regulator, ASIC, explains it well here. 
The most common type of company is a Proprietary Limited company. These are private companies and their liability is limited by the value of their shares. This means that shareholders, being you and your spouse/partner, generally cannot be sued for any company mistakes.  
So, the pros of a company include: 
Limited liability Protection from potential risks, keeping assets, revenue and intellectual property safeEasy to raise capital 
Some cons of a company structure include: 
It is not cheap. For example, ASIC takes an up front fee for company registration
Under a company structure, you and your spouse/partner should have a legally binding Shareholders Agreement in place. This will outline your business’ goals and facilitate a structured relationship between you and fellow shareholders. More on this in a bit. 
If you are thinking that a company structure is best for you and your spouse/partner’s business, here is what you need to do: 
Register an ABN, Australian Company Number (ACN) and a TFNSign a Shareholders Agreement between you and your spouse/partner 
For more information on the differences between partnership and company structures, click here. 
Determining what business structure best suits your business will help inform what legal agreements you need to put in place between you and your spouse/partner. 
So, What Legal Agreements Should I Have In Place?
Partnership Agreement 
If a partnership business structure is most suitable to your business, you must have a Partnership Agreement in place between you and your spouse/partner. 
A Partnership Agreement will outline all of your main concerns for your business as well as the structure of you and your partner/spouse’s business relationship. 
A Partnership Agreement will generally address: 
The purpose of the partnership How important decisions will be made The course of action if your spouse/partner wants to leaveThe responsibilities of you and your spouse/partner as co founders
Shareholders Agreement 
If a company structure suits your business best, a Shareholders Agreement between you and your spouse/partner is vital to the operating of your business. 
A Shareholders Agreement will outline decision making processes and what will happen if your partner/spouse leaves the company.
A Shareholders Agreement may also address: 
The responsibilities of you and your spouse/partner as co-foundersHow shares are allocated What shares can be issued and sold 
Founders Term Sheet 
Alternatively, you may choose to have a Founders Term Sheet in place. Despite not being a legally binding contract, a Founders Term Sheet is an ‘agreement to agree’.
Typically, a Founders Term Sheet will: 
Address ownership of the businessOutline how decisions are madeDiscuss what happens when a co-founder wants to leave the business Outline how disputes should be handled 
Having appropriate agreements in place is vital for the sustainability of your business. If you’ve got a clear agreement from the get go, you and your partner can easily understand what roles you need to play and what will happen if something goes wrong. 
How Do You Make Sure Your Roles Are Clear?
Ensuring that your roles are clear is extremely important to the success of your business and for preserving the relationship between you and your partner. 
Having a conversation with your partner about your roles in the business is not enough. It is crucial that your roles and responsibilities are put into writing. 
As discussed above, the type of written agreement you have in place will be dependent on what business structure you choose for your business. Whatever agreement this may be, it will help clearly define what roles both you and your spouse/partner play in your business. 
When determining what roles you and your partner play, it is important to consider: 
Who will make decisions?What areas of the business will each of you be responsible for?How many hours will each person work on a regular basis?If something goes wrong with the business, what will happen?If something goes wrong with your relationship, what will happen? 
Communicating the above to your partner, putting it into writing and ultimately agreeing on terms will help make sure your roles in your business are clear. 
Do You Need To Pay Yourselves?
There is no requirement that business owners have to pay themselves. 
However, most business owners certainly choose to. After all, being paid is an incentive to produce good work.
You may choose to pay yourselves in a number of ways. For example, one or both of you may become employees of the business and be paid on a regular basis.
Whether you choose to pay or not pay yourselves, it is important to detail this in the relevant agreement between you and your partner. 
Having a solid written agreement will avoid any conflict between you and your partner about your pay. 
What If Your Relationship Breaks Down?
Going through a relationship breakdown can be tough. 
It will be even tougher if you and your ex spouse/partner have a business together and don’t have the necessary legals in place. 
This is why it is so important to have relevant written legal agreements in place between you and your spouse/partner when starting a business together. 
Having an appropriate agreement in place will make it very clear what will happen in the event of your relationship breaking down. 
Need More Help?
Starting a business with your spouse/partner can be really exciting. 
But it is really important you have the correct legals in place for the sustainability and benefit of your business. 
It is vital you have an agreement in writing between you and your spouse/partner outlining exactly how you intend your business and business relationship to function. 
We’re here to help! Reach out to our team for a free, no obligations chat at [email protected] or 1800 730 617.
The post For Love & Money: Starting A Business With Your Significant Other appeared first on Sprintlaw.

There are many reasons business owners end up selling their business.
For example, it might be time for you to step away from your business and let someone else take over. Or you may be moving onto a new project and no longer have the time to dedicate to your existing business.
Either way, selling your business is a big move. And there are different ways to do it.
When there’s a lot of money, people and different moving parts involved, you want to make sure you do it right.
So: how do you do it?
In the legal world, most businesses either sell their shares or their assets. In this article, we’ll walk you through the difference between these two, and answer the most common questions we get around selling a business.
Asset Sales vs. Share Sales
As I mentioned, there are two main types of business sales: asset sales and share sales.
What’s the difference?
As the name might suggest, an asset sale disposes of the assets of a business—selling it from one business owner to another. That means the buyer will then gain control of the assets (from equipment to domain names and goodwill).
This is often the most simple transaction since there are no liabilities transferred across.
On the other hand, share sales are a lot more risky. This is specific to registered companies where the owners have ‘shares’ as shareholders. When a shareholder wants to sell or transfer their shares to someone else, that’s effectively a share sale.
It means transferring the ownership of those shares to another person. In this kind of transaction, there’s a lot more at stake because the liability and ownership attached to those shares are transferred to a buyer. This means that if particular assets are under debt, for example, that debt is transferred over too.
Asset SaleSelling the equipment, goods or any other assets owned by a business (including goodwill!).Share SaleSelling the shares of a company, and transferring ownership of the company altogether.
To help you understand, let’s walk through an example.
Let’s say that you own a local cafe and you’re thinking about selling it. If you’re looking to go down an asset sale route, you would really only sell and dispose of the assets of the cafe: the coffee machine, the tables, chairs and kitchen equipment. Then, the titles of all those assets are moved over to the new owner.
You would probably also sell the intellectual property, too: the business name, trade marks, trade secrets and goodwill involved.
You wouldn’t have to transfer any shares, as you’re simply moving the ownership of assets to someone else. To put this into effect, you’d need an Asset Sale Agreement. And, depending on what assets you’re selling, there may be other processes you need to consider when transferring those assets. In any case, it’s best to speak to a lawyer first to understand the requirements involved.
However, if you’re doing a share sale, this means you’re selling the ownership of the business altogether.
If we go back to the cafe example, a share sale would mean you’re transferring the ownership and management of your cafe to another person. Nothing would change in the cafe business itself, only the management side of things.
This is high risk because a buyer can walk in to buy the entire cafe and become a shareholder, inheriting all assets and liabilities of that company.
To put a share sale into effect, you’ll need a Share Sale Agreement.
Additionally, you’ll need to notify the Australian Securities and Investments Commission (ASIC) of the changes to your company and its shareholders, so it’s a good idea to speak to a lawyer first!
I’m Selling My Business… What About My Employees?
Selling a business involves contracts that move around assets and shares. But with any business, you’re likely to have staff that are employed by your business.
Before you sell a business, you really need to think about your employees carefully. In most cases in a transfer of business, the employees will be ‘carried over’ to the new business owner.
To do this, you first need to terminate your existing employment agreements with your current employees. This will formally end their employment with you.
If the buyer wants to hire the same employees for the business, they’ll have to enter into new employment agreements with those employees.
We’ve written about what you need to know here. 
Can I Sell My Online Business…?
These days, it’s very common to own an online business, as it involves low overheads and high potential for scalability. So, what happens if you want to finally sell your online business?
When you think of an asset sale, this isn’t limited to physical assets. Though there may not be as many assets as your traditional brick-and-mortar business, you can still sell your online business.
This is still typically considered an asset sale, where you’re selling your intellectual property to another person or entity. These ‘assets’ include your website, domain, trade marks, goodwill and branding.
Again, you’ll need some sort of legal document between you and the buyer. We call this a Business Sale Agreement.
We’ve written about selling your online business here. 
What About Franchising?
One of the main drivers for business owners selling their businesses is making more money.
You can still do this without completely letting go of your business through franchising.
Franchising is a great way to scale your business. In simple terms, you allow other businesses to take on your brand and intellectual property too.
It helps your brand grow without you actually operating those franchises yourself. And you’ll be able to collect a fee from your franchisees in return for allowing them to use your brand.
In practice, however, it’s really not that simple. Franchising is a really big commitment, and you’ll be bound to the strict rules of the Franchising Code of Conduct.
As opposed to your usual business sale, there are a lot more documents involved if you’re thinking about franchising (we’ve written about them here).
You really need to think carefully before you start to franchise. And, it’s really important that you speak to a lawyer to understand your legal rights and obligations as a franchisor in Australia.
Wrapping Up…
Selling your business is a really big decision, so you want to make sure you do it right.
Whether you’re selling assets, shares or even thinking about franchising, you’re probably going to have a lot of questions. And it’s important to have a good lawyer who can guide you through what you need to know.
At Sprintlaw, we’ve helped many small businesses through the process of selling. We know it can be a really big and exciting journey, so we want to help you through it.Don’t hesitate to reach out to us for a free chat at 1800 730 617 or just drop us a line at [email protected].
The post Different Ways To Sell Your Business appeared first on Sprintlaw.

The International Access To Information Day is a worldwide movement that observes the public’s right to access government-held information.  This year’s theme is ‘building trust through accountability’. 
On a large scale, transparency of government information can save lives—just look at COVID-19 and how access to government information and verification of its trustworthiness has been crucial to combatting the virus.
On a smaller scale, as a small business owner, you may feel like you have little power against government decisions, and you might feel intimidated by government agencies.  We want to remind you that you do have the power to question government decisions and to request access to government documents. 
In this article, we’ll look at two crucial, but separate, things: 
How to get access to information about government decisions (i.e. finding out why the decision was made) How to actually challenge a government decision
What Are Our Information Access Rights In Australia? 
Our right to access Commonwealth government information in Australia is laid out in our Freedom of Information Act 1982 (FOI Act). 
The FOI Act covers things like:
Your right to access documents held by Australian government ministers and agencies, such as: ATOASICNDIS Quality and Safeguards CommissionAustralian National Audit OfficeIP AustraliaCentrelinkYour right to request that the government amends information held about youThe Australian government’s responsibility to release information proactively  
If you want to access state-based information, each state has their own version of the FOI Act. For instance, in NSW there is the Government Information Public Access Act 2009, while in Western Australia there is the Freedom of Information Act 1992. 
If you need information that isn’t publicly available—for instance, because it includes personal details about an individual—you can apply formally for this information. 
State-based information might be useful for obtaining information on the following:
State liquor and gaming regulatorsOther state regulators your business interacts withLocal council decisionsZoning Anti-discrimination Fair trading (e.g. NSW Fair Trading)Legal AidLocal Government Grants CommissionCourts and tribunalsOmbudsmans 
What Does ‘Proactive Release Of Information’ Mean?
You might have noticed a lot of government department information, like stats and policies, is already available online. This is because access to information in Australia should be ‘proactive’. 
This means the government should release as much information as possible and remove barriers to access, keeping costs minimal. Information that should be released proactively is information that is in the public interest, like statistics, data, and policy. 
Through releasing this information to the public before waiting for it to be requested, access to information is even easier, faster and free. 
How Access To Information Affects Your Small Business
So, we’ve now run through some examples of what government departments control what. 
For example, the FOI Act governs Commonwealth government decisions. Decisions that might impact your business could be from ASIC, the ATO or IP Australia.
Here are some examples of Commonwealth government decisions that your business might want more information on:
The ATO makes a decision around assessing your workplace for JobKeeper, or your debts, administering a garnishee orderIP Australia rejects your application for a trade markASIC  does not approve your business name or gives you a fine
You have a right to know about government decisions and the reasons behind. You don’t have to accept a government decision at face value: you have the power to question it! Plus, you have the right to find out what information the government holds about your decision. 
How To Request Information
Under the FOI Act, you can request that a decision made about your business be sent to you. From there, you can ask for an internal review from the specific government agency that made the decision. This is usually the recommended first step. 
If, after an internal review, you still can’t get access to government information, you can also contact the Office of the Australian Information Commissioner to ask that they review the decision to grant you access to information.
The FOI process can provide valuable insights into why a decision was made, and how you can go forward with that information. It could be that the decision maker made the wrong decision, or you may be satisfied with the decision after seeing more information. Regardless of the outcome, it’s important to know there is a process you can follow to access information.
FOI request example: Requesting information from IP Australia
Lee’s application for a trade mark is challenged by another business who is claiming prior use of the trade mark for 5 years. Lee has also been using this trade mark for 8 years, and submits a FOI application to view these declarations of prior use by the other business to help her understand the process. IP Australia decides to uphold the other business’ claim. Now that Lee has this insight, she decides to challenge IP Australia’s decision. 
FOI request example: Requesting information about a decision from ASIC
Natalie’s application for a business name was rejected by ASIC. Natalie has already put a lot of money into trade marking this name and building her brand’s reputation, so Natalie decides to find out if there is anything she can do about it. Natalie puts in a written request to the person who made this decision at ASIC for the reasons why they rejected her business name, within the 28 day timeframe. At the same time, Natalie puts in a FOI request for documents surrounding the decision. The decision maker responds with reasons why her business name was rejected: it is already taken by another business. After receiving more information on why the decision was made, Natalie understands why her business name can’t proceed and is satisfied with the decision. 
How Do I Object To Decisions Made By Government Departments?
First, you may need to request information about the decision (see steps above). From there, you may want to challenge or object to the actual decision made, which is a different process. 
Each government department will have its own procedures for challenging a decision. Generally, you should make an objection directly to the specific government agency that made the decision. 
Keep in mind that there are time frames in which you need to make requests for information, or lodge objections to decisions. These differ for each department.
For example: Objecting to a decision made by the ATO
Jesminder disagrees with a decision made by the ATO that her business is not entitled to JobKeeper payments.  First, Jesminder lodges an objection in writing within the 60 day time limit to the ATO. Jesminder doesn’t need to pay a fee for this. Jesminder then receives a response from the ATO upholding their original decision with reasons as to why they’re doing so. Jesminder decides to appeal this decision by going to the Administrative Appeals Tribunal. 
The Takeaway
You have the right to request information from and object to decisions made by government departments! 
As a business owner, many government decisions will have lasting impacts on your business. To get the best outcome for your business, it’s important that you’re assertive about your rights. 
Feel free to contact us at  [email protected] or on 1800 730 617 for a free chat about your business’ legals 
The post Accessing Government Information: Know Your Rights appeared first on Sprintlaw.

On 16th of September 2020, Kanye West posted ten of his Universal Music contracts (page by page) on his Twitter account. 

So, we did take a look at them. And, like him, we think complicated contracts are hard to decipher and need to be simplified. 
The Case For Simplified Contracts 

Contracts are extremely important tools for businesses, as they solidify your business deals and afford protections. 
Unfortunately, the norm in the business world is to have lengthy, wordy contracts, full of legalese. In some cases, they are unnecessarily complicated and poorly structured. Some argue this is to ensure the relevance of lawyers—only lawyers can actually understand the substance of the agreement, forcing the users to spend more time working with lawyers rather than moving forward with their commercial relationship.
A key element of the NewLaw movement is to shift away from this lawyer-centric model and move to a user-centric model, where lawyers provide value by drafting documents that both protect the parties legally and can actually be understood by the people who use them. This shouldn’t be a groundbreaking approach, but it really is. 
GE Shrink Their Contracts 
The benefits of simplified contracts were observed at GE, when GE Aviation combined its three business units into their Digital Solutions unit. 
They had interested customers, but struggled to close deals because their customers had to sign 100 page long contracts before starting work. This also made negotiations more complicated. 
It was then that Shawn Burton, Digital Solutions’ General Counsel, decided to start his mission to create contracts in plain language. He’s written more about plain language contracts here. 
They ended up condensing seven separate contracts into just one, five-page contract. 
With this move, they found that their negotiation time went down 60 percent. 
Plain contracts are the future—helping startups and entrepreneurs take control over their own business dealings. What’s more, GE Aviation provides high risk services to the Department of Defence and other Defence contractors, so it’s just not small businesses making this move. 
Unfair Contract Terms 
Going back to Kanye: he also mentions unfair contract terms. He is starting his fight against large recording and publishing companies, arguing they exploit musicians by bombarding them with contracts they don’t understand. 
Complicated contracts allow parties who have larger bargaining power – and more money to spend on legal services – to exploit smaller or less represented counterparts. 
Kanye isn’t the only one concerned with unfair contract terms. The ACCC enforces and regulates Australian Consumer Law, which includes protection against unfair terms in standard form contracts. 
The Australian Consumer Law not only protects consumers, but small businesses as well. Regulations against unfair contract terms seek to protect consumers and businesses, particularly where they do not have the opportunity to negotiate terms of the contract. 
While a court decides the potential unfairness of a contract term, the ACCC suggests considering:
The imbalance between rights and obligations of the partiesWhether the term is reasonably necessary to protect legitimate interests of the businessWhether it would cause detriment if the term was enforcedHow transparent the term is 
This reinforces the idea that the more complicated contracts are, the less transparent the terms are—allowing parties to exploit existing power imbalances. 
Who wins when a contract is not properly understood by all parties? Nobody, except the lawyers who are paid to conduct the inevitable dispute. 
Designing Simplified Contracts 

Kanye may not have been the first to talk about simple contracts, and he certainly won’t be the last. But we’re behind the idea of understandable, plain English contracts. Let’s run through some ways the legal industry is making contracts work better for users. 
Legal Design Thinking 
Design Thinking could be the means to achieving understandable contracts. It’s been adopted by many industries to foster innovation and improve customer experience. 
Disappointingly, the legal industry has not always been at the forefront of incorporating Design Thinking into its operations, but many are seeking to improve this. 
Legal Design Thinking endeavours to combine the expertise of lawyers and designers to formulate user-centric solutions that serve a real need. 
User experience is about focussing on not only your client’s needs, but also on the impression your client’s documents will make on their clients (i.e. the end user). Will the end user pick up this document and understand the business they’re dealing with? Or will they be confused by long legal sentences that don’t make commercial sense in context? Does everyone understand their obligations and rights, or are they just signing another long document? Worse, will they become so confused that they just walk away from your client’s business?
The goal of Legal Design Thinking isn’t just to deliver a better customer experience or increase profits. It’s also about empowering people who interact with the legal system or use contracts written by lawyers—helping them understand what’s actually going on. 
The world reacts to change and adapts, so it’s only fitting that the legal industry does, too. Whether you’re a large corporation or a small business owner, Legal Design Thinking can help you adapt to people’s changing behaviours around the way they consume information. 
With more people desiring a smooth user experience when interacting with documents, it’s smart to think about whether your contracts can be clearly understood by those who read them. 
You could even do this through a Comic Contract. 
Comic Contracts 
Robert de Rooy, who is a South Africa-based attorney, founded a concept called Comic Contracts. 
These Comic Contracts are legally binding. The parties are represented by characters in the comic, the terms of the contract are captured in pictures, and the actual comic is the contract. 
de Rooy created this model with the intention of helping many different demographics: illiterate people, people not literate in the language of the contract, multicultural workplaces, people who suffer from reading or intellectual disabilities, or literally just anyone. 
These contracts have been praised by some for their transparency and simplicity. Basically, Comic Contracts can help parties overcome power imbalances by providing a clearly comprehensible document, which further speaks to the merits of designing simpler contracts. 
Key Takeaways 
Regardless of your stance on Kanye, some say he made the move to plain English contracts famous. In any case, there is still a shift away from complicated and legalese contracts. 
Complicated contracts have the effect of highlighting power imbalances between parties and hiding unfair contract terms. 
As business owners providing services, or as consumers purchasing goods, we enter into contracts every day. 
At Sprintlaw, we believe it is our duty as commercial lawyers to ensure that contracts are drafted in a way that can be understood by those who use them. After all, is it even an agreement if no one understands what they’re agreeing to? 
If you’re looking for agreements that achieve the balance of legal protection and being easily understood by your clients, get in touch with us! 
The post It’s Time For Simpler Contracts: Kanye West Thinks So appeared first on Sprintlaw.

In Australia, you can direct your employees to not disclose their salary. This is known as ‘pay secrecy.’
Employees are often prohibited from discussing their salary and remuneration through pay secrecy clauses in their employment contract. Pay secrecy clauses are particularly common in industries that offer bonuses or discretionary incentives. Some businesses use these clauses to differentiate pay amongst employees.
So, pay secrecy exists and it is perfectly legal. But is it the best option for your business and employees?
Pay secrecy clauses reduce employee bargaining power and often result in economic disadvantage. Pay secrecy is also known to significantly extend the gender pay gap.
So, if you’re considering incorporating pay secrecy clauses into your employee contracts, it’s important to wrap your head around exactly what a pay secrecy clause is and how it functions.
Read on to make an informed decision about pay secrecy and whether you should incorporate it into your business.
What Are Pay Secrecy Clauses?
Pay secrecy clauses prohibit your employees from discussing their salary and remuneration. These clauses often direct employees to not discuss their pay with their coworkers.
Pay secrecy clauses are legal in Australian employment contracts.
These clauses have, however, been banned and made legally unenforceable in the United States of America and the United Kingdom. The US and UK did this in an attempt to decrease discrimination and disempowerment of employees.
In 2015, Australia’s Gender Pay Gap Bill attempted to ban pay secrecy clauses, but it was unsuccessful.
Pay secrecy clauses act in the same manner as confidentiality clauses. Your employees’ pay is confidential between you and your employee, to the exclusion of all others.
What Are The Disadvantages Of Pay Secrecy Clauses?
Before you introduce pay secrecy clauses into your business, you should be aware of the disadvantages associated with pay secrecy. Incorporating pay secrecy into your employment contracts is ultimately your choice, but it’s important you know the risks involved.
1. Pay Secrecy Can Lead To Workplace Inequality
Pay secrecy can cause both actual and perceived inequality.
Actual inequality can arise when a business uses pay secrecy clauses to unfairly differentiate pay between employees, without the employees knowing.
Perceived inequality can arise when a business incorporates pay secrecy clauses into their employee contracts and, as a result, employees assume that pay inequality exists.
As a business owner, both actual and perceived inequality can be detrimental to your business’ standards and reputation.
Employees reasonably expect to be paid the same as coworkers who engage in the same work as they do. By withholding information through pay secrecy clauses, employees are likely to believe that this is due to unequal pay and unfairness within your business.
Pay secrecy is often associated with extending the gender and racial pay gap, as well as enabling workplace favouritism.
Let’s look further into pay secrecy’s impact on the gender pay gap: 
In the public sector, where pay is transparent, the gender pay gap sits at 12.2%.In the private sector, where there is no requirement for pay transparency, there is a gender pay gap of 21.3%.So, there’s a 9.1% difference between the gender pay gaps in the public and private sector. It would be reasonable to state that pay secrecy clauses contribute significantly to these figures.
Understandably, there is a drive to remove pay secrecy and replace it with pay transparency, eradicating inequalities.
2. Pay Secrecy Can Decrease Motivation
Not only does pay secrecy permit an assumption of inequality, it may also decrease your employees’ motivation.
If your employees are under the impression that pay secrecy is amounting to unequal pay, it can have a direct negative impact on their motivation and job satisfaction levels.
Employee motivation stems from reward for efforts. If the employee is putting in significant effort and getting rewarded with pay that they’re not entirely sure is equal to their coworkers, their efforts may decrease.
Employees tend to compare their efforts and outcomes to those of their coworkers. This encourages and motivates employees to continue their efforts in your business. Pay secrecy creates a direct obstacle in achieving this motivation. When employees are unaware of others’ outcomes, such as pay, they’ll probably be less motivated.
3. Pay Secrecy Negatively Impacts Employee Culture
Most employees want to be recognised and appreciated by the business they work for. The business’ appreciation and respect for employees is often symbolised through pay, incentives and bonuses.
When pay is kept secret, especially incentive pay or bonuses, employees’ perception of the business’ respect and appreciation of them becomes blurred and unclear.
Withholding pay information often leads employees to question the motive behind the pay secrecy clause in their contract. Employees can assume that this is due to unfairness and inequality between employees’ pay. This creates a decrease in their trust and loyalty in the business.
Employee culture is super important in small and medium sized businesses. Pay secrecy can cause significant upset amongst employees and negatively affect your business’ reputation and employee culture.
Are There Any Advantages Of Pay Secrecy? 
Sure there are. Pay secrecy wouldn’t exist if there were no advantages in having it. 
Let’s run through some of the key advantages of pay secrecy. 
1. Pay Secrecy Can Create Organisational Control and Less Conflict
Many private companies incorporate pay secrecy clauses into employee contracts to increase organisational control and limit conflict.
Essentially, their argument is that if someone doesn’t know they’re being paid less than their coworker, conflict can’t erupt.
Differences in pay can frequently cause conflict and awkwardness among employees. Pay secrecy bypasses this conflict altogether, as no one knows who’s being paid what.
2. Pay Secrecy Can Help Protect Employees’ Privacy
Pay secrecy clauses can be advantageous in ensuring your employees’ privacy.
How much somebody gets paid is generally considered to be personal and private information. Pay secrecy clauses certainly safeguard this idea.
While this may be an important factor to some, it may not align with the wishes of all your employees. Pay transparency may trump some employees’ value of privacy, so this is something your business will have to weigh up.
3. Pay Secrecy Gives The Employer An Advantage in Salary Negotiation
Pay secrecy strengthens a business’ position in negotiating employees’ salary and working conditions. It gives employers greater bargaining power when discussing an employees salary and work conditions. 
A consequence of this may be as follows:
Person A and person B could do the exact same job, though receive very different pay for their work. Ultimately it would be dependent on the employees’ negotiating skills as to what their salary and work conditions end up being. 
While, from a first glance, this increased bargaining power may seem advantageous to business owners, it’s important to acknowledge pay secrecy can add to the gender pay gap and create inequality.
So, when you’re considering the role of pay secrecy clauses in your organisation, don’t just think about the advantages it brings to you as the employer. This is a sensitive and nuanced issue. You should think about the long-term negative consequences pay secrecy could have on your workplace culture.
So, What Is The Alternative?
Pay transparency.
This is where pay secrecy clauses no longer exist. You could publish pay grades online, make them accessible though the interview process or display them through an accessible employee file.
Pay transparency allows your employees to be aware of how much they are getting paid in comparison to their coworkers and the market value.
Introducing pay transparency can boost the reputation of your business, limit the gender pay gap and provide greater opportunities for employees to enjoy equal bargaining power, appreciation and respect.
Conclusion 
Pay secrecy is a controversial topic.
When determining whether pay secrecy is something you should incorporate into your business, it is important to be aware of the risks involved.
Equally, when determining whether to remove pay secrecy from your business, you should be aware of the advantages you may be foregoing.
If you have any questions regarding pay secrecy, do not hesitate to contact us!
For a free, no-obligations chat, reach out to us at [email protected] or on 1800 730 617.
The post Pay Secrecy: Can You Tell Employees Keep Their Salary Secret? appeared first on Sprintlaw.