Starting a business is a huge financial responsibility. When you’re just starting up, you’ll need some cash in your pocket to get the ball rolling. And the first people you might turn to for support are your friends and family. You might have heard of this as the “friends and family round”.
Raising capital means getting funding from others that would help your business grow. You can raise capital from friends and family through two main ways – debt or equity. Though it might seem simple, there is a right way to raise capital from friends and family.
Too often many startups get this wrong, as they think friends and family are an easy first opportunity for some extra $$. But even when you are doing business with friends and family, you need to treat them with the same level of professionalism as you would with any other investor.
In this article, we’ll walk you through how to raise capital from friends and family the right way.
Debt Or Equity – Which One Is Right For Me?
Your first step is deciding how you want to raise that capital.
There are many different ways you can get some early cash to get your business running (for a broader understanding on financing your business, head over to our Finance Guide here). But when you reach out to friends or family, generally your options are debt capital or equity capital.
Debt
When you turn to friends and family for debt capital, this usually means you’re getting a private loan.
There are two types of private loans – secured and unsecured. Put simply, a secured loan is when you have personal or valuable assets (such as your house) that the lender takes as “security”. An unsecured loan does not have this.
And while it might seem like your friend or relative is lending you money in good faith, they might still have lingering questions. How much is the loan exactly? What’s the interest rate? When will it be repaid? What happens if the loan isn’t repaid?
To make sure you’re doing it right, and to avoid any awkward situations or relationships later, it’s better to set the ground rules and make sure your legals are straight.
The type of contract you will need is called a Loan Agreement.
If it is a secured loan, you might need to register the ‘security’ on the Personal Property Securities Register (PPSR). You might also need a separate Security Agreement.
You can find out more about loans here.
A loan is a great option if you can afford making repayments and have friends and family who’d be happy to lend you money. It’s especially good if you want don’t want to give away too much equity too soon.
But, for most startups and small businesses, this isn’t the case. Many founders cannot afford making repayments, and many aren’t willing to expose their personal assets as security.
This is when equity might be a more attractive option
Equity
Equity raising is when someone invests in your company in return for part ownership or “shares” (even if you aren’t actually making any money yet!). There are also variations of equity, such as the “SAFE Note” introduced by Y Combinator in 2013, or the more traditional “convertible notes” which we wrote about here.
Equity might sound like a win for startup founders: getting cash in their pockets now without having to pay it back. But, it has its own risks. It means you are giving away part ownership of your business. While giving away 10% of your business might seem like nothing now, this 10% could be worth $1 million in a few years. And that’s $1 million you could have kept.
This is why equity raising is an attractive opportunity to investors: it might be high risk, but a potentially big win for them in the long run.
As you can see, equity raising comes with its own risks and benefits for both startup founders and investors. So if you’ve decided to go ahead with raising equity capital from friends and family, it’s important to do it right.
So what’s involved in raising equity?
Step One: The Pitch
When you first approach friends and family for equity capital, you will need to start as you would with any other investor: with a “pitch”.
In startup lingo, a “pitch” is when you lay out your business idea, what problem it’s solving and where you see it going in the future. This is how you convince them to put their money in the growth of your startup.
So, before you do your big pitch in front of friends and family, you’ll need three things.
First, you’ll need a “pitch deck” – a presentation of simple, captivating slides that would sum up your pitch and appeal to your friends and family.
Second, it’s always a good idea to prepare a pack of documents, which includes any financial or industry evidence that would support the viability of your business idea. These documents give your pitch credibility and reassure your potential investors that you aren’t over-valuing your startup.
Lastly, you’ll need a Term Sheet. The Term Sheet essentially sets out the key terms of the investment. When requesting investment from friends and family, they might be asking questions like: how much ownership do I get in return? What relationship will this mean in the long run? How do I know my money is being well spent? A Term Sheet is your opportunity to answer these questions for them.
Having these three documents prepared for helps investors see that you’ve really thought about this and how it would work going forward, making them confident that they’re putting their money into a real business relationship.
And, if you want to be extra cautious, it might be a good idea to think about having a Non-Disclosure Agreement (NDA) in place before you start discussions with investors. This helps protect any confidential information that you disclose during your meetings (but be careful to only use an NDA in the right situations!).
Step Two: Getting It Down In Writing
So you’ve pitched your business to your friends and family and they’re keen to get on board as investors – great!
What’s next?
Now, you’ll need to think about your legals.
To make sure you’re fulfilling all your legal obligations to your investors, you need three types of legal documents:
A Shareholders AgreementA Share Subscription AgreementIP Assignment Deed
Sounds like a mouthful, but don’t stress! We’re here to unpack it for you.
Once your friend or relative has come on board with part ownership of your company, they are officially a “shareholder”.
This is always an exciting opportunity, but you want to make sure you’re both on the same page with how this new relationship will work:
How are decisions made?What happens when a shareholder wants to leave the company?What happens if there is a dispute?
Even if you’re in business with friends and family, having ground rules is always healthy for the relationship and business, especially as your business grows and the stakes become higher.
Which is why you need a Shareholders Agreement.
A Shareholders Agreement is an important contract between business owners that covers matters from share ownership to the process for issuing new shares, the payment of dividends, and how to resolve disputes.
If there is already an existing Shareholders Agreement, it’s a good idea to check whether the existing Agreement needs to be reworked to the needs of the new shareholders.
Next, you will also need a Share Subscription Agreement. This is a separate contract under which a new shareholder (or the “subscriber”) is issued shares. A Share Subscription Agreement outlines the promise made by a potential shareholder to contribute funds in return for equity in your company. Specifically, it will set out the number of shares to be issued, any vesting conditions, the timing of the share issue and the price of the shares.
In most cases, it would be fine to provide a Share Subscription Letter (which is still legally binding!). But for more sophisticated investors, they might be after a more comprehensive Share Subscription Agreement – a longer form contract with extra protections for both sides.
Finally, you’ll need an IP Assignment Deed. Often, this can be included in the Shareholders Agreement, but it works fine as a separate document too. In any business, it’s important to protect your intellectual property (IP). This includes anything from branding to products and everyday know-hows of your business.
An IP Assignment Deed makes sure that any IP assets are owned by the company and you’re making sure that value is created in the company. You don’t want to later find out that some key IP is individually owned by a shareholder!
What To Take Away…
So we’ve given you a quick lesson on the two types of ways friends and family can help your business get on its feet – debt and equity. But, it’s important to make sure these arrangements are put down in the appropriate legal documents.
Why?
Even if they are your friends and family, it is ultimately a business relationship so it’s always a good idea to make sure you’re both on the same page. Having the right contracts in place will help avoid any disputes about what terms you both agreed to, and can help avoid many awkward situations in the future. This way, both you and your investors will have clarity and confidence in your business relationship.
When your business eventually grows, the last thing you want is a messy situation where you and your shareholders clash because you don’t have any solid agreements in writing.
Raising capital from friends and family the right way means you have a professional business relationship, both sides are kept happy and you can attend those family barbeques without awkward questions.
Still don’t understand what all the different legal documents mean? Or need help getting your capital investments down in writing?
We’re here to help! Our friendly team can set you up with a consultation with one of our corporate lawyers to advise you on your next steps, or we can get started right away on your legal documents.
You can reach our friendly team at 1800 730 617 or drop us a line at [email protected] for a free, no-obligations chat.
The post Raising Capital From Friends And Family: How To Do It Right appeared first on Sprintlaw.

For many businesses invoicing customers for the first time, you may be wondering if you should include GST in your prices. 
Regardless of whether you charge GST or not, you should always be clear about this with your customers, and state whether GST is being charged on your invoices. 
Here’s a guide to when you should include GST in your prices, and the potential benefits of registering for GST even when you don’t strictly need to. 
What Is GST?
The Goods and Services Tax (GST) is a 10% tax on goods and services sold or supplied in Australia. It was introduced in 2000 by the Howard Government. 
Do I Have To Register For GST?
According to the ATO, you must register for GST if;
Your annual business income is $75,000 + a year, or it will likely be this amount if estimatingYour annual business income is $150,000 + a year and you’re a non profit organisation You want to claim tax fuel creditsYour business administers a taxi service
If you don’t fit into the above, you have a choice on whether you want to register for GST.
Benefits Of Registering For GST When You Don’t Need To
There are several benefits associated with registering for GST when you don’t strictly have to. 
For starters, you can claim GST credits for purchases related to your business. You can only do this if you’re registered for GST. 
If your business is expected to grow, and you create a customer expectation that your goods or services cost a certain amount, what happens when you suddenly need to pay GST? If you have to charge your customers 10% extra, this could create resentment among your existing customer base. 
It may be beneficial to just charge GST from the very start to get into the habit of book keeping for GST, and to get your customers familiar with how much your goods or services will cost.
Finally, if you’re a start up and want to look really successful from the get go, you might consider registering for GST even though you don’t have to yet. 
Downsides To Voluntarily Registering For GST
Registering for GST increases your paperwork. Although, if you earn less than $75,000 a year and are voluntarily paying GST, you’ll only need to lodge a Business Activity Statement once a year (rather than 4 times a year for most GST charging entities). 
Having to pay GST to the ATO can also cause cash flow troubles as, for some time before you transfer it, that 10% tax is sitting in your business’ bank account. 
Need Legal Help With Setting Up Your Business?
As a legal service, we can’t give tax advice, but if you need help with any other legal aspect of setting up your business, we’re here to help!
If you want to speak with a lawyer about what sort of business structure you need, or if you need help registering a company or drafting contracts, feel free to get in touch with us on 1800 730 617 or at [email protected]. We’re available any time for a free consult. 
The post When Should I Include GST In My Prices? appeared first on Sprintlaw.

Having toilet breaks during work sounds like a pretty basic and common entitlement. In fact, you wouldn’t think that it’s necessary for a case to come around to confirm this basic right. 
However, the recent case against a ‘reckless’ McDonald’s franchisee in Queensland is a reminder that even these necessities can be ignored in a fast-paced environment, and it’s important for employers to understand their obligations to employees in relation to health and safety. 
Before we go through the details of the case, it’s important to understand how McDonald’s has set up their employee entitlements. 
McDonald’s Employee Entitlements
Under the McDonald’s Australia Enterprise Agreement 2013, all McDonald’s employees are entitled to a paid 10 minute break when they work between four to nine hours. 
If employees work longer than nine hours, they are then entitled to two 10 minute breaks (this doesn’t include their meal breaks for working more than 5 hours). 
However, a recent Facebook post by a McDonald’s franchise in Queensland declared they were not obliged to let staff use the toilet outside of their scheduled breaks. In other words, those 10 minute breaks were the only opportunity employees got to use the bathroom or drink water. Any other request to use the toilet would be denied because. technically, those are ‘work hours’. 
Denying employees their right to a toilet break can actually constitute a breach of the employer’s duty of care—but don’t worry, we’ll cover this shortly. First, let’s discuss the case that everyone’s talking about. 
What Was The McDonald’s Case About?
The Retail and Fast Food Workers Union brought the case against Tantex Holdings, who owns six McDonald’s restaurants in Queensland, on behalf of former employee Chiara Staines. The Union alleged that Chiara had been denied her 10 minute paid drink and bathroom breaks; an entitlement which was outlined in the enterprise agreement. 
Ms Staines complained that her work was ‘fast-paced, hot with a constant smell of food’ and that ‘the environment was stressful and demanding’. As such, Justice Logan held that, “the right to access the toilet or a drink of water was, in my view, a workplace right.” He added, “it was unconscionable…absolutely to deny workers an ability to use the toilet when required or to drink water as needed.” 
He also commented that statute requires employers to provide toilet facilities for work health and safety reasons, but it would be absurd to provide this if employees were not given reasonable access to such facilities. 
The franchise admitted that they had, in fact, denied Ms Staines these breaks during her employment with them. Accordingly, they were ordered to pay Ms Staines $1,000 in compensation and the Federal Court ruled that Australian workers have the right to 
drink and toilet breaks.
What Are The Employer’s Duties?
If we shift our focus from the McDonald’s enterprise agreement for a moment, we can still see that the employer has duties under Occupational Health and Safety legislation. 
Looking specifically at the Work Health and Safety Act 2011 (Qld), we are told that employers have a broad duty to ensure the health and safety of their employees. So, how serious is this duty when it comes to toilet breaks?
Duty Of Care
According to the OHS Reps, this duty includes providing employees with the appropriate rest breaks to relieve fatigue and eat meals. They also explain that workers must be able to have a toilet break when needed. 
If an employer denies any of these rights, like in the McDonald’s case, the employer is technically breaching their duty of care by putting their employee’s health at risk. After all, not being able to use the bathroom or drink water when needed does pose some serious risks to a person’s health. 
The OHS Reps also pointed out that where the work involves high temperatures or monotonous work, employees have a greater need for toilet breaks and water. As such, an employer’s duties to their employees will depend on the actual environment and nature of work being done. 
But of course, WHS obligations are not limited to these basic necessities. For example, if your employees are working from home, you’d need to know how to create a safe workplace for your employees remotely – you can read more about this here. 
WHS obligations are essential to every workplace and should be carefully considered no matter what kind of work you’re providing. 
Need Help?
An employer’s duty of care to their employees is one of the most important aspects of the employment relationship. 
Whether it be providing adequate work breaks or minimising safety hazards in the workplace, your Work Health and Safety considerations are worth looking at in detail, especially in light of the changes we’re experiencing due to COVID-19. 
If you’re an employer and you’re not too sure about your obligations to your employees, don’t stress! 
We’ve got a team of lawyers who are more than happy to help you out. You can reach us at [email protected] or contact us on 1800 730 617 for a free chat about your employer obligations. 
The post Do Australian Workers Have The Right To Toilet Breaks? appeared first on Sprintlaw.

Your co-founder can make or break your business. 
Giving serious thought to who you choose as a co-founder, and having well drafted contracts in place from the outset, is vital to the success of your enterprise.
In this article, we’ll explore what you should look for in a potential co-founder, as well as the key contracts you should use to protect your relationship. 
What Should You Look For in a Co-Founder?
There are many factors you should take into account when choosing a co-founder for your business. Let’s run through some of the key ones. 
Personality: You will be spending a lot of time with your co-founder/s, so you need to choose a co-founder whose personality does not annoy you! While you don’t have to be best friends, it’s important you get along and can communicate well. 
Ambition: The co-founder you choose should be able to take initiative, work independently, and have a matched ambition for the startup.
Work ethic: What if a co-founder is working way less than other co-founders, but is reaping the same equity or benefits? Not to mention the work that’s just not getting done, meaning other co-founders have to step up their hours. If you and your co-founder don’t have the same work ethic, it can be easy for the team to become resentful. You should choose a co-founder who is honest about the hours they expect to contribute. This conversation should be had very early on, before you decide on your equity split.
Different experience and skills: Choose a co-founder who can meaningfully contribute to an area of the startup you do not have the skills to contribute to. For example, you might have thought of the original idea of the startup, but do not have the technological ability to execute the idea.
How Much Equity To Give A Co-Founder
Before jumping to the conclusion of splitting equity evenly, it’s important to consider the following factors (even if it’s an awkward conversation!):
The amount of hours each co-founder will work on a regular basisThe relevant experience of each co-founderThe value each co-founder brings to the startupTime commitment: how long the co-founder sees themselves staying in the start-up
Frank Demmler, an Associate Teaching Professor of Entrepreneurship, cautions against automatically dividing equity equally amongst co-founders and uses this graph as a guide to discussing equity to give each co-founder. In his words, co-founders should “consider the past, current, and future relative contributions of the founding team members to the ultimate success of the company.”
How To Have A Good Relationship With Your Co-Founder
Communication about all of the above with your co-founders is a necessary first step so that you all have a clear idea of what each co-founder’s expected contribution and role will be.
The next step should be to get all of that in writing!
If you’re entering into a partnership business structure, you will need a Partnership Agreement. 
If you’re setting up under a company structure, you will eventually need a legally binding Shareholders Agreement. Some startups can’t afford a Shareholders Agreement right away, or they have not finalised important decisions around who the directors and shareholders will be. In these cases, startups often use a Founders Term Sheet. 
A Founders Term Sheet is a useful tool to guide discussion around topics your co-founders might not have even thought of yet. Though it is not a legally binding document, it is an agreement to outline the key points of your relationship. 
A Founders Term Sheet will lay out each co-founder’s rights and responsibilities. It can be used in commercial discussions or with investors to show your business is organised and has given thought to future decisions affecting your company. This can increase investor’s confidence and lay the foundations for your Shareholders Agreement.
What’s Included In A Partnership Agreement And Shareholders Agreement?
While these documents will be drafted quite differently, both have a similar purpose: to be a formal, legally binding written document that will govern the relationship between co-founders. 
Think of these agreements as a tool to avoid future disputes, and as something to refer to should conflict or confusion arise down the track. 
Both agreements should be tailored to your business, but will generally address the following points:
How important decisions are made and who makes themHow disputes are resolvedHow long co-founders are expected to stayThe course of action if a co-founder wants to leaveHow profit and loss is distributedEach co-founder’s roles and responsibilities
A Shareholders Agreement will also include:
How share are allocatedWhen shares can be issued and sold
While a Partnership Agreement will address:
The purpose of the partnershipHow long the partnership is expected to run for
What To Take Away…
The importance of choosing a co-founder who fits your values and the values of your enterprise cannot be understated. 
After you’ve given careful consideration to choosing your co-founder, it’s vital that you contractualise your relationship with a Founders Term Sheet (and later a Shareholders Agreement), or with a Partnership Agreement. This ensures you’re all on the same page and helps avoid future disagreements.
Best of luck with choosing your co-founder! Don’t hesitate to reach out to our expert startup lawyers here at Sprintlaw on 1800 730 617 or [email protected] for legal advice. We’re available for a free consultation any time.
The post How To Choose A Co-Founder appeared first on Sprintlaw.

Big Mac or Big Jack? 
In late August 2020, McDonald’s Asia Pacific (McDonald’s) filed a lawsuit in the Federal Court against Hungry Jack’s — claiming its rival’s new burgers the “Big Jack” and “Mega Jack” are infringing on their intellectual property and are essentially ripping off the “Big Mac” and “Mega Mac”. 
The case brings to light a number of issues surrounding the use of trade marks to protect businesses’ intellectual property, including what it means to act ‘in bad faith’. Ironically, this is a concept imported into the Australian legal system from Hungry Jack’s historical dispute with Burger King.
A Trade Mark Backstory
When the American fast food empire Burger King looked to expand its franchise to Australia, it found that the name had already been registered to a takeaway food shop in South Australia. Thus, the Hungry Jack’s brand was born, allowing Australian Burger King franchisee, Jack Cowin, to open his store in 1971.
Not long after the Australian trademark on the Burger King name lapsed in 1996, Burger King Corporation began to open its own stores across Australia, and a legal dispute between Hungry Jack’s and Burger King Corporation ensued.
Hungry Jack’s won and subsequently absorbed the remaining Burger King stores in Australia—making it the largest fast food burger chain to rival McDonald’s in Australia. 
The case also introduced the American legal concept of ‘good faith’ into the Australian legal system.
The Big Mac Beef
So, let’s move on to this new beef between McDonald’s and Hungry Jack’s. 
In documents filed recently in court, McDonald’s claims that the Big Mac trade mark – which it has held since 1973 (and ‘Mega Mac’ since 2013) – has “acquired a substantial and valuable reputation” in Australia. 
McDonald’s goes on to say that the Big Jack trade mark is “substantially identical with or deceptively similar to” the Big Mac trade mark. 
Additionally, McDonald’s is arguing that the Big Jack trade mark is “likely to deceive or cause confusion” for consumers.
McDonald’s is asserting that Hungry Jack’s “deliberately adopted or imitated” the “distinctive appearance or build” of the Big Mac in creating its new Big Jack. Here’s why:
In its ingredients and advertising tagline, McDonald’s describes the Big Mac as: “two all-beef patties, special sauce, lettuce, cheese, pickles, onions – on a sesame seed bun”. 
In contrast, Hungry Jack’s has described the Big Jack as: “two flame-grilled 100% Aussie beef patties, topped with melted cheese, special sauce, fresh lettuce, pickles and onions on a toasted sesame seed bun”.
It is also alleged that Hungry Jack’s registered the Big Jack trade mark “in bad faith”. The Big Jack trade mark was filed in November 2019 and accepted in February 2020 without any published opposition.
In response, Hungry Jack’s is saying that “it is clearly evident that customers are not confused or misled that the Big Jack and Mega Jack burgers are only available at Hungry Jack’s” with the product being “different from McDonald’s products in their size, taste, presentation and packaging.” 
Hungry Jack’s went on to detail how the Big Jack was distinctive to the Big Mac, having more meat, fresh onions and being a larger size.
What Does The Law Say?
We’ve mentioned a few legal terms and some legal jargon. But what does this actually mean and does any of it matter for your business? 
Here’s what you need to know. 
In Australia, the laws surrounding trade marks are governed under the Trade Marks Act 1995 (Cth) and administered by IP Australia. We’ll now run through some of the key sections of the Trade Marks Act mentioned in this case. 
Is the Big Jack trade mark “substantially identical with or deceptively similar to” the Big Mac trade mark? 
One of the issues lying at the heart of the dispute between McDonald’s and Hungry Jack’s is whether the Big Jack trade mark is too similar to the existing Big Mac trade mark.
To answer this, the court will need to answer whether customers are likely to be confused by the different trade marks. In particular, McDonald’s claims that customers may be confused into thinking that there is a connection between the Big Jack burger and their own Big Mac burger.
If the Big Jack trade mark is found to be substantially identical with or deceptively similar to the Big Mac trade mark, McDonald’s will be able to oppose it under section 44 of the Trade Marks Act 1995.
Has the Big Mac trade mark “acquired a reputation in Australia”? 
McDonald’s is also seeking to oppose the Big Jack trade mark on the grounds that the Big Mac trade mark has acquired a reputation in Australia under section 60 of the Trade Marks Act 1995. 
To successfully show that the Big Mac trade mark has acquired a reputation in Australia, McDonald’s will need to show:
That, as a matter of fact, the Big Mac trade mark has acquired a reputation; andBecause of its reputation, the use of the Big Jack trade mark would be likely to deceive or cause confusion. 
It may be easy to see how McDonald’s can argue that the Big Mac trade mark has acquired a reputation in Australia—after all, who doesn’t know what a Big Mac is? 
But it could be more difficult to show that the Big Jack trade mark is likely to deceive or cause confusion. Are Hungry Jack’s customers buying a Big Jack burger because they are under the impression that it is a McDonald’s Big Mac burger? Do they think there is some connection between them, such as a collaboration between McDonald’s and Hungry Jack’s? 
Did Hungry Jack’s register the trade mark “in bad faith”? 
Additionally, McDonald’s claims that Hungry Jack’s registered the Big Jack trade mark “in bad faith”—a ground for opposition found in section 62A of the Trade Marks Act 1995. 
Bad faith is a blanket term used to describe unacceptable commercial behaviour and acts made with dishonest or fraudulent intent. 
McDonald’s has alleged that Hungry Jack’s knowingly infringed on their intellectual property in “flagrant and wilful disregard” of the McDonald’s trade marks, particularly as they knew about the existing trade marks. 
To further back up their argument, McDonald’s believes the look and build of the Big Jack is so similar to the Big Mac that Hungry Jack’s has “deliberately adopted or imitated” the product.
I Think Someone Has Infringed My Trade Mark: What Do I Do?
It is important to establish if your trade mark has been infringed before taking formal action to protect your intellectual property. 
To do this, you will need to demonstrate two things:
That the infringing trade mark and your trade mark are registered in relation to, and are being used on, identical or similar goods and/or services; andThe infringing trade mark may cause confusion about where the product is coming from because it is sufficiently similar to your own trade mark.
Send a Letter of Demand
Once you have gathered evidence that your trade mark is being infringed, you should seek legal advice from an intellectual property lawyer. The lawyer may consider sending the alleged infringer a letter of demand. 
In some cases, an effective letter of demand will be enough to stop a person from infringing your trade mark, and therefore save you time and money involved in taking them to court. 
A good letter of demand will outline your ownership of the trade mark and indicate all of the infringing behaviour according to the Trade Marks Act. It should also provide for a period of time for the person to stop infringing your trade mark, return all infringing material and property, and supply the necessary information for you to calculate a claim for compensation.
However, in other cases, the infringer may try to hide or destroy evidence to weaken your case against them. It is always best to seek legal advice specific to your own specific situation.
Undergo Alternative Dispute Resolution
You may also seek to undertake Alternative Dispute Resolution (ADR) before going to court. 
ADR – whether you choose mediation, arbitration, or expert determination – is often less expensive and time-consuming than court processes, and allows for participants to determine the parameters that best suit their circumstances.
Take them to court
If all else fails, you may wish to take the infringer to court as a last resort. 
It is recommended that you seek professional legal advice before starting infringement proceedings, as they can be very expensive, stressful and lengthy and may expose your intellectual property rights to being challenged by the other party.
Some examples of what you may wish to apply for in court include:
An interim injunction. Where the infringing conduct is serious enough that paid damages wouldn’t be enough, the court may order the other party to immediately perform or stop certain actions or behaviours. This can happen even if the alleged infringing conduct has not yet been proven. These orders are generally in place for very short periods of time before parties are required to attend court again to argue whether the injunction should be continued. An important thing to note: if it is found that an interim injunction should not have been granted, you may be required to pay the other party compensation.A preliminary discovery. This order may help you discover the identity of the person infringing your trade mark by requiring a person or company to provide you with information about possible infringers. An Anton Piller order. This is a search warrant that allows you (the owner of an IP right) to search the premises of an infringer and seize specific items that relate to the infringing conduct. 
Enforcing your intellectual property rights can be complex, and it’s often difficult to determine the best option for your business. That’s why it’s a good idea to get professional advice that is specific to your situation.
It’s important that you know what rights you have, what options are available to you, the costs involved, and the likelihood of success. 
After all, the last thing you want to do is invest time and money into building your business’ reputation, only to have it taken away by a competitor using a similar trade mark! 
Want To Know More?
As you can tell, there is a lot to know about trade marks and trade mark protection—even the big guns battle it out from time to time! 
Consulting a trade mark lawyer can be extremely helpful in making sure your trade marks are properly protected, saving you a lot of headaches in the long run. 
At Sprintlaw, we have a team of experienced, friendly lawyers who can assist you with your intellectual property queries or other legal issues your business might have. 
Get in touch with our team at [email protected] or give us a call on 1800 730 617 for a free, no-obligations consultation.
The post McDonald’s vs Hungry Jack’s: What’s The Beef? appeared first on Sprintlaw.

At Sprintlaw, we’ve spoken to thousands of small businesses and startups.
Often, their biggest concern is protecting the confidential information that keeps their business unique and competitive.
Whether it be protecting your startup’s intellectual property at its early stages, or just wanting to keep early commercial discussions private, most of the time the solution could be a simple Non-Disclosure Agreement (NDA).
You might have heard other businesses say it’s important to have an NDA, and you might be thinking it’s time for you to have one sorted, too.
But what is an NDA and when might you use it? And how does it differ from a Mutual Non-Disclosure Agreement?
This article will quickly walk you through everything you need to know.
What Is A Mutual Non-Disclosure Agreement?
Put simply, a Non-Disclosure Agreement is a confidentiality agreement. It is an agreement by the parties not to disclose confidential information to other people.
A Non-Disclosure Agreement is a legal contract between parties who are about to share confidential material, information or knowledge; and want to make sure that it is actually kept confidential.
Generally, a NDA will prohibit the other party to disclose any confidential information that you provide to them.
A Mutual Non-Disclosure Agreement, on the other hand, works both ways.
In this case, a Mutual Non-Disclosure Agreement prohibits both parties from disclosing any confidential information that you provide to them.
When Do I Need A Non-Disclosure Agreement?
For small businesses and startups, there are various situations in which you may need an NDA.
If you’re a startup about to pitch to investors, you may want to have an NDA drafted to make sure that any confidential information you share about your business model is not disclosed to anyone else.
Or, if you’re any small business about to engage with another party, and you’ll be disclosing your business’ sensitive and key information, an NDA is a good way of making sure that this information does not spread.
When you’re engaging with investors, suppliers or even contractors, it’s natural that they’ll have access to some of your confidential business information.
This could include anything from your internal business admin documents to your client databases.
The last thing you want is somebody using this information and sharing it with others, and this is where an NDA may come in.
In many ways, an NDA protects confidential information that could also be seen as the ‘intellectual property’ of your business — the intangible assets that keep your business unique from its competitors.
And, while there are many ways to protect your intellectual property, navigating through these options could be a little bit overwhelming.
So, having an NDA is usually a good place to start.
This kind of contract can be handy no matter what kind of business you’re running (and this is why most businesses like to have an NDA ready for whenever they might need it).
Why Are Non-Disclosure Agreements An Important Tool For My Business?
An NDA or a Mutual NDA is more than just a legal contract that might often be used as a scare tactic!
At Sprintlaw, we’ve seen how NDAs are a great tool for small businesses and startups.
Why?
Whenever you engage in important commercial discussions, it’s always important to make sure that all parties are on the same page.
Having an NDA or a Mutual NDA between you and another party instills a degree of trust and confidence, which in turn can assist in open negotiations.
For this reason, NDAs are a valuable tool for businesses as both parties can feel reassured that any confidential information and intellectual property is protected.
Need Help With A Mutual NDA?
Thinking it’s time to get an NDA or a Mutual NDA sorted for your business?
We’re here to help!
NDAs are a great way to keep your important business information as confidential as possible.
And, even if you don’t have a particular reason to need one now, it’s always a good idea to have an NDA handy for your business (you never know what might come up!).
At Sprintlaw, we’ve helped hundreds of startups and small businesses make sure they’re prepared for situations where their confidential information is at risk.
Whether you need help preparing an NDA, a Mutual NDA or are looking for other ways to keep your information protected — we’d love to chat with you!
You can reach us at 1800 730 617 or [email protected] for a free, no-obligations chat.
The post What Is A Mutual Non-Disclosure Agreement? appeared first on Sprintlaw.

If you’re operating online – or if your business has a website – you will need some terms and conditions to control how people use the website. These are commonly referred to as Website Terms & Conditions.
You’ll need Website Terms & Conditions regardless of whether you’re actually operating an online store. For instance, you might have a website on the history of bushrangers, which only contains information and doesn’t have goods or services a customer can purchase. Alternatively, you might have a clothing store. In all of these cases, you still need Website Terms & Conditions.
Website Terms and Conditions can be a relatively short document, but it’s important to have it to limit your liability and lay out how users access your site. 
What To Include In Website Terms & Conditions
Website Terms & Conditions will typically be customised to suit the unique needs of your business and your website. However, below are some general things you should include in your Website Terms & Conditions. 
Intellectual Property
An intellectual property clause protects the content on your website through stating how people can use it. For instance, you might specify that users can use the information on your website for personal use, but not for commercial use.
Liability
What if your website has information on it that someone uses to their detriment? Let’s say, for example, that your website contains a step-by-step guide on how to pick wild mushrooms and someone relies on this information and picks poisonous mushrooms. A liability clause attempts to limit your liability as much as possible.
External Links
Often, your website will include links to third party websites, with information you of course can’t control. You should have a section in your Website Terms & Conditions that states you don’t endorse the information on the third party links, aren’t responsible for keeping these links current, and aren’t liable for information on these links.
Privacy
Your website should also have a Privacy Policy; and you can use your Website Terms & Conditions to direct the user to this Privacy Policy.
Updates
This section of your Website Terms & Conditions alerts the user that you can change your website and update your Terms & Conditions anytime you like. By using your website, the user is agreeing to these website terms and conditions.
Jurisdiction
As it is the world wide web, you could have users from anywhere! This section of your Website Terms & Conditions  states what laws govern these website terms and conditions. 
The Takeaway
You can’t control how people use the information on your website, but you can try and limit your liability as much as possible. 
Regardless of the type of business you run, a set of Website Terms and Conditions will be useful to protect how users use your website. Contact Sprintlaw on 1800 730 617 or by email at [email protected] for some expert advice! We’re available any time for a free consultation.
The post How To Write Terms & Conditions For Your Website appeared first on Sprintlaw.

Becoming a business owner can be a rewarding experience. Buying an established business rather than setting one up from the ground can be particularly advantageous. There are, however, two ways to go about this: a share sale or an asset sale. 
What Is A Share Sale? 
A share sale is where a company that has shares has made a decision to sell the entire ownership of that company to the buyer. 
The buyer now becomes a shareholder in the company, and acquires all the assets—by being the owner of the company which owns all the assets. 
All the business assets will remain with the company—including its liabilities, which creates some aversion to share sales. 
For example, if a customer of the business was sold a defective product or given negligent advice, then they would have a claim against the company that the new buyer has just taken up. 
The new buyer is now responsible for defending and paying out the claim. 
In some cases, though, the seller may provide the buyer with an indemnity so that the buyer can sue the seller in the event of a historical claim being made. 
In order to mitigate the risks that accompany a share purchase – more often than not – the buyer will have to engage in extensive and detailed due diligence to protect themselves. 
What Is An Asset Sale? 
An asset sale involves the purchase of some or all of the assets owned by a company. 
The buyer will only gain control of the assets that they are purchasing. 
These assets could be anything from equipment and buildings to intellectual property, domain names and goodwill. In this case, the seller will retain ownership of the actual company previously owning those assets. 
In this scenario, no liabilities are generally transferred across, other than those specifically defined as a “Sale Asset” in the contract of sale. 
However, from a buyer’s perspective, there may be more effort, cost and risk involved in transferring all of the contracts and client lists out of one entity and into another as part of an asset sale. 
Share Sales vs Asset Sales: Which One Should I Choose? 
When determining whether a share sale or an asset sale is right for you, there are several factors you should consider. We’ve outlined some of these below. 
Liabilities 
Share Sale: The liabilities of the company will generally transfer to the new buyer (it can even be a historical tax non-compliance!). To protect themselves in these situations, buyers often require sellers and their directors to indemnify the buyer against such claims and losses that may arise in the future.
Asset Sale: Unless the buyer has expressly assumed any liabilities in the contract in relation to particular assets, liabilities generally are not inherited by the buyer. 
Transactions 
Share Sale: As the entire company is moving, it can be a lot easier to transact. You don’t have to re-sign any contracts with clients, service providers or even employees as the entity remains the same. Having said that, if  there are “Change of Control” clauses in contracts entered into by the company, you may need to get consents of counterparties (e.g. a landlord of a lease) to go ahead with the sale. 
Asset Sale: When you’re purchasing just the assets of a business, you will need to get your clients, suppliers and employees to sign new contracts to be bound with your new entity. In some cases, it may be that third parties need to agree to the buyer’s taking the agreement (commonly in Supply Agreements).  
IP Assets 
Share Sale: As the entity that owns the IP Asset remains the same, no further action needs to be done to transfer ownership. If you’re a buyer, just make sure that the company actually owns all the IP it says it does!
Asset Sale: As assets such as trade marks and patents are registered with IP Australia, when you’ve purchased this asset, the government body will have to be notified of the transfer in ownership. You’ll also need to make sure all IP assets that are part of the sale are properly defined in the contract of sale
Stamp Duty
Stamp Duty is a state and territory based tax that governments impose on the sale of assets. All of the states and territories have different systems, so you should get specialised tax advice on this.
It is usually the buyer who pays the stamp duty, so the amount may end up adding up! Here’s a table giving you a general idea of how the requirements are different from state to state. 
State/Territory Stamp Duty New South WalesStamp duty isn’t payable on business assets except on the transfer of land and real property assets (this includes leases).There may be a nominal fee payable on the sale of business agreement. VictoriaStamp duty isn’t payable except on real property assets. Australian Capital Territory Stamp duty generally isn’t payable unless it’s for real property assets (including commercial leases). TasmaniaStamp duty generally isn’t payable unless it’s for real property assets. Stamp duty applies to goodwill and IP if the business has serviced a customer or client, or used its IP, within 12 months of the business sale. Northern TerritoryStamp duty generally is payable except in certain circumstances. There is also a broader application of stamp duty to IP assets: it applies to trade marks, patents, registered designs and copyright only if the business is carried on or will be carried on within the territory. Western AustraliaThere is no exhaustive list as to what types of properties attract stamp duty. Generally, stamp duty is applicable to business assets, subject to certain exceptions – it includes goodwill and IP. South AustraliaStamp duty is payable on the transfer of a business. It applies to the value of the assets located in the state, and includes goodwill and stock. Queensland Stamp duty is applicable to the sale of businesses, unless the sale solely involves debts or intellectual property. 
GST 
Share Sale: GST generally does not apply to the share sale price. 
Asset Sale: If you’re registered for GST and you sell, transfer or dispose of a business asset, the sale is taxable and GST would need to be paid unless the going-concern exemption applies. 
Purchase Price 
Share Sale: If the seller is a company, the buyer may be able to get a lower purchase price as the shareholders of the company are entitled to a general 50% CGT discount. This incentivises the share sale process for many business owners—particularly as, on top of the CGT, there are Small Business CGT Concessions. 
Asset Sale: There is generally no CGT discount available for the disposal of business assets. 
Key Takeaways
Deciding between a share sale and an asset sale can be a difficult decision—particularly with a range of factors to consider such as tax considerations or potential liabilities. It is important to do your due diligence before purchasing the business. 
Whether you’re purchasing a company with multiple vehicles and stock, or an online business with a trade mark and domain, we’re here to help!  
Depending on which avenue you decide to take, we can help from conducting due diligence to completing the legal documentation. Feel free to get in touch with us at [email protected] or on 1800 730 617 for a free, no-obligations chat.
The post Share Sale vs Asset Sale: What’s The Best Path When Buying A Business? appeared first on Sprintlaw.

An Option Deed – also called a Call Option Deed – is useful when you’re giving a party the rights to, at their option, buy shares in a company. 
It’s an agreement where a party gives the right to another party to purchase a certain amount of shares at a predetermined price.These shares can be either new shares granted by the company, or pre existing shares granted by a shareholder. 
Option Deeds are often drafted with an expiration date, so that if a party does not purchase their shares by a certain date, their right to buy a set amount of shares at a set price lapses.
Option Deeds can be a great way to entice potential investors or to reward shareholders!
What’s Included In An Option Deed?
An Option Deed includes details such as: 
An agreed time for when the shares are grantedWhether the shares will be granted based on reaching certain achievements
Why Sprintlaw?
It’s important to speak with a lawyer before drafting an Option Deed to ensure that it properly reflects your business’ situation. Plus, a lawyer will make sure you are aware of any other documents – such as Shareholders Agreements – that may need to be updated as a result. 
At Sprintlaw, we have experience with Option Deeds, capital raising, drafting Shareholders Agreements, and advising on other corporate and commercial related legal matters. Don’t hesitate to contact our friendly team at [email protected] or on 1800 730 617 for a free, no-obligations chat.
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Franchising can be a rewarding experience, but it is a huge step for your business. Importantly, you’ll need to make sure you have the right legal documents in place to undergo the franchising process. 
Here’s what you need to know about franchising and the documents you’ll need.
Why Should I Franchise? 
There are many advantages to franchising—particularly as it is commonplace for the franchisee to fund and provide capital for the franchise. 
Franchising allows businesses to scale and grow, which helps your brand capture more of your market and create goodwill. Customers will become more familiar with your business and brand name! 
And, just because you’re leaving your business in the hands of your franchisee, it doesn’t mean that you’ll have no control over the business. While empowering other business owners, you can still ensure and maintain the quality of your products or services. These are the types of things you’ll need to capture in your Franchise Agreement. 
What Do Documents I Need To Franchise? 
While there are many advantages to franchising, it’s a big commitment, as franchising is a highly regulated area. 
Franchises are subject to the Franchising Code of Conduct, which is enforced and administered by the ACCC. 
It is extremely important to adhere to these rules and regulations as there are hefty penalties attached in cases of non-compliance that can be issued by the ACCC, or even legal claims from the franchisee.
There are certain legal documents that will need to be put in place when franchising your business. Some of these include: 
Franchise Agreement: This is the document between the franchisor and franchisee that solidifies the relationship in writing. It allows the franchisee to carry on business in accordance with the processes and marketing strategy decided by the franchisor. Typical terms in these agreements include marketing fees, royalties, training given to franchisees, performance criteria, etc.  Disclosure Document: This is a document mandated by the Franchising Code of Conduct that gives prospective franchisees important information about the franchise system. It also gives existing franchisees information about conducting business. This document will typically have information like pending litigation against the franchisors/directors, contact details of the current franchisees (unless confidential), initial and upkeep costs to operate the franchise, and termination procedures (e.g. options to renew).Confidentiality and Restraint of Trade Annexure: This is so that franchisors can ensure franchisees do not use the franchisor’s IP, compete with the franchisor in the same market or protect the franchisor’s goodwill.Deed of Prior Representations: This document will lay out the representations the franchisee was made to believe before entering into the Franchise Agreement. This is particularly useful in places where there are third parties like agents involved, who make representations when recruiting franchisees. Franchisors can then choose not to enter into the Franchise Agreement if they believe some of the representations may not necessarily materialise—in order to avoid misleading the franchisee. 
Talk To A Lawyer 
Having a lawyer to prepare your Franchisor Package is extremely useful as they can walk you through all of the basic requirements under the Franchising Code of Conduct. They can also properly draft any documents to reduce the risk of any misunderstandings and complex disputes. 
Taking your business in a direction which is highly regulated can seem daunting, but we’re here to help! 
Feel free to get in touch with us at [email protected] or on 1800 730 617 for more information! We’re available any time for a free, no-obligation consultation.
The post Legal Documents You Need To Franchise Your Business appeared first on Sprintlaw.

So, you’ve decided to build a startup—some pretty exciting stuff! 
You’ve got a bunch of new ideas and expectations for how your new business will take off, but you might be skimming over one of the most important things to consider: your legals. 
We know how exciting it is to get right into it. But, as in any business, there are a number of risks and obligations you need to be aware of when you’re starting up. If you don’t have the right agreements or contracts in place, your startup could potentially suffer.
The first 6 months are crucial for ensuring your startup’s future success.  Here are some legal tips to keep in mind when you’re starting out, so that you’ll be building your business on a strong legal foundation. 
Choosing The Right Business Structure For Your Startup
The first thing to think about is your business structure. Your structure will need to accommodate your business’ goals and your long term plan. 
When choosing your business structure, it’s important to consider your:
BudgetPrioritiesAnticipated business sizeTax obligationsParties involved (e.g. do you have suppliers/manufacturers?)Liability and other general risks
Setting Up As A Sole Trader Or Partnership 
If you want to keep your startup small and simple, you might opt for a sole trader or partnership structure.
These types of structures may be your first preference because they’re cheaper and easier to run than a larger company. Tax obligations are not as complex and, technically, you’re your own boss! 
This all sounds quick and simple, but there are a few risks. 
A sole trader or partnership structure has unlimited liability, which means you will be personally responsible for any business debts. As a startup, you may have relied on loans to get started. If you can’t repay these loans, you may be personally liable. 
These risks can be pretty daunting, but you can limit your liability by having the right insurance and contracts in place (we’ll talk more about this shortly).  
If your startup is on the larger side, a proprietary limited (Pty Ltd) company structure might be better suited for you. 
Setting Up As A Pty Ltd Company 
Generally, the more risks there are, the more protection you’ll need against liability. This is where a company structure comes in handy. 
Under a company structure, your startup will be separate from you. If your business owes money, you won’t be personally liable—it will only come from the business. 
Put simply, your company can owe money and be liable for any debts, which means you’re (personally) safe from that liability! 
However, this stronger security is more expensive and can be more complex to manage from a legal perspective. So, it’s important to think carefully about which structure is best suited for your startup before you dive into your other legals. 
Registering Your Company
Once you’ve decided on your structure, you’ll need to register your company. 
If you’ve decided to adopt a sole trader or partnership structure, you’ll need to apply for an Australian Business Number (ABN), which you can do for free here.
Even though it might still be early in your startup journey, you’ll need to start sorting out the following things when registering your company:
SuperannuationInsuranceYour income taxSending invoicesContracts with customersTax File Number (TFN)
You’ll also need to register your business name. Keep in mind that this does not automatically give you exclusive use of that name; you’ll still need a trade mark so other people don’t use it (we’ll talk more about this shortly). 
If you’ve chosen to set up a company, there are a number of things you’ll need to do before you get started:
Appoint directors and shareholders (directors control the company and shareholders have ownership rights to it)Apply for an Australian Business Number (ABN)Take note of your ACN (once you register your company with ASIC, you’ll receive an Australian Company Number [ACN])
After you have registered your company, and given ASIC your details, it is your responsibility to ensure all the information is up to date. 
Whenever you change your company’s details, you’ll need to inform ASIC of these changes. For example, if you’ve changed your business address, you’ll need to notify ASIC so they can update their records accordingly. 
Raising Capital
If you’re a startup founder, there’s no doubt that you’ve thought about how to raise capital. At the end of the day, you need to be able to fund your startup’s activities.
If you want your startup to survive its first few months, you’ll need to choose the right method of raising capital. Luckily, there are a few to choose from:
Debt raise: You can borrow money from people or institutions and pay it back later. It’s generally good practice to have a Loan Agreement so you know what happens if no payment is made. Equity raise: You can also sell shares, and these investors get dividends and stock valuation in return. You can manage shareholder actions and disputes with a Shareholders Agreement or a Share Subscription Agreement. 
Monetary investments can also be converted into shares. This can be done through a convertible note or a SAFE note.
It’s also worth exploring raising capital from family and friends and looking into preference shares. 
Protecting Your Brand
Your brand is one of the most important parts of your startup’s success. In such a competitive environment, it’s important that you stand out. But what happens if other people use your brand’s name or logo? 
Startups need to be aware of how they can protect their Intellectual Property (IP). Here are a few ways you can protect your brand. 
A Non-Disclosure Agreement (NDA) is a contract that protects your business’ sensitive information when you’re discussing it with other parties, usually during commercial discussions and negotiation. It’s a good way to protect your brand while you’re still in the planning stage. Trade Marks: Once you’ve finalised your brand ideas, you’ll need stronger ways to protect it. The best way to do this is to register a trade mark with IP Australia so you have exclusive use of your brand name, logo, slogan or even a scent! Copyright laws also have your back: They ensure that your original work isn’t stolen or used without permission. You don’t have to register copyright like you would with a trade mark. It’s also good practice to have Copyright Disclaimers where necessary (they let people know that it’s your IP and they can’t use it!). Pitch Deck Disclaimers let people know that the logos, slogans or any other form of IP in your pitch belongs to you. Put simply, it’s like a copyright disclaimer for your pitch. 
Protecting your IP during your early business stages is critical to your survival. Sprintlaw has a team of experienced IP lawyers who can help you protect your brand. 
Managing Your Relationships Well From The Start
Startups can’t thrive without the people that build them.
If you want to survive the first few months as a startup, you’ll need to make sure you’re managing your team well. Here are some starting points.
Managing Your Relationships With Co-Founders & Investors
If you want to attract potential investors, you need to show them that you and your co-founders are organised. This is where a Founders Term Sheet comes in handy. 
The term sheet sets out how decisions will be made and essentially plans out the business’ future, so investors can be confident that you’re prepared for whatever happens. Generally, it’s not legally binding, so you’ll have more flexibility for when you later draft your Shareholders Agreement.
Managing Your Team
Employers have obligations to their employees (such as ensuring they receive minimum wage), but it’s always a good idea to have this in writing. Employment Contracts should address salary, leave, IP ownership, the nature of work to be done, Workplace Health and Safety and National Employment Standards. Some companies reward their employees and incentivise their performance by issuing them shares. This can be done through an Employee Stock Ownership Plan or Employee Share Scheme. It might be an option worth exploring in your startup, as it can help to create a culture of loyalty. 
If you’re hiring contractors (rather than employees), you’ll need a Contractor Agreement. Your obligations to contractors are different from those you owe to your employees, so this agreement will make this clear from the outset. 
It’s important that you understand your obligations to your interns, too. If they are doing similar work to employees, they need to be paid accordingly.  There are some exceptions (e.g. if you’re on vocational placement), so having an Internship Agreement will help both parties understand the details around payment, entitlements and the nature of the internship in general. 
Managing Your Shareholders
If your company has more than one shareholder, a Shareholders Agreement should be in place. This legally binding document sets out dispute resolution and decision-making processes, and addresses what will happen if a shareholder leaves the company. You can read more about what’s included in a Shareholders Agreement here. 
Managing Your Supplier Relationships
If you work closely with suppliers, you’ll also need a Supply Agreement. Like an employment contract, it will set out the roles and responsibilities of each party. However, it can also limit liability if something goes wrong with stock, payment and dispute resolution. 
Protecting Yourself With The Right Insurance
We’ve spoken about the big risks, but what about some of the more basic, general risks—like breaking equipment or stolen property? This is when you should start thinking about insurance. 
Workers Compensation is compulsory for Australian businesses, so your employees are covered for injuries or losses incurred at work. However, you should also think about public liability insurance. Most insurers offer business insurance as a package, so while you focus on your startup success, you’re also covered for any unexpected incidents. 
Establishing Strong Terms & Conditions
No matter what kind of startup you are, it’s always a good idea to have Website Terms and Conditions in place. This will limit your liability for anything that goes wrong when someone is using your website. Similarly, you can have T&Cs for any service you provide to customers. This will essentially disclaim who is responsible for what, and sets out a potential resolution for any issues. 
These sorts of contracts will ensure that your startup manages its risks well, so there’s plenty of room for success. 
Need Help?
Navigating your first 6 months as a startup can be daunting, especially with all the risks and responsibilities involved. To ensure your startup remains resilient during unstable times, you can contact our team of lawyers for help. 
If you need help with more than one area of your startup’s legal set up, consider becoming a member for unlimited phone consultations with our lawyers and discounts on our fixed-fee packages.
To talk through the best options for you, get in touch for a free consultation on 1800 730 617 or at [email protected]. 
The post Surviving The First 6 Months As A Startup appeared first on Sprintlaw.

What Is An Indigenous Corporation?
Before we get down into the technicalities of how to register an Indigenous corporation, it’s very helpful to know what it actually is. 
An Indigenous corporation is an incorporated legal structure that is only available for Aboriginal and Torres Strait Islander organisations. In other words, non-Indigenous organisations may not incorporate as an Indigenous corporation.
Indigenous corporations are registered with the Office of the Registrar of Indigenous Corporations (ORIC) under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act). 
Why Register As An Indigenous corporation?
An Indigenous corporation structure is not the only legal structure available to Indigenous businesses, so it is essential that you still research and consider other structures to make sure you adopt the most suitable option for your business. 
Some advantages of incorporating as an Indigenous corporation include:
Registering as an Indigenous corporation allows members to choose not to be liable for any debts the corporation incursAboriginal and Torres Strait Islander customs and traditions may be observed according to the company’s rule bookUnlike other business structures, registering as an Indigenous corporation is freeIndigenous corporations can apply to be exempt from producing annual reports
Indigenous corporations can operate nationally and are not limited to the state or territory in which they are registeredIndigenous corporations deal with a specialist regulator, the Office of the Registrar of Indigenous Corporations (ORIC), instead of ASIC
ORIC plays a broader role than regulation and enforcement. They also provide other services and specialist support, such as:
Workshops and training on good governanceAssistance with drafting and developing your corporation’s rule bookHelp finding independent directors and recruiting senior staffFree job advertising
ORIC also provides free legal advice on various issues through LawHelp. 
How to Register An Indigenous Corporation
So you’ve decided that becoming an Indigenous corporation is the way to go. What’s next? 
This section will take you through the main steps involved in registering your business under the CATSI Act. These steps are:
Identifying your members Creating your rule bookSatisfying the pre-incorporation requirementChecking for potential exemptionsLodging your application
Step 1. Identifying Your Members
When you register as an Indigenous corporation, you will need to provide ORIC with a register of members. 
Members own the corporation and play a fundamental role in deciding how the corporation operates. They are responsible for making important decisions surrounding how the corporation is run, who the directors of the corporation are, how money is spent, and how the services it provides are managed.
The CATSI Act establishes three requirements around membership:
Age: Each member of the corporation must be at least 15 years oldMinimum number of members: In most cases, Indigenous corporations should have a minimum of 5 members. It is possible to apply for an exemption from this requirement, such as if you are a sole trader.Indigeneity:For corporations with more than 5 members, at least 51% of members must be Aboriginal or Torres Strait IslanderFor corporations with between 2-4 members, all members – or all but one member – must be Aboriginal or Torres Strait IslanderWhere there is only one member, that member must be Aboriginal or Torres Strait Islander
On top of these requirements, you will need to decide the eligibility rules for your own corporation and publish them in your rule book. It is important to note that you will need to obtain and maintain a copy of each person’s consent in writing to being a member of your corporation.
Step 2. Creating Your Rule Book
Indigenous corporations must have a rule book consented to by its members, which outlines how the corporation is conducted. When drafted well, your company’s rule book can be an important tool that ensures good governance.
A corporation rule book is generally made up of three main parts:
Constitution: This section deals with matters specific to your corporation. This includes things such as the name, objectives, and membership eligibility for your corporationSet laws: These are rules outlined in the CATSI Act that apply to all Indigenous corporations and cannot be changed, unless an exemption has been granted by ORICReplaceable rules: Your corporation can choose to accept the ‘replaceable rules’ as they appear in the CATSI Act, or modify them to better suit the needs of your corporation
Step 3. Satisfying The Pre-Incorporation Requirement
To show that you have fulfilled the pre-incorporation requirement, you will need to show that at least 75% of members have:
Consented to the application to register as Indigenous corporationApproved the proposed rule book, including the application of any replaceable rules that are not addressed in the rule bookNominated the corporation’s secretary and director(s)
To prove that the pre-incorporation requirement has been met, it is important to provide the minutes from a pre-incorporation meeting or a signed document as evidence.
Step 4. Checking For Potential Exemptions
When drafting your rule book, you may have identified areas in which your corporation might find it hard to meet the requirements of the CATSI Act.
In certain situations, such as where you would like to have less than five members, you can apply to ORIC for an exemption. These will only be granted in circumstances where the Registrar is satisfied that the rule is inappropriate or unreasonable for your corporation.
Applications can be made by attaching a completed request form to your application.
Step 5. Lodging Your Application
You’ve prepared all the necessary documentation—congratulations! All you need to do now is press the ‘go’ button and lodge your application. 
The easiest way to do this is to apply online here. 
However, if you are unable to apply online, you can complete this form and send it to ORIC. There are different forms for existing organisations that wish to transfer their registration to become an Indigenous corporation, or amalgamating corporations, so it is important that you fill out the appropriate form. You can find all the forms for registering under the CATSI Act here.
What Support & Grants Are Available To Indigenous Corporations?
Starting a business is no mean feat, however additional support and assistance is available for Indigenous business owners.
Indigenous Business Australia (IBA) is a government organisation that provides workshops, advice and support, and even business finance to eligible Indigenous business owners. We’ve summarised some of the main financial grants that may be available to Indigenous corporations below.
Start-Up Finance Package
Who is it for? Small to medium-sized start-ups and businesses that have an annual turnover of less than $400,000 and have been trading for less than one year.
What is it? The Start-Up Finance Package comprises a grant component and a loan component.
What is covered by the grant component? Up to 30% of a new business loan to purchase assets for the business. The grant amount does not need to be repaid.
What is the maximum loan amount and loan term? $100,000, with a maximum loan term of seven years. Loan repayments are designed to suit the individual business, with low-interest rates and flexible terms available.
Procurement Loan
Who is it for? Businesses that have been given a contract through the Indigenous Procurement Policy (IPP) or other government programs.
What is it? The Procurement Loan aims to assist eligible businesses with upfront contract costs.
What is the maximum loan amount and loan term? $100,000, with a maximum loan term of two years. Loan repayments align with the contract to support customers in fulfilling their contractual obligations before receiving payment from the government.
Producer Offset Loan
Who is it for? Indigenous-owned production companies, Indigenous producers and directors. To be eligible for the Producer Offset Loan, you must qualify for a Producer Offset Rebate.
What is it? The Producer Offset Loan provides financial assistance for eligible Australian documentary, film or television projects. It aims to complement investment from Screen Australia and other state government film-funding agencies or broadcasters.
What is the maximum loan amount and loan term? $2,000,000, with a maximum loan term of two years.
Business Loan Package
Who is it for? Aboriginal and Torres Strait Islander peoples looking to start, grow or restructure their small business in Australia.
What is it? The Business Loan Package is provides assistance with working capital requirements, purchase of existing businesses, equipment, and other commercial assets.
What is the maximum loan amount and loan term? $5,000,000, with a maximum loan term of 20 years.
IBA also provides other forms of financial support, such as operational leases, invoice financing and performance bonds. You can read more about these options on the IBA website here.
Need Help?
If you’d like additional support starting or growing your Indigenous corporation, or exploring what business structure is best for you, we’re here to help! Get in contact with our team at [email protected] or give us a call on 1800 730 617 for a free, no-obligations consultation.
The post Registering As An Indigenous Corporation: What You Need To Know appeared first on Sprintlaw.

As a small business owner, you may be struggling to deal with late payments or clients who aren’t even paying their invoices at all. 
There can be many reasons why customers don’t pay their invoices on time. But at the end of the day, an unpaid invoice is not good for business and can be incredibly frustrating to chase down. 
So, how can you ask your customers for payment without being rude or jeopardising future business opportunities? Is there any way you can avoid these situations to begin with—ensuring your clients always pay their invoices in a timely manner? 
This guide will answer these questions and provide useful tips that will help you get paid on time.
Be Proactive
Even if you have a great relationship with your clients, it’s good practice to have something in writing that outlines the terms of this relationship. Common names for this type of document are Rules of Engagement, Service Agreements or Business Terms and Conditions. It doesn’t matter what you call the document—the important thing is having a legally binding contract that sets out the key parts of the agreement between you and your client, including payment terms.
Payment terms define when and how you expect to be paid. They may include details such as:
The due date for payment and the consequences of late paymentAccepted methods of payment (e.g. credit card, PayPal, and direct debit). It’s also important to outline whether there are forms of payment you don’t acceptWhether the client will need to pay a depositWhat currency you are dealing in, particularly if your business operates overseas
Having this agreement not only sets expectations to minimise confusion down the track, but will also help strengthen your relationship with your customers.
Payment Options To Explore With Your Clients
One way to ensure you’re paid for your products or services is to ask for full payment upfront. However, while some clients may be willing to pay in advance, others may not. For instance, a new client who isn’t familiar with the quality of your product or service may be less inclined to pay in advance. 
In these cases, you may consider asking for a deposit. This is a common practice for more expensive products and services. It makes sure you get paid something, even if your client defaults on the rest of the bill. And, as an added bonus, it’s a great way to build trust and strengthen your business’ relationship with the client. 
Another option you may wish to consider is negotiating a payment plan with your client. This is particularly helpful if your client is having cash flow issues. Setting up a payment plan can ensure you get paid, as it will take into account what your client can afford and over what period of time payments are to be made.
Let’s run through these various payment options in an example:
Sally runs a boutique creative agency and has been engaged by a client to design a website. 
Prior to starting work on a project, Sally requires her clients to pay the full amount. However, if the client is new or is otherwise reluctant to pay the full amount, Sally may charge a percentage of the bill before she starts to work on the project, with the remainder due once the website design is complete.
Lately, some of Sally’s clients have been experiencing some cash flow issues. Sally doesn’t want to lose these clients and is willing to negotiate a plan for them to pay in instalments. The clients then pay a negotiated amount over a specified period of time until full payment is made.
The Importance Of Invoicing Your Clients Promptly
As a small business owner, you’ll likely be wearing many different hats and juggling a handful of tasks at the same time. It can be easy to forget to send your client an invoice, or to lose track of whether or not they have paid. 
It is best to get into the habit of sending invoices as soon as a job is complete—while your product or service is still fresh in the client’s mind. Not doing so might give your client the impression that, since you took your time to invoice them, they can take their time in actually paying you. 
Keep Communication Flowing
Friendly Reminders
You don’t need to wait until an invoice is late before sending your client a reminder to pay. 
Send a friendly email or letter—accompanied with the original invoice—to the client as the due date approaches. You can follow up again if the accounts go past due. The more personal you make the email, the better. 
If you don’t hear back from a client, try giving them a call. Make sure you have as much information as possible handy, including the invoice number, date, and outstanding amount.
Keeping in touch with your client and sending them reminders may be all it takes for them to pay the invoice. They may simply have forgotten about the bill or paid the money into the wrong bank account. 
A friendly reminder email could look something like this:Subject: Invoice Number [reference number] – Payment ReminderDear [Name],I just wanted to remind you that [amount owing] in respect of Invoice Number [reference number] is due for payment on [due date]. The original invoice is attached below for your reference.Could you please let me know when I can expect to receive payment?Thanks in advance for your understanding and cooperation.Best regards,[Your name]
Overdue Payment Reminders
If your client has missed the due date for payment or hasn’t responded to you at all, you may want to send them an overdue payment reminder. Again, this might be done over the phone or by sending your client an email or letter. 
You may wish to accompany emails and letters with the original invoice with an ‘overdue’ stamp on it.
An overdue payment reminder could look something like this:Subject: Invoice Number [reference number] – OVERDUEDear [Name],I have yet to receive the payment of [amount owing] in respect of Invoice Number [reference number], which was due for payment on [due date]. The original invoice is attached below for your reference.Could you please let me know when I can expect to receive payment?Best regards,[Your name]
Final Reminder
If your client still hasn’t paid after friendly reminders and overdue payment reminders, you may wish to send them a final reminder to request payment. 
A final reminder email could look something like this:Subject: FINAL NOTICE – Invoice Number [reference number] Dear [Name],I have yet to receive the payment of [amount owing] in respect of Invoice Number [reference number], which was due for payment on [due date].The invoice is now [number of days overdue] days overdue. We require immediate payment of this amount to avoid further action. Please contact me immediately to advise when I can expect to receive payment.Thanks in advance for your understanding and cooperation.Best regards,[Your name]
Options of Last Resort
If your client doesn’t pay at all, there are a few actions you can take. Let’s run through them.  
Sending A Letter Of Demand
Sending a letter of demand should only be considered as a last resort, as it has the potential to irreparably damage your business’ relationship with a client. However, if all previous attempts to contact them and receive payment have failed, it may be necessary to pursue this avenue to make sure your business is paid for the products or services delivered.
A letter of demand not only lets the other party know that you’re serious about getting paid, but also gives them an opportunity to pay you before the matter escalates to court.
A letter of demand will typically address:
the amount owingwhat the amount is forthe due date for the paymentwhat action you will take if the client does not pay on time (for example, taking them to court)
It is important that you keep a copy of the letter and send it by registered post. This may be used as evidence if you need to make a claim in court.
Using A Debt Collection Agency
If you still haven’t been paid after friendly reminders, informal negotiations, and sending a letter of demand, you may wish to use a debt collection service. 
It may be worth letting your client know that you plan to use a debt collector, as it could encourage them to pay the overdue invoice. Going down this path may damage your relationship with a client further, so you will need to assess whether it is worth it to recover the money you are owed.
At this stage, it is important to consult a professional for advice. The Australian Competition and Consumer Commission (ACCC) has prepared guidelines for debt collection, which can be found here.
Taking Legal Action
If all else fails, you may be looking to take legal action against your client. Legal proceedings can be expensive and take a long time, so it’s important that you weigh up these considerations against the likelihood of recovering the debt, as well as the debt amount itself. 
Need Help?
It’s important that you’re paid for the goods and services you provide. Whether you’re drafting your payment terms, chasing unpaid invoices, or anything in between, we’re here to help! Our friendly team can be reached at [email protected] or on 1800 730 617 for a free, no-obligations chat.
The post Getting Your Clients To Pay On Time appeared first on Sprintlaw.

It’s become increasingly common for businesses to trade in personal information. Maybe it’s even something that you’re looking to incorporate into your own business model. Or perhaps you’re concerned that your business is inadvertently trading in personal information, and you want to be informed about the consequences of doing so. 
When you’re working out whether your business is allowed to trade in personal information, it is important to understand your obligations under privacy law. This is a tricky legal area to navigate, and getting things wrong could see you facing hefty penalties! 
What’s The Difference Between Personal Information And Sensitive Information?
Before you can determine whether your business will trade or is trading in personal information, it’s first important to understand what ‘personal information’ actually is, and how it differs from ‘sensitive information’. 
Personal Information
According to the Privacy Act, personal information is ‘information or an opinion about an identified individual, or an individual who is reasonably identifiable’. 
Simply put, personal information is any information that could identify an individual, and can include things such as:
Name or date of birthContact details (e.g. a residential or business address, or a phone number)PhotographInternet protocol (IP) addressLocation information from a mobile deviceCredit informationVoice print or facial recognition biometricSensitive informationTax file number informationEmployee record information
Ultimately, whether information will be considered to be ‘personal information’ depends on whether the individual can be identified or is reasonably identifiable in the particular circumstances.
Sensitive Information
Sensitive information is a category of personal information. 
It includes information or an opinion surrounding issues such as an individual’s:
Racial or ethnic originSexual orientation or practicesReligious or philosophical beliefs and affiliationsPolitical opinions or associationsTrade association or union membershipCriminal recordHealth or genetic informationBiometric information or templates
Sensitive information generally carries a higher level of privacy protection compared to other types of personal information, as mishandling this type of information has the potential to have a bigger detrimental impact on the relevant individual.
Did You Know?
Personal information does not have to be true and can also include information that’s already publicly available. It’s important to remember the definition of personal information is really broad, and not just captured by the Privacy Act.
Does Your Business Trade In Personal Information?
Now that you understand what constitutes ‘personal information’, the next step is to work out what it means to ‘trade in personal information’.
Trading in personal information involves buying or selling personal information without the consent of the relevant individuals. For example, if a business buys or sells a mailing list without the consent of the individuals contained on that list, the business will be trading in personal information. 
Whether your business is said to be trading in personal information generally comes down to the question of consent. 
If you collect and/or disclose personal information to someone else for some sort of commercial gain without the consent of the individual(s) to whom the information belongs, you will likely be considered to be trading in personal information. Conversely, if you have the consent of the individual concerned, you will not be trading in personal information. This applies even if you give or receive payment for the personal information.
Another circumstance in which you will not be considered to be trading in personal information is if you are sharing the information because you are authorised or required to do so by law.
The Privacy Act & The Australian Privacy Principles
If your business trades in personal information, you will need to comply with the Privacy Act and the Australian Privacy Principles (APPs). 
The APPs are a set of 13 principles you must follow in order to comply with the regulatory framework established by the Privacy Act. You need to understand your obligations under the APPs to avoid interfering with the privacy of an individual, and to also avoid regulatory action and penalties.
The APPs govern the standards, rights, and obligations surrounding:
How personal information can be collected, used, and disclosedYour business’ obligations with regards to governance and accountabilityWhat rights individuals have when it comes to accessing their personal informationThe integrity and correction of personal information that has been collected
Your Business’ Obligations Under The APPs
We’ve put together a quick summary of your business’ obligations under the APPs. Abiding by these principles will ensure you don’t get into legal trouble when trading in personal information. 
APP 1. Open and transparent management of personal information
Your business must take reasonable steps to implement practices and procedures that ensure compliance with the APPs (and other binding registered APP codes), as well as to ensure that your business is equipped to deal with related inquiries and complaints.Your business will need to have an up-to-date APP Privacy Policy that deals with how it manages personal information. Reasonable steps must be taken to make the APP Privacy Policy freely available and accessible.
APP 2. Anonymity and pseudonymity
Individuals must have the option of dealing anonymously or under a pseudonym.
There are two exceptions that arise in certain circumstances:
Where your business is required or authorised by law, or a court or tribunal order, to deal with identified individuals; orWhere it is impracticable to deal with individuals who have not identified themselves.
APP 3. Collection of solicited personal information
When you can collect personal information differs according to whether your business is an agency or an organisation, and whether the information contains sensitive information.
If your business is an agency, you may only solicit and collect personal information that is reasonably necessary for, or directly related to, for your business’ functions or activitiesIf your business is an organisation, personal information can only be collected or solicited if it is reasonably necessary for your business’ functions or activitiesGenerally, if the information is sensitive information, the individual concerned must consent to the collection of that information
In terms of how personal information can be collected, the same requirements apply to all types of businesses and all types of personal information. The requirements do not differ for sensitive information. Personal information must be solicited and collected by fair and lawful means, and, in the majority of cases, from the individual concerned.
APP 4. Dealing with unsolicited information
There may be some situations in which your business receives personal information by accident, or where you have not asked for such information. 
If you find yourself in this situation, you should ask yourself whether that information could have been collected under APP 3. Generally speaking, if you would not have collected the information under APP 3, you will need to de-identify and destroy the information as soon as practicable.
APP 5. Notification of the collection of personal information
Your business must ensure that individuals from whom you have collected personal information are aware of certain matters. These include:
Your business’ identity and contact detailsThe facts, circumstances, and purposes of collectionWhether the collection of personal information is required or authorised by lawWhat happens if personal information is not collectedInformation about your APP Privacy PolicyYour business’ usual disclosures of personal informationWhether you are likely to disclose personal information to overseas recipients and, if practicable, where these recipients are located
APP 6. Use or disclosure of personal information
Unless an exception applies, your business can only use and disclose personal information for the purpose for which it was collected
APP 7. Direct marketing
Unless an exception applies, your business must not use or disclose personal information for the purpose of direct marketing. 
Individuals also have the right to request your business not to use or disclose their personal information in relation to direct marketing.
APP 8. Cross-border disclosure of personal information
Before your business shares personal information to an overseas recipient, you will need to take reasonable steps to ensure that that recipient will comply with the APPs.
This is a necessary and important measure for your business to take, as you will be held accountable for the acts and practices undertaken by the overseas recipient in relation to the information you have disclosed.
APP 9. Adoption, use or disclosure of government related identifiers
Generally, organisations and some specific agencies must not adopt, use or disclose government related identifiers.
APP 10. Quality of personal information
Your business has an obligation to take reasonable steps to make sure that any personal information it has collected is accurate, current, and complete.
APP 11. Security of personal information
Your business will need to take reasonable steps to protect personal information it has collected from being misused, interfered with, or lost. Reasonable steps must also be taken to protect this information from unauthorised access, modification, or disclosure.
Generally, when your business no longer needs the personal information for the purposes in which it was collected, reasonable steps must be taken to ensure that the information is de-identified or destroyed, unless an exception applies.
APP 12. Access to personal information
In most cases, individuals from whom your business has collected personal information have a right to access the information about them.
APP 13. Correction of personal information
Your business must take reasonable steps to correct personal information. In particular, your business should make sure any collected information is accurate, current, complete, relevant, and not misleading.
The Office of the Australian Information Commissioner has a more in-depth explanation of the APPs here.
What Is The GDPR And Why Do You Need To Know About It? 
The European Union (EU) introduced the General Data Protection Regulation (GDPR) in May 2018. 
You might be wondering why we’re mentioning regulations from halfway around the world. As it turns out, the GDPR applies not only to businesses established in the EU, but also any business that supplies goods or services to, or uses the personal data of, individuals residing in the EU. 
If your website is available worldwide and uses cookies to track the behaviour of users through their personal data, it’s important to ensure you’re complying with the GDPR.
The good news is that, if your business already complies with the APPs, you’re likely to tick the majority of boxes in relation to the GDPR. You’re probably only going to need to make a few minor changes to your business’ operations to ensure that you’re abiding by the GDPR. These changes include having a GDPR compliant privacy policy on your website, and understanding how to run your business while being GDPR compliant. 
‘Personal Information’ vs ‘Personal Data’
You may have noticed that when it comes to the GDPR, we’re talking about personal data as opposed to personal information. 
That’s because, where the APPs refer to ‘personal information’, the GDPR refers to ‘personal data’. It is important to be aware of the differences, though slight, between the two terms. 
As we noted above, personal information relates to information or opinions that could identify an individual. 
In contrast, personal data is any piece of information that relates to an identifiable person. This can include a broad range of identifiers, including a name, an identification number or online identifier, location data, or factors specific to the physical, physiological, genetic, mental, economic, cultural, or social identity of an individual. 
The GDPR provides a useful guide to what can be considered personal data here.
Consent & The GDPR
Under the GDPR, your business will need to show that an individual has consented to their personal data being collected.
 An easy way for you to ensure you comply with this requirement online is by getting your customers to click or tick a box stating that they consent to the collection of their personal data in accordance with your business’ privacy policy.
Consumer Rights & The GDPR
The GDPR also provides a more comprehensive list of consumer rights than the APPs. 
These include:
The right to the erasure of personal data: Your customer can ask you to erase their personal data in certain situations, such as if you no longer require the data for the purpose of initial collection, if they withdraw consent to the processing of their data, or if the data was wrongfully collected.The right to data portability: Your customer has the right to ask for you to hold their personal data in a structured, commonly used and machine-readable format.The right to object to the processing of personal data: Your customer can, at any time, object to the processing of their personal data. 
It’s Best To Get Consent
If you’re still unsure about what you can and can’t do, it’s a good first step to be transparent and honest with the people from whom you collect personal information. Not only does this help your business avoid breaching any privacy laws and regulations, but it can also help you build trust with your customers.
If you have a website, make sure your privacy policy is not only easy to find, but also easy to read. 
Your privacy policy should include details relating to what information you may collect, the reasons for collecting the information, and how that information may be used. It’s also a good idea to ask your customers to accept that they have read your privacy policy and agreed to its terms. 
We wouldn’t recommend you draft your privacy policy yourself. A lawyer can help draft a privacy policy specific to your business.
Need Help?
Understanding what you can and can’t do with your customer’s personal information can be quite complex. 
If you need help drafting a privacy policy – or if you’re not sure where your business stands when it comes to trading in personal information –  Sprintlaw has a team of friendly and experienced lawyers who are happy to help! Don’t hesitate to get in touch at [email protected] or call us on 1800 730 617 for a free, no-obligations chat.
The post Selling Personal Information: What’s Allowed? appeared first on Sprintlaw.

When you sell your business, one of the biggest questions is what will happen to your employees. This depends on a number of things, such as whether the purchaser is a ‘non-associated entity’ and the nature of your staff’s employment. 
You’ll need to officially let your employees go when you sell your business. From there, they can choose to either accept or reject the offer of new employment with the buyers of your business. Either way, you’ll need to formally terminate their employment with you. 
Terminating Employment
During a transfer of business, there are a few things to go over before you officially terminate your staff’s employment with you. Some of these steps will require you to speak with the new employer, so it’s important to understand what’s required of you. 
Step 1: Written Notice 
Before you let them go, you need to give your employee written notice of their termination of employment. The minimum notice period usually depends on how long they’ve been employed by you: you can read more about this here. 
Generally, the notice should include:
The reason you’re terminating their employment (so, in this situation, you’d talk about the business being sold to a new employer)The date their employment endsThe notice periodWhether the employee will be paid in lieu of notice
Step 2: Employment Termination Payment 
You might need to pay your employees some form of compensation for losing their job, or their redundancy payment.
A lump-sum paid to an employee because of termination of employment is known as an Employment Termination Payment (ETP), and may include payments for: 
Unused sick leave or unused rostered days offPayments in lieu of noticeGratuity Loss of job compensationRedundancy Early retirement schemes (that exceed the tax-free limit)Market value of transfer of property
An ETP doesn’t include:
Unused annual or long service leaveSuperannuation benefitsTax-free part of a genuine redundancy payment Foreign termination payments
Terminating an employee isn’t always easy, so we’ve got a team of lawyers ready to chat if you ever need help. 
Will Your Employees Be Working For The Buyer Of Your Business? 
So, what happens if your employees do accept the offer of new employment and decide to work for the buyer of your business? You’ll need to have the below points sorted.  
Documents To Give To The New Employer
Before your employee starts working for their new employer, you need to provide all the relevant documentation to the buyer of your business. 
Up to date employee records: You’ll need to give the new employer your employees’ records, such as their name, nature of their employment (e.g. part time), their commencement date and their ABN (if any). Notice of termination: As we mentioned before, you still need to terminate employees’ employment with you. This means you’ll need to provide notice in writing of this termination, as well as any necessary payments.
The payments you’ll need to make depends on the new employer, as they can choose to recognise or not recognise the employee’s service with you for some entitlements. 
Pay Entitlements When Transferring Employment 
Generally, the employee’s service with the old employer counts as service with the new employer for the purpose of pay entitlements, unless the new employer decides not to recognise it.  
If this is the case, the old employer is obligated to pay the employees certain accrued entitlements, such as redundancy or annual leave. We’ll talk more about this shortly. 
It’s important to note that, if you already gave your employee their entitlements, this service isn’t counted again with the new employer. 
If you’re a new employer and you’re not too sure about how these entitlements will transfer, don’t stress too much—we’ll cover your obligations shortly. 
Transferable Instruments
In some situations, employees can claim certain rights to be carried over from their old to new employer. This is known as a transferable instrument. 
A transferable instrument is basically a group of rights and can be in the form of:
An agreementA workplace determinationA named employer award
You can also transfer flexibility arrangements and guarantee of annual earnings.
Put simply, a transferable instrument will cover a transferring employee until their old employment is terminated or until a new instrument can cover your employee. It ensures that the process of carrying over their entitlements is simple. 
What Does The New Employer Need To Do?
If you’re the new employer, your obligations will look a little different. You also have a variety of choices, so you can control what these responsibilities will look like. 
If you’re the new employer and you are not an associated entity, you have a few options. You can choose to not offer the existing employees employment at all, which means they’ll be terminated through redundancy with their old employer rather than transferring. 
If you do offer employment, you can choose to either:
Recognise service with the old employerNot recognise service with the old employer regarding some forms of entitlements
Recognition Of Service
If you decide not to recognise employees’ service with the old employer, then the old employer is obligated to pay employees their accrued entitlements, such as annual leave and redundancy. Usually, this will be paid when their old employment is terminated. 
However, even if you choose this option, you still need to recognise the following:
Sick and carer’s leaveParental leaveRight to request flexible working arrangements
Alternatively, you could choose to recognise employees’ service with their old employer. This means that their accrued entitlements will carry over to you, and you’ll be responsible for these payments instead of the old employer.
In addition to the payments you’re already recognising (personal leave, termination notice pay), you’d also be responsible for:
Annual leaveRedundancyLong service leaveUnfair dismissalNotice of termination
Put simply, if the new employer recognises these entitlements, they will be carried over during the transfer—so the old employer won’t need to worry about paying the employees when they terminate their employment. 
Entitlements are usually recognised where the T&Cs of the new employer are similar to those of the old employer. However, if you’re a non-associated entity, then it might be safer to not recognise these entitlements. 
Either way, the new employer will need to provide their new employees with the Fair Work Information Statement. It essentially sets out the employees’ rights and the National Employment Standards. It needs to be given to staff before they start work, or as soon as possible after they begin. 
Next Steps
Managing your employees during a transfer of business comes with many obligations, but it doesn’t have to be difficult or stressful. Feel free to contact our friendly team of lawyers who are ready to help you with your next steps. We can be reached for a free consultation on 1800 730 617 or at [email protected].
The post What Happens To My Employees When I Sell My Business? appeared first on Sprintlaw.

In the midst of a global pandemic, Trump has raised concerns for national security in relation to TikTok and WeChat. On Thursday 6th August, he released an executive order that would possibly ban Tiktok if it did not sell its assets to a US company (such as Microsoft) by 15 September. 
So, what would the proposed ban actually mean? What’s going to happen to all the TikTok influencers? Could the same thing happen in Australia? 
Here’s what you need to understand about this legal situation. 
Why Is Trump Banning TikTok?
The order to ban TikTok was made on the basis that US data could be collected and handed over to the Chinese government for blackmailing purposes. The announcement was not popular for many reasons, one of them being that other US apps raise just as many security concerns. 
In fact, you might be thinking: ‘How is this any different to apps like Facebook?’ 
Technically, it’s not. Generally speaking, a lot of modern apps collect our data, which is why we’ve become more cautious about what information we share. But it seems that Trump’s motives are more deeply rooted, and it may cost people their jobs. 
What Will Happen To TikTok Users?
Banning TikTok will have some serious consequences for employees and app users alike. We’re looking at more than 1,000 US-based TikTok employees being stood down and losing their paychecks in the midst of a global pandemic. Landlords that provide for TikTok operations will also need to evict them as soon as the order comes into effect. With all this in mind, it’s clear that the TikTok ban will cause some pretty heavy losses. 
The wording of the executive order is broad, banning ‘any transaction by any person’ with the parent company of TikTok. It is yet to be seen if a ‘transaction’ means a company purchasing ads on the app, or a user downloading the app or publishing content on the app. Either way, the ban is likely to decrease TikTok’s popularity by making it more difficult for users in America to access it. 
The Future Of TikTok Influencers
TikTok influencers would lose a valuable platform – and potentially paychecks – under the proposed ban. 
So, what will happen to all the sponsorships and deals that these influencers have with certain brands? What if influencers have already agreed to post, say, 12 sponsored posts for a particular brand on their TikTok account over the next 12 months?
If TikTok were to be banned, the future of the relationships between influencers and brands would almost entirely be governed by the contract between them. This type of contract – known as an Influencer Agreement – normally sets out things like:
Payment (whether the influencer will be paid per post or paid a fixed fee per month, etc.)Products Nature and duration of employmentTermination
If the influencer was already paid to do posts but TikTok was taken down shortly afterwards, the influencer might need to send the money back (but again, this depends on the contract). 
Alternatively, influencers could move to another social media platform and continue to promote products there (meaning they wouldn’t necessarily need to send the money back). 
We saw a similar thing happen a few years ago when Vine was discontinued—a lot of Vine influencers continued their work on YouTube, Instagram and, eventually, TikTok. This can be difficult, though, since influencers would need to maintain their following and brand on a completely different platform. 
If the Influencer Agreement does not explicitly require the influencer to promote the items on TikTok, then the influencer can move to a different platform and still be entitled to payment. 
Some contracts might not be as great, and the influencer could be terminated with no compensation. To avoid situations like these, it’s important to think ahead and consider Contract Amendment, which basically allows you to change the terms of your contract. This way, you can ensure that you still receive some form of compensation if TikTok is banned, or that your partnership with a brand continues on another platform. 
TikTok’s Response
TikTok was quick to respond to the news and had a number of arguments laid out in their recent statement. They argued that there had been ‘no due process or adherence to the law’. They added that this ban will not only eliminate an important online culture, but it interferes with the concept of ‘free expression and open markets.’ You can read TikTok’s official statement about the order here.
This recent news sparked a lot of controversy about the app itself and whether it actually is a threat, but it also invites some more general legal questions. For example, can the US government actually force the sale of TikTok?
Can A Government Force The Sale Of An Overseas Business?
In this situation, yes. Once the President declares a ‘national emergency’, a lot of the limits on his power can be altered if he thinks it’s necessary. Since the executive order declared the TikTok ban a ‘national emergency’, Trump does have the authority to force the sale of TikTok on the grounds of protecting national security. 
In particular, the International Emergency Economic Powers Act (IEEPA) allows Trump to “regulate a variety of economic transactions following a declaration of national emergency”. 
However, TikTok has made a number of arguments against this order which could possibly change the app’s future. They argued that:
Trump’s actions were “unconstitutional” because TikTok was not given an opportunity to respond to the allegationsThey did not go through “standard legal processes” There was no evidence of such data being collected and given to the Chinese governmentIn relation to TikTok employee rights, the order “violated the fifth and 14th amendments to the US Constitution, which state that no one shall be deprived of life, liberty or property without due process of law” commented Mike Godwin, a lawyer working with TikTok on the matter. 
In their recent statement, TikTok commented “We will pursue all remedies available to us in order to ensure that the rule of law is not discarded and that our company and our users are treated fairly – if not by the Administration, then by the US courts.”
What Is Happening In Australia?
If we shift our focus away from TikTok for a moment, we can see that the government can’t always use their powers to ban apps willy-nilly. Trump’s executive order was made out of concern for national security and what he declared to be a ‘national emergency’.
However, this isn’t the case here. In Australia, our Department of Human Affairs didn’t find TikTok to be a threat to our national security. After scrutinising the app’s privacy and data usage, Scott Morrison has stated “there’s nothing at this point that would suggest to us that security interests are being compromised, or Australian citizens are being compromised.” 
This is a rapidly evolving situation, and one that will certainly have far-reaching implications on brands, influencers, multinational corporations, and international relations. With so many people worldwide using TikTok — and many relying upon it as a major source of income — the developments over the next few months are sure to get heated. 
For Australian businesses or influencers who are reliant on TikTok for income, there doesn’t appear to be any huge cause for concern, as of yet. However, it’s always important to be prepared for what may happen. If you’re heavily reliant on TikTok as a source of income, it might be worth speaking with a lawyer to ensure you’re fully protected if something does happen to the app here.
In any case, we’ll be watching this news unfold over the next few months with great interest. 
The post The U.S Ban On TikTok: Implications For Australia appeared first on Sprintlaw.

You’ve likely heard a lot about cryptocurrency (or ‘crypto’) and how it’s revolutionising the world of online payments. 
An increasing number of consumers are looking to purchase goods or services online using cryptocurrency. So, if you’re looking to get ahead of the curve, now may be a good time to start integrating crypto into your business.
If you’re considering accepting cryptocurrency as a form of payment in your online business or eCommerce store, there are a few things you must know. 
Cryptocurrency is a pretty complex topic, but we’re here to help you get your head around it! 
In this article, we’ll provide a basic overview of: 
Exactly what cryptocurrency isHow to accept cryptocurrency as a form of payment in your online businessKey risks to look out forThings to be aware of when selling products on a third party site that accepts crypto 
What Is Cryptocurrency? 
Cryptocurrency can be tricky for business owners (and, in fact, anyone!) to get their heads around. 
Put simply, cryptocurrency is a digital form of currency that uses encryption techniques to regulate the generation of units of currency and verify the transfer of funds. 
Cryptocurrency operates independently of a central bank.
Instead, cryptocurrency is stored on computerised databases, where it is protected by strong encryption to: 
Secure transaction record entriesControl the creation of additional digital coin recordsVerify the transfer of coin ownership.
There are various types of cryptocurrency out there. Some of the more popular cryptocurrencies you may have heard of include: 
Bitcoin Ethereum Libra
Of course, there are many other cryptocurrencies beyond those listed above. It’s important that you do your own research into the best cryptocurrencies to accept on your online store. 
What Are The Advantages Of Cryptocurrency? 
Some of the most commonly-discussed advantages of cryptocurrencies are:
It’s decentralised: Cryptocurrency is not controlled by a centralised bank, government or corporate board. Instead, it is a peer-to-peer mode of payment.It’s borderless: Payments can be sent and received anywhere in the world, so long as there is a computer and internet connection. It captures a broader market: Utilising cryptocurrency opens up a broader market of consumers across the world. It’s safe: Cryptocurrency data is stored within complex encrypted networks. This makes the data very difficult to breach or hack. It’s fast: Transactions and transfers are near instant. 
What Legals Should Your Business Have In Place Before Accepting Cryptocurrency? 
As a business owner, it’s important to have an efficient, stable and protected online store. We’d advise having your legal basics covered before you even consider accepting cryptocurrency.
One of the key legal foundations of an online business is a solid set of terms and conditions for your site.
A good set of online shop terms and conditions gives clarity to your customers on important points like: 
How payments workRefund policiesDispute resolution processesWhat happens if something goes wrong with a customer’s order
For more general information on choosing the right payment structure for your online business, check out our recent article.
How To Accept Cryptocurrency On Your Business’ Website
So, you’re ready to take the plunge into the world of crypto? Here’s a step-by-step list of how to accept cryptocurrency as a form of payment on your business’ site. 
1. Set Up A Cryptocurrency Wallet 
To accept cryptocurrencies on your business’ website, you must have a cryptocurrency wallet. 
Your business may wish to accept an exclusive list of cryptocurrencies, or you may decide to accept any cryptocurrency. Ultimately, it is up to you and what best suits your business. 
Some cryptocurrencies have their own recommended wallets. For example, Bitcoin recommends you use Bitcoin Wallets.
Generally, cryptocurrency wallets can be stored: 
On your desktopOnlineOn your personal/business mobileOn physical hardware 
There are two main types of cryptocurrency wallets: 
Hot Wallets: This is a hosted wallet, meaning that it is on the internet. While this is a more popular type of wallet, it is less secure and more susceptible to potential hackers. 
Cold Wallets: This is a wallet not connected to the internet. This may be in the form of a physical hard drive, and it is considered to be the safest and most secure type of wallet. Popular cold wallets include Trezor and Ledger Nano S.  
Each type of wallet has its pros and cons. However, it’s generally considered that a physical hardware wallet is best when dealing with large quantities of cryptocurrency. 
When choosing your wallet, you must ensure that the one you choose enables the cryptocurrencies your store is willing to accept. Importantly, it’s commonly advised to never purchase a second hand crypto wallet off Ebay.
Once you’ve set up your cryptocurrency wallet, you will receive:
A public address and QR code. Customers will use these details to deposit crypto directly into your business’ wallet. A private key. Your private key is your personalised ‘passcode’ to your crypto wallet. It’s super important to keep this private key written down in a secure place. Once it is gone, you may not be able to retrieve your crypto wallet. 
2. Integrate Cryptocurrency Into Your Business’ Website 
There are a few different ways to integrate cryptocurrency into your website. It is important you consider all options available and select the option that best suits your business’ needs. 
Here are some common methods for integrating cryptocurrency into your website. 
Manual Payment 
By using your personal QR code or public address from your cryptocurrency wallet, your customers will be able to easily deposit the relevant cryptocurrency directly into your cryptocurrency wallet. 
Popular wallets such as Coinbase Wallet have step-by-step guides on how to integrate cryptocurrency into key areas of your online business’ store. 
Have A ‘Pay With Crypto’ Button 
Having a ‘pay with crypto’ button on your website will further inform customers that crypto is an accepted form of payment. 
Accept Payment Via A Service Provider 
Some service providers offer an easy, simplified way of accepting crypto payments. 
Popular service providers include: 
CoingateCryptoWooCoinJar
Using these services can alleviate a lot of the stress associated with accepting crypto on your sire. However, it is important to be aware of the associated expenses.
Key Risks Associated With Accepting Crypto As Payment
Before you make the final decision to accept cryptocurrency as a form of payment on your site, there’s one very important thing you should be aware of: crypto can be volatile!. 
For example, the value of Bitcoin has been known to fluctuate significantly within the space of a few days. This is why cryptocurrency is often considered a long-term investment. 
As such, you may wish to transfer cryptocurrency payments into fiat (normal currency established by a Government, such as Australian dollars) immediately upon transaction. 
Some ways you can do this include: 
Manually transferring cryptocurrency funds from your crypto wallet into your fiat bank accountUsing platforms like Coinbase to automate this process
The cryptocurrency will then be transferred into your business’ bank account based on the cryptocurrency exchange rate. 
Tax Considerations 
According to the Australian Taxation Office, a capital gains tax (CGT) occurs when you dispose of your cryptocurrency. 
Disposal occurs when you: 
Sell or give away cryptocurrencyTrade or exchange cryptocurrency (including the disposal of one cryptocurrency for another cryptocurrency)Convert cryptocurrency to fiat currencyUse cryptocurrency to procure goods or services.
As such, it’s important to be aware of the tax implications associated with accepting crypto on your business’ website. 
For more information regarding tax and cryptocurrency, click here. 
Selling Products On A Third Party Site That Accepts Crypto 
Third party sites are a popular alternative for business owners who want to sell their products online but don’t want the hassle of setting up their own online store. 
For instance, Shopify recently announced that it’ll be accepting the cryptocurrency Libra as a form of payment for items sold on its platform. 
Even though you’re selling through a third party site, you should still do your research into the possible issues associated with accepting cryptocurrency. As mentioned above, cryptocurrency is very volatile and tax implications must be considered. 
It’s also important to review the terms and conditions of your third party site agreement. We can help you draft a set of custom terms and conditions for your Shopify store to ensure you’re properly protected.  
Need Help?
Cryptocurrency is an exciting area to delve into. And, as a business owner, it may be worth expanding your accepted forms of payment to include crypto. 
We understand that cryptocurrency is an extremely dense and complex area to get your head around. So, we’re here to help! 
Whether you want to understand the best payment structure for your online business, need your store’s terms and conditions updated, or have any other questions—get in touch! 
For a free, no-obligations chat, contact our team at [email protected] or give us a call on 1800 730 617. 
The post Accepting Cryptocurrency In Your Online Business appeared first on Sprintlaw.

Business owners often ask us whether there’s anything they can do to stop people reselling their products. 
The simple answer is no. 
If an individual has legitimately purchased your product, there is little you can do to stop them reselling it. 
Under Australian Consumer Law, business owners are prohibited from substantially lessening competition within the market. 
However, having exclusive Supply and Reseller Agreements can help improve the amount of control you have over your business’ products. 
We understand that it can be frustrating having little control over your products once they have been purchased. If resellers are causing headaches for your business, here’s what you need to know.  
How Do Reselling Businesses Operate?  
Buying and reselling legitimately bought products is legal in Australia. 
Reselling businesses are on the rise. For resellers, the investment and financial risk is low. And, thanks to online marketplaces such as Gumtree and Facebook Marketplace, reselling has never been easier. 
The basic structure of a reselling business looks like this: 
Jim legitimately purchases a product from Jeff’s business. Jim is now the owner of the product. Jim resells the product to Kerry. 
This process is legal. There is little control Jeff has over Jim and his resale of the product to Kerry. 
Even though Jeff doesn’t have a formal Reseller Agreement in place with Jim, Jim is still entitled to resell the product.
Stopping People Reselling Your Products May Be Considered Anti-Competitive Behaviour 
So, in the above example, why can Jim legally resell the product to Kerry? 
The main reason is that the Australian Consumer Law (ACL) prohibits anti-competitive behaviour. 
Put simply, anti-competitive behaviour is any practice or act that reduces competition within the market. 
Contracts, agreements, understandings or concerted practices that have the purpose of lessening competition within the market are strictly prohibited by the ACL. 
As a business owner, what does this mean for you? 
Because of the ACL’s rules on anti-competitive behaviour, there’s not much you can do to stop resellers. If you tried to stop people reselling your products after they’d been legitimately purchased, you’d likely be lessening the competition within the market.
Can People Resell Items That Contain Copyrighted Material? 
Generally, reselling items that contain copyrighted material is not an infringement of copyright, sl long as the material has been lawfully created and legitimately acquired. 
This is because Australian copyright law does not grant copyright owners the exclusive right to control the sale or resale of their copyright material.
However, copyright owners and distributors can potentially control the sale of this material through commercial Distribution Agreements. 
If you need a Distribution Agreement, we recommend you seek proper legal advice to make sure the Agreement conforms with Australian Consumer Law. 
Do You Have To Honour Warranties If Someone Resells Your Product?
If your business has a Supply Agreement with the manufacturer of your products, it’s likely that particular warranties are associated with selling these products. 
These warranties are often provided by a business in addition to the automatic consumer guarantees that come with products.
Legal issues may arise for the reseller if they resell a product with a warranty. 
Let’s consider the following example:
Jim has legitimately purchased a product from Jeff’s business. Jeff’s business offers a 12 month warranty on the product that Jim has purchased. Jim then resells this product to Kerry. 
So, is Kerry entitled to the 12 month warranty?
Without an authorised Reseller Agreement with Jeff’s business, Jim cannot grant Kerry the 12 month warranty offered by Jeff.
Unless otherwise stated, warranties your business offers on products are afforded to the original purchaser only. As a result, purchasers of resold items can’t rely on your business to extend warranties to them. 
Ultimately, as a business owner, you have little control over your product once it’s been legitimately purchased. While this means you can’t do much about people reselling your product, it also means your responsibilities decrease once the product is resold. 
So, Is There Anything Your Business Can Do To Control Resellers? 
Although you have little control over the resale of your products once they’ve been purchased, there are some legal arrangements you can put in place to protect your business. 
Let’s go through the two key agreements you should have if you’re concerned about resellers.
Supply Agreements 
Having a Supply Agreement will ensure your revenue streams are secure and legitimate, and that your liability is limited for defects in resold products.
Reseller Agreements 
Where possible, it’s beneficial to have a Reseller Agreement between your business and other parties you know will be reselling your products. 
Although this won’t prevent anyone else from reselling your products, a Reseller Agreement can: 
Help secure revenue streams Limit your liability for defects in resold productsSet out the rights and responsibilities of the parties, ensuring the reselling arrangement goes smoothly 
Need Help?
As a business owner, there’s little you can do to stop people reselling products they’ve legitimately purchased from your business. We know this can be frustrating! 
If you need help navigating your situation, our team is here to help. We’ll be able to guide you through your legal rights, and can put together a Supply Agreement or Reseller Agreement to make the resale process smoother for your business. 
For a free, no-obligations chat, reach out to us at [email protected] or on 1800 730 617.
The post Can I Stop People Reselling My Business’ Products? appeared first on Sprintlaw.

Many businesses are moving their operations completely online, particularly as they adapt to the impact of COVID-19. 
In recent months at Sprintlaw, we’ve seen a great rise in online coaching businesses, online directories, telehealth providers, and more.
Another significant growth area is online tutoring. With COVID-19 disrupting schooling and seeing students at all levels learning from home, this is a great opportunity for educators to take their skills online. 
Before you start offering online tutoring services, however, it’s important you have the right legal set up for your business. 
Here at Sprintlaw, we’re a completely online firm, so we know the go! Below, we’ll run through the key legals you’ll need to get your online tutoring business on the right track. 
Protect Your Business With An Online Tutoring Agreement 
An Online Tutoring Agreement is a contract that sets out the terms and conditions between you and the students you’re tutoring. 
It provides clarity around both parties’ roles and responsibilities, limits your liability, and reduces the chance of disputes occurring. 
An Online Tutoring Agreement typically addresses the following: 
Scope of ServicesWhat services are you offering your clients?How long will tutoring sessions be? What subjects will be covered in the tutoring sessions?What platform will be used for online tutoring sessions? 
Payment TermsWhat payment schedule will you use? (For example, you may use a subscription-based payment schedule or an hourly payment schedule.) When will you expect to be paid? Will you be paid partially or wholly upfront? Or will you expect payment within a certain number of days after the tutoring session?
Liability ProtectionHow will you protect yourself if something goes wrong? What will happen if a client is unhappy or suffers loss due to your tutoring services? 
Term and TerminationHow long will the tutoring arrangement last?How can either party get out of the arrangement? Will there be any consequences for doing so?
Dispute Resolution: What happens if there is a dispute?
Having an Online Tutoring Agreement is essential for ensuring you and your clients are on the same page. We recommend you speak to a lawyer to ensure your agreement reflects the unique nature of your tutoring business. 
Are You Hiring Other Tutors?
If you are thinking of hiring tutors other than yourself to teach your students, you need to have an Employment or Contractor Agreement in place. 
These agreements outline the roles and responsibilities of you and your tutors. It makes it clear to tutors what is expected of them and ensures your business is legally protected
An agreement with your employees or contractors should address things like:
What services will be provided by your employees or contractors? What subjects will they tutor? What platform will they use? How many students will they tutor?How will your employees or contractors be paid? Will it be weekly, fortnightly or monthly—or on a per-client basis?Who is liable if something goes wrong? You or the employee/contractor?How can the agreement be terminated?What happens in the event of a dispute?
Drafting an Employment Contract or Contractor Agreement can be tricky. It’s not advisable to draft these types of contracts without the assistance of a lawyer. Employment law is a heavily regulated area and if you accidentally include something that is unfair or illegal, your business could incur fines.  
Also, before you bring on any tutors to help you out, it’s important you know the difference between an employee and a contractor. Getting this wrong could have massive consequences for your business. 
Do Online Tutoring Businesses Need A Privacy Policy? 
A Privacy Policy outlines how your business collects, stores, handles and uses personal information. It assures your clients that their personal information is being collected and used in an appropriate manner. 
To protect both you and your clients, your online tutoring business should have a Privacy Policy in place.
Even if you’re operating on a platform that already has its own Privacy Policy, it’s still advisable to get a specific Privacy Policy for your business. This ensures that any unique elements of your business are addressed, and that the privacy of you and your clients is fully protected.
What About Website Terms and Conditions? Do I Need Those, Too?
If you have a website for your online tutoring business, Website Terms and Conditions will provide general rules and disclaimers for those who visit it. This is a really important document to have, as you can’t control how people use the material on your website. 
Website Terms and Conditions contain: 
Disclaimers in case a visitor to your site is hacked while using itDisclaimers for third party linksCopyright ownership of the content on the website
As is the case with your Privacy Policy, if your online tutoring business is using a platform that has its own Website T&Cs, you should still have your own. While these platforms may have their own T&Cs, they are not customised to your business’ particular needs. 
Getting A Working With Children Check
It is likely that, through your tutoring business, you will be working with students under the age of 18. 
Even though you’ll be interacting with students online, it’s still important that you and your employees or contractors have a Working with Children Check (WWCC). 
A WWCC lasts five years in NSW. You’ll need to keep on top of your state or territory’s specific requirements. 
Choosing A Tutoring Platform 
You may wish to launch your online tutoring business independently. Alternatively, you may choose to use a pre-existing platform such as Teachable.
Although Teachable has a solid set up with its own Privacy Policy and Website Terms and Conditions, it’s still important that you draft your own versions of these documents (as we’ve discussed above). 
Alternatively, you may choose to use a platform such as Zoom to conduct your tutoring sessions. 
Both options are completely suitable for an online tutoring business. 
However, you need to have a good look at the platform’s Terms and Conditions, Privacy Policy, Disclaimers and, if applicable, its payment methods. To minimise your legal risk, you should customise your legals to your business’ needs as much as possible. 
Need Help?
The right legal set up is the foundation of a successful online tutoring business.
It may seem like there’s a lot to get done. But don’t stress; our experienced team of lawyers is here to help.
Contact us at [email protected] or give us a call on 1800 730 617 for a free, no-obligations chat.
The post Setting Up An Online Tutoring Business appeared first on Sprintlaw.

At Sprintlaw, we’ve spoken to thousands of startups and small businesses.
For startups particularly, it’s quite common to create an app.
To protect that app, startup founders often jump to the conclusion that they need to “patent” the app. 
However, this isn’t necessarily a good idea. And it isn’t really the best way to truly protect your app.
Here’s why.
What Is A Patent, Anyway?
When you have a creative idea for your business, you want to make sure you can protect it so that nobody else profits off it. 
So, how do you do that?
There’s no way to protect an idea. Instead, it’s only when that idea is expressed in some material form that you can protect it. This is what we call protecting intellectual property (IP).
In Australia, there are many different ways to protect your intellectual property.
One of the most common ways to protect intellectual property is to apply for a patent with IP Australia (Australia’s agency for administering intellectual property rights).
Patents are typically suitable for anyone developing a new invention or innovation. It is a type of IP right that makes you the sole owner of a particular device, substance, method or process that you’ve created.
A standard patent lasts up to 20 years, which means you can enforce your patent right over anyone who might be infringing your right to patent.
Put simply, it means nobody else can benefit from your creation for a set period of time.
When you’ve just created an app that you want to protect, you might be thinking that a patent is the way to go.
However, patent laws are quite complex.
There are strict requirements for what can be accepted as a patent. The application process can also be a headache (and it’s very expensive).
So, before you think about patenting, it’s a good idea to speak with an experienced lawyer to help you decide whether this is the right option for you.
Can I Patent My App?
So, to address our initial question: can you actually apply for a patent for your app?
Technically speaking, yes. However, this would really depend on how your app works. For example, you might be eligible for a patent application if you are trying to protect a method—such as the functionality that your app performs on a mobile device.
However, your invention or innovation has to be “novel”. And with the world of apps constantly evolving, and with most apps running in similar ways, this could be difficult to prove.
As such, applying for a patent may not be the most suitable way to protect your app.
This is because you cannot protect the software code, display or concept of your app with a patent.
Plus, most apps have the same functionality. 
So what you’re actually trying to protect—whether that be the code running the software, the idea or the look of your app— can’t actually be protected with a patent.
Additionally, patents can take some time (and a lot of money!) to process. With the digital age moving so fast, it may not be worth your time and money to invest in a patent. 
Think of Snapchat: one of the original creators of the “Story” function on social media. Snapchat was unable to apply for a patent for its function, as it did not satisfy patent requirements (i.e. to be non-obvious and novel). And, before they knew it, most other social media platforms were using Snapchat’s story functionality on their own platforms.
It’s also important to note that you can’t show your app to the public before applying for a patent. 
This means that if you demonstrate, sell or discuss your invention in public before applying for a patent, it might stop your patent application from being successful.
So, if you want to discuss your app with employees or investors, they’ll need to sign a Non-Disclosure Agreement. Then, if your application is successful, your patent will be publicly available on IP Australia’s patent search. This effectively means you won’t be able to keep your app a “trade secret”.
Is A Patent Right For Me?
Deciding whether a patent is right for you will really depend on your app and how it works.
In most cases, it might not be practical to apply for a patent because:
It’s expensiveIt will take timeYou can’t go public with your app before the patent applicationThe method to your app will be made public if the patent application is successfulYou won’t actually be able to achieve what you want to protect
For a small business or a first-time startup, the importance of getting the ball rolling and the potential commercial returns may not justify the time, effort and money that goes into a patent application.
So, in deciding whether to apply for a patent, you should take a step back and ask yourself: what am I really trying to achieve with a patent?
Generally, we find that businesses want a patent to prevent someone else from copying their app idea. But, on a practical basis, it’s almost impossible to entirely protect an idea (especially as apps are constantly evolving).
A patent won’t really help you achieve this, so it may not be worth investing the time and money into it. 
If you’d like to read more on patent basics, IP Australia has some useful information here.
And if you’re still deciding whether a patent is right for you, speak to a lawyer.
How Else Can I Protect My App?
There are several other ways in which startups and small businesses can protect their app.
Though you can’t protect the idea of your app, you can still protect how it’s expressed. There are 3 main ways you can do this.
Trade Marks
As a first step, you can protect the branding of your app through a trade mark application. A trade mark is also an enforceable IP right on IP Australia.
For example, you can protect your app name or app logo by applying for a trade mark to protect those assets. This also involves an application through IP Australia. If all goes well, and IP Australia accepts your application, you’ll be able to exclusively use that trade mark in Australia for up to 10 years.
While trade marks don’t protect the concept or idea of the app, they’ll still protect the branding. It’s a good idea to be thinking about trade marks as soon as possible (before someone else registers a trade mark for your app name).
Copyright
Your app can also be subject to copyright protection. 
For example, you can protect your software code that runs the app or the app’s interface. Unlike trade marks, you don’t need to register copyright in Australia. Instead, it is an ‘automatic’ right and arises as soon as any creative idea is expressed in material form.
This means that, once you’ve created the software code or the design of your app, you own the copyright to it. 
However, this is where copyright gets a bit tricky. Generally, whoever creates the original work is the owner. But with small businesses and startups, it’s typical to use graphic designers and contractors to create these assets for you.
Under Australian copyright laws, the designer/contractor would still technically “own” the copyright to those assets—so you want to make sure they “assign” the ownership to you. 
This can be done contractually. For example, if you hired a developer to create your app’s infrastructure, it’s a good idea to have a contract with them. A Development Agreement would set out how they’ll be paid, what milestones they’ll have to reach, how they’ll maintain your app and, most importantly, who owns the copyright to the app.
In most cases, it’s typical for the developer to “assign” you the ownership of the app’s copyright. However, they might still ask for a licence to use some of that copyright for their own portfolio (for example, to attract future customers by showing off the work they did for you).
And this goes for anyone who is involved in your app. If you have employees working on your app, their employment contracts should include clauses addressing who owns the intellectual property they create.
Even without a full contract, it’s always a good idea to have some sort of legal documentation in place with the people working on your app. An IP Assignment Deed, for example, would suffice as a simple document that assigns copyright ownership back to you as a business.
Business Structure
You can also protect the copyright and ownership of your app through your business structure.
In startups particularly, it’s quite common to set up as a company. Creating a company means you set up an entirely separate entity (i.e. separate from you or your co-founders). You can make sure that all intellectual property related to your app is owned by that company.
This structure is a cleaner, smoother and safer way of protecting your business’ important assets—from your shares to your intellectual property. This means that all the IP sits safely within one entity, rather than between several co-founders.
And, if you want to take things a step further, you can also set up a Dual Company Structure. This is done by setting up two companies: an Operating Company and a Holding Company. 
While the Operating Company conducts the ordinary day-to-day business activities, the Holding Company would generally hold all the important assets (like cash and IP). This way, these assets sit safely within your holding company and are separate from any debts and issues that your operating company might incur. 
Dual companies are a really popular structure for startups who want to be extra safe with their most valuable assets. If you’re thinking of speaking to investors later down the track, keeping your IP and important assets secure is especially important. 
Speak To A Lawyer
So, we started with the question of whether you should think about patenting your app.
While a patent might not be the most practical option for your business, there are other ways to protect your app and IP. This opens up the conversation to the bigger world of business legals.
Need help navigating this world? That’s what we’re here for! Don’t hesitate to reach out to us on 1800 730 617 or at [email protected] for a free, no-obligations chat.
The post Thinking About Patenting Your App? Here’s Why You Shouldn’t appeared first on Sprintlaw.