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The legal world is continuously changing. As a business person without legal qualifications, it can be overwhelming. We regularly produce articles and legal news in Australia so you can get an overview of legal matters that are relevant to you.
You'll also find articles about our team, our firm, and our services, so you can get to know us better. Feel free to dig into our current library, and if you have any questions, you know who to contact - the team at Sierra Legal are waiting to help.
Sierra Legal is proud to have advised the National Lotteries and Newsagents Association (NLNA) on an exhaustive tender process that resulted in the appointment of Finn Business Sales as the exclusive business broker of the NLNA, to represent Australian newsagents seeking to buy or sell newsagency businesses.
Sierra Legal is proud to have advised the National Lotteries and Newsagents Association (NLNA) on an exhaustive tender process that resulted in the appointment of Finn Business Sales as the exclusive business broker of the NLNA, to represent Australian newsagents seeking to buy or sell newsagency businesses.
Finn Business Sales is part of Australia’s largest business brokers network – The Finn Group – which is Australia’s largest network of business brokers in Australia and has offices in all major cities and regional areas of Australia. Australian newsagents looking to buy or sell newsagency businesses will therefore benefit from the depth of experience and resources available to Finn Business Sales.
The NLNA is the peak national body representing the interests of Australian newsagents and lottery agents. Over 5,000 Australian newsagents and lottery agents have subscribed with the NLNA, which was formed with the clear purpose of improving the income and profile of its subscribers.
As part of its partnership with Finn Business Sales, the NLNA has established “News4Sale”, which is a platform that enables Australian newsagents to list their newsagency businesses for sale. The “News4Sale” platform is available to all Australian newsagents via https://www.nlna.com.au/news4sale/.
Sierra Legal is an industry partner of the NLNA and is the preferred provider of commercial legal services to the NLNA and its subscribers. We congratulate Finn Business Sales on its successful tender and appointment as the exclusive business broker of the NLNA.
For more information, please contact Craig Sanford and Kenneth Gitahi at Sierra Legal.
Sierra Legal would like to congratulate Straight Bat Private Equity on the recent completion of its first portfolio investment in one of Australia’s leading process engineering service providers.
Sierra Legal would like to congratulate Straight Bat Private Equity on the recent completion of its first portfolio investment in one of Australia’s leading process engineering service providers.
Straight Bat Private Equity is an income oriented private equity fund that invests in mature, highly robust, medium sized Australian businesses and as a long-term partner with founders.
Straight Bat Private Equity is associated with the family of Flight Centre co-founder Geoff Harris AM, and its team includes Geoff and Brad Harris, Janine Allis, Adam Lewis, Steve Gledden, Rob Nicholls and Richard Palmer.
Sierra Legal assisted Straight Bat Private Equity on all the legal aspects of its first portfolio investment.
For more information, please contact Craig Sanford or Ken Gitahi at Sierra Legal.
Here are the latest news updates from Sierra Legal - Newsletter.
We recently sat down with Jonathan Lewin, Commercial Director of Simoco Wireless Solutions Pty Ltd.
In this Q&A, Jonathan shares his thoughts on the importance of having an effective set of terms and conditions for use with suppliers.
We recently sat down with Jonathan Lewin, Commercial Director of Simoco Wireless Solutions Pty Ltd.
Simoco Wireless Solutions specialises in building wireless communications networks for sectors where reliability, integrity and clarity are paramount, from utilities to government, public safety to transport.
In this Q&A, Jonathan shares his thoughts on the importance of having an effective set of terms and conditions for use with suppliers.
What are supplier terms and conditions?
Supplier terms and conditions set out the basis on which a business and a supplier to that business will transact with each other.
While a business will usually have a set of terms and conditions for use with its customers or clients, many businesses do not have their own terms and conditions for use with their suppliers.
Why are they important and what is the advantage of having them?
It is important that a business has its own supplier terms and conditions because a business’ own terms of supply are likely to be more favourable to the business. This is particularly important for regular or high-value suppliers. If a business does not have its own supplier terms and conditions:
While it may not always be possible for a business to engage a supplier on the business’ own supplier terms, the advantage to the business of having such terms is that:
Sometimes, if a supplier insists on using their own terms and conditions, the business can also use its own supplier terms and conditions as a guide for requesting changes to the supplier’s terms and conditions that may be more favourable to the business.
In your experience, what are the most negotiated terms or concepts in a supplier’s terms and conditions of trade?
In general, I usually find that the most commonly negotiated terms with suppliers are:
After that, other areas of focus are usually concepts relating to when risk in the goods or services passes from the supplier to us, termination rights, indemnities and limitations on liability.
In your experience, what can be some of the worst outcomes for a business if it is not able to use its own supplier terms and conditions or at least negotiate some more favourable terms in the supplier’s terms and conditions?
I have had experiences where a business has either had to:
Because the supplier’s terms and conditions limited the supplier’s liability for such things, there was limited recourse for the business and as such the business decided to “settle” the matter by paying an agreed amount to the relevant supplier (as it wasn’t worth it for the business to engage in a lengthy dispute resolution process with the supplier).
I have also been involved in a situation where a business ordered goods from a supplier under the supplier’s terms and conditions, where the goods were required for a high-value contract with the end customer. The supplier delivered some but not all the goods which caused the business to be in breach of its contract with the end customer. Because of the non-delivery of the goods, the business withheld payment for the goods. The supplier then made payment claims against the business (notwithstanding the fact that it failed to supply the majority of the goods that were ordered). The business was then forced into a semi-litigious battle with the supplier which resulted in significant loss and damage to the business. This may have been mitigated if the business had used its own supplier terms and conditions or a more favourable version of the supplier’s terms and conditions.
Thanks to Jonathan for his time and for sharing these thoughts and tips.
If you are a business that requires wireless communications network solutions, get in touch with the team from Simoco Wireless Solutions (https://www.simocowirelesssolutions.com/).
If you are a business owner and have any questions on the legal aspects of your customer or supplier terms and conditions, or if you require assistance with preparing a set of customer or supplier terms and conditions, please get in touch with one of the Sierra Legal team.
We were delighted to assist CEO James Rennie and Australian UAV on their recent acquisition of, and merger with, leading drone business Uaviation. It was a pleasure working with James and his team!”
You can ready more about Australian UAV and Uaviation here - https://www.auav.com.au/auav-uaviation-merger/
Jen has just enjoyed a 6 month secondment with Medibank’s in-house legal team, supporting their Customer and Portfolio division and advising on consumer-facing collateral and their customer loyalty program. During that time, she gained insight into the private health insurance industry (including how it responded to Covid-19), Medibank’s diverse business, and how its flexible culture supports work/life balance. She also picked up some tips on how to look after her health and wellbeing!
As part of the DynamicBusiness.com.au "Let's Talk" series, Sierra Legal Senior Associate Troy Mossley shares his thoughts on "the legal support your business needs." Read Troy's thoughts and the rest of the discussion here - https://dynamicbusiness.com.au/featured/lets-talk-the-legal-support-your-business-needs.html
Sierra Legal Director, Michael Jeffery, has recently been featured in this article by Dorna Moini from Documate. Thanks Dorna!
Following the launch of Arreis Automation - Sierra Legal’s new document automation service - in 2019, we are excited to be named in Australasian Lawyer’s Innovative Firms 2020 list!
Following the launch of Arreis Automation - Sierra Legal’s new document automation service - in 2019, we are excited to be named in Australasian Lawyer’s Innovative Firms 2020 list!
Arreis Automation helps businesses, law firms and other professional service firms with their document automation needs, by designing, coding and hosting the contracts and other documents that they use on a repetitive basis (allowing those documents to be generated through a simple webapp).
If you have any questions about our legal services or how Arreis Automation can benefit your business, do not hesitate to get in touch with the Sierra Legal team.
Despite challenging conditions, we are still seeing a number of M&A/private equity transactions occurring across various industries. To assist owners of businesses/companies with the initial stages of planning a potential transaction for the sale of their business in Australia (or the sale of all or some of their shares in the entity that operates that business), we have prepared a high-level M&A planning checklist…
Despite challenging conditions, we are still seeing a number of M&A/private equity transactions occurring across various industries. The main drivers for these transactions seem to be:
To assist owners of businesses/companies with the initial stages of planning a potential transaction for the sale of their business in Australia (or the sale of all or some of their shares in the entity that operates that business), we have prepared a high-level M&A planning checklist which you can download free here – Download.
If you have any questions on the sale of your business (or if you are a buyer, on buying a business), please get in touch with the Sierra Legal team.
In this Q&A, Special Counsel Jenny Lau talks about what she likes to do when she isn’t advising on M&A deals and reviewing contracts, her love of Kyoto and dumplings, and the book she is reading at the moment…
We recently sat down with Special Counsel Jenny Lau to ask all the burning questions….
Certain types of documents (including wills, mortgages, affidavits, statutory declarations, and deeds) that are required to be signed by an individual (as opposed to a company) are only properly executed by that individual where they sign the document in the presence of a witness.
As a result of COVID-19 related social distancing requirements that are currently in place, some Australian states and territories have passed regulations to allow for the witnessing of certain types of documents by audio-visual link (e.g. via platforms such as Zoom, Skype, Teams etc)…
Following on from our recent article on signing of documents by companies during COVID-19, set out below is a summary of other updates to witnessing requirements that have been recently introduced in Australia.
Background
Certain types of documents (including wills, mortgages, affidavits, statutory declarations, and deeds) that are required to be signed by an individual (as opposed to a company) are only properly executed by that individual where they sign the document in the presence of a witness.
As a result of COVID-19 related social distancing requirements that are currently in place, some Australian states and territories have passed regulations to allow for the witnessing of certain types of documents by audio-visual link (e.g. via platforms such as Zoom, Skype, Teams etc).
As at the date of this article, the Australian Capital Territory, New South Wales, Queensland and Victoria have all passed legislation/regulations to temporarily allow some documents to be witnessed via audio-visual link. However, the Northern Territory, Tasmania and Western Australia are yet to follow suit (although the Tasmanian government has indicated that similar arrangements may be put in place soon). In South Australia, the list of persons who may take statutory declarations has been expanded, however, witnessing of documents must still be done in person.
Australian Capital Territory
In the ACT, the COVID-19 Emergency Response Act 2020 (ACT) (ACT Legislation) allows the signing of certain documents to be witnessed by audio-visual link. The ACT Legislation commenced on 14 May 2020.
The ACT Legislation applies to affidavits, wills, health directions and general or enduring powers of attorney.
The witness must:
The ACT Legislation also provides that a witness may:
The ACT Legislation will expire 12 months after the COVID-19 state of emergency declarations cease to be in force in the ACT.
New South Wales
In New South Wales, the Electronics Transactions Amendment (COVID-19 Witnessing of Documents) Regulation 2020 (NSW) (NSW Witnessing Regulation), allows the signing of certain documents to be witnessed by audio-visual link. The NSW Witnessing Regulation commenced on 22 April 2020.
The types of documents that can be witnessed in this way are wills, powers of attorney (including enduring powers of attorney), an agreement or deed (that individuals need to sign in the presence of a witness), enduring guardianship appointments, affidavits (including annexures) and statutory declarations.
Under the NSW Witnessing Regulation, a person who witnesses the signing of a document by audio visual link must:
The NSW Witnessing Regulation also allows:
in each case, as soon as practicable after witnessing the signing of the document.
The NSW Witnessing Regulation also allows other witnessing-related arrangements to be conducted via audio visual link, including confirming or verifying the signatory’s identity, and swearing or affirming the contents of an affidavit.
The NSW Witnessing Regulation is due to expire on 22 October 2020 (or a later date up to 12 months after it commenced if prescribed by regulation).
Queensland
In Queensland, the Justice Legislation (COVID-19 Emergency Response—Wills and Enduring Documents) Regulation 2020 (Qld) (QLD Regulation) allows the signing of certain documents to be witnessed by audio-visual link. The QLD Regulation commenced on 15 May 2020.
It allows for the signing of wills and enduring documents (e.g. enduring power of attorney) by individual signatories to be witnessed by audio visual link, provided the witness is a “special witness” (or if more than 1 witness is required, then at least 1 witness must be a special witness).
A special witness can be an Australian lawyer, notary public, a justice or commissioner for declarations approved by the chief executive, or a justice or commissioner for declarations provided they are employed by the law firm (or Public Trustee) who prepared the document and they witness the documents during the course of their employment.
The QLD Regulation also allows for a substitute signatory to sign a will or an enduring document, on behalf of the signatory, at their request provided that the substitute signatory meets the strict the strict requirements set out in the QLD Regulation.
A document may be witnessed by audio-visual link only if:
The special witness who witnesses the signing of a document by audio -visual link must take reasonable steps to identify the signatory’s identity and that the signatory’s name matches the name of the signatory on the relevant document.
The special witness must also provide a certificate stating
The QLD Regulation is due to expire on 31 December 2020.
Victoria
In Victoria, the COVID-19 Omnibus (Emergency Measures) (Electronic Signing and Witnessing) Regulations 2020 (Vic) (VIC Regulation) allows the signing of certain documents to be witnessed by audio-visual link. The VIC Regulation commenced on 12 May 2020.
The VIC Regulation allows the signing of the following types of documents to be witnessed via audio-visual link:
However, the witness must be able to satisfy himself/herself, via the audio-visual link:
A signatory must write or stamp under their signature a statement indicating that the document was witnessed using an audio-visual link in accordance with the VIC Regulation.
An example of a valid statement is:
“This document was witnessed by audio-visual link in accordance with the COVID-19 Omnibus (Emergency Measures) (Electronic Signing and Witnessing) Regulations 2020.”
There are also additional requirements for each type of document covered by the VIC Legislation. These requirements are summarised by the Victorian government in this link: https://www.justice.vic.gov.au/electronicwitnessing
These provisions will remain in place until the VIC Regulation is revoked.
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If you have any questions on signing a document, please get in touch with one of the Sierra Legal team.
With people working from home, or in lockdown, self-isolation or quarantine it has become more difficult for company officers to conduct physical, wet-ink execution of documents. As such, on 6 May 2020, a new temporary law was passed (which will last for 6 months from that date) that makes it easier for company officers to sign documents…
With people working from home, or in lockdown, self-isolation or quarantine it has become more difficult for company officers to conduct physical, wet-ink execution of documents. As such, on 6 May 2020, a new temporary law was passed (which will last for 6 months from that date) that makes it easier for company officers to sign documents.
This temporary law, which is implemented by way of the Corporations (Coronavirus Economic Response) Determination (No. 1) 2020 (“Determination”), modifies the operation of s127(1) of the Corporations Act 2001 (Cth) (Corporations Act) to provide, among other things, that an agreement or deed can be signed electronically by company officers.
Background on section 127(1) of the Corporations Act
Section 127(1) of the Corporation Act states that a company may sign a document without using a common seal if the document is signed by:
If a company executes a document in accordance with section 127(1), people will be able to rely on the assumptions in section 129(5) of the Corporations Act (that is that the document has been duly executed by the company) for dealings in relation to the company.
What the Determination does
In summary, the Determination:
What this means in practice
From a practical perspective, this now means that while the Determination is in force, the following methods of signing an agreement or a deed are permitted under section 127(1) of the Corporations Act:
Accordingly, the entire process of signing a document can be carried out using electronic communications provided that:
Some limitations
Please note that the following limitations still exist:
If you have any questions on signing a document, please get in touch with one of the Sierra Legal team.
On 31 March 2020, ASIC and the ASX announced temporary capital raising relief measures to assist ASX-listed entities affected by the COVID-19 pandemic to undertake emergency capital raisings. Click here for our previous article summarising these relief measures.
On 22 April 2020, the ASX updated its relief measures to clarify certain matters and to improve the overall operation of the relief measures. These updates took effect from 23 April 2020 and the key updates are summarised below:
On 31 March 2020, ASIC and the ASX announced temporary capital raising relief measures to assist ASX-listed entities affected by the COVID-19 pandemic to undertake emergency capital raisings. Click here for our previous article summarising these relief measures.
On 22 April 2020, the ASX updated its relief measures to clarify certain matters and to improve the overall operation of the relief measures. These updates took effect from 23 April 2020 and the key updates are summarised below:
Prior notification to ASX
Changes to the increased placement capacity relief
Follow on standard rights issues now allowed
Listed entities seeking to utilise the increased placement capacity under listing rule 7.1 are now allowed to undertake the placement, followed by a standard or accelerated rights issue, or, followed by an issue to existing security holders under a security purchase plan. Previously, only an accelerated rights issue had been contemplated by the ASX. This change is intended to benefit smaller listed entities that do not have a substantial base of institutional security holders and therefore get no benefit from undertaking an accelerated rights issue to institutional security holders.
Follow on security purchase plans
The following updates will be relevant for listed entities utilising the increased placement capacity under listing rule 7.1 in a placement that is to be followed by an issue to existing security holders under a security purchase plan (SPP):
Additional disclosures by listed entities
Back-to-back trading halts
ASX has clarified that:
Clarification of the withdrawal of ASX relief measures
Full details of the 22 April 2020 updates by the ASX to its temporary emergency capital raising relief measures can be found here.
On 31 March 2020, ASIC and the ASX announced temporary capital raising relief measures to assist ASX-listed entities affected by the COVID-19 pandemic to undertake emergency capital raisings…
On 31 March 2020, ASIC and the ASX announced temporary capital raising relief measures to assist ASX-listed entities affected by the COVID-19 pandemic to undertake emergency capital raisings.
ASX relief measures
The temporary emergency measures announced by the ASX will be implemented by way of class order waivers under listing rule 18.1 (meaning listed entities do not need to apply individually to the ASX to access the relief measures), and they will expire on 31 July 2020 unless the ASX otherwise decides to remove or extend them. A summary of the main temporary emergency measures is as set out below:
Back-to-back trading halts
Increased placement capacity
Waiver of 1:1 limit on non-renounceable rights offers
Full details of the ASX relief measures can be found here.
ASIC relief measures
Full details of the ASIC relief measures can be found in ASIC’s media release on 31 March 2020 entitled “20-075MR Facilitating capital raisings during COVID-19 period”, which is accessible via ASIC’s website.
In response to the coronavirus (COVID-19) pandemic that is currently impacting Australia and the world, the National Cabinet agreed on 7 April 2020 that all Australian states and territories would implement a mandatory “Code of Conduct” for commercial tenancies.
In response to the coronavirus (COVID-19) pandemic that is currently impacting Australia and the world, the National Cabinet agreed on 7 April 2020 that all Australian states and territories would implement a mandatory “Code of Conduct” for commercial tenancies.
What is the purpose and objective of the Code?
Who does it apply to?
Business tenants with annual turnover of up to $50 million and who are also eligible for the Commonwealth Government’s JobKeeper programme.
When does the Code come into effect and how long will it apply?
Each state and territory will have its own “effective date” (to be after 3 April 2020) to bring the Code into effect. The Code will be given effect through relevant state and territory legislation or regulation. The Code is not intended to supersede such legislation, but aims to complement it during the COVID-19 pandemic period. Please check the relevant state or territory government website for updates on the implementation of the Code in your state or territory.
The Code is expressed to apply during the COVID-19 pandemic period, as defined by the period during which the JobKeeper programme is operational. However, some of the leasing principles in the Code (see further detail below) may extend for a “reasonable subsequent recovery period”.
What are the principles under the Code?
The Code sets out 11 overarching principles to guide any temporary arrangements that may be required to be agreed between landlords and tenants during the COVID-19 pandemic period. These principles generally encourage landlords and tenants to work together to negotiate in good faith and act in an ‘open, honest and transparent manner’ to agree appropriate temporary leasing arrangements to achieve mutually satisfactory outcomes.
The Code also sets out the following 14 leasing principles to guide landlords and tenants in negotiating and implementing any temporary commercial leasing arrangements that may be required during the COVID-19 pandemic period:
While the leasing principles are high-level and, in some cases, their practical application may be unclear, landlords and tenants should be guided by the overarching principles. Further guidance and/or updates on this subject matter may also become available as the Code is implemented in each state and territory.
What happens if the landlord and tenant cannot agree on temporary leasing arrangements under the Code?
The matter should be referred to applicable state or territory retail/commercial leasing dispute resolution processes for binding mediation (including Small Business Commissioners / Champions / Ombudsmen, where applicable).
Where can I get a copy of the Code?
You can access a full copy of the Code via this link, which is made available by the National Cabinet: National Cabinet Mandatory Code of Conduct - SME Commercial Leasing Principles during COVID-19
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If you have any questions regarding the effects of the COVID-19 pandemic on a commercial lease, please get in touch with one of the Sierra Legal team members.
Integrated development environments (IDEs) have long been used by computer programmers as a way to improve efficiencies, reduce mistakes, and standardize outputs. In the latest release of the MIT Computational Law Report, Michael Jeffery provides an overview of the ways that IDEs could improve the practice of legal drafting.
As part of the Dynamic Business "Let's Talk" series, Sierra Legal Senior Associate Troy Mossley shares his thoughts on pivoting and adapting business due to coronavirus…
As part of the Dynamic Business "Let's Talk" series, Sierra Legal Senior Associate Troy Mossley shares his thoughts on pivoting and adapting business due to coronavirus:
“As a boutique M&A, corporate advisory and commercial law firm, we have had to completely reconsider our deal pipeline, the legal issues faced by our clients and the way in which we can continue to assist them.
A key part of this is continuing to have conversations with (and be a sounding board for) our clients, at no charge, to discuss their businesses and concerns, and the ways in which we can help each other through this period. At the very least, we think this is just the right thing to do in these difficult times.
We also believe that continuing these conversations, regardless of whether any work will arise, will lead to new opportunities for us and our clients in the future. We are also fortunate in that our ‘lean’ business model means that pre-CVOID-19 all of our lawyers primarily worked from home offices, so while we have not had to adapt the way we work, we have been able to quickly adjust to our clients’ circumstances by being very flexible in the way in which we charge for our legal services.”
Read more of the discussion from business owners and entrepreneurs here - https://dynamicbusiness.com.au/featured/lets-talk-pivoting-and-adapting-your-business-due-to-coronavirus.html
The Coronavirus Economic Response Package Omnibus Act 2020 (Act) is now law. The Act includes temporary amendments (which started on 25 March 2020 and will continue for a period of 6 months from that date) to the Corporations Act and Bankruptcy Act to assist businesses and individuals navigate through this period.
A summary of the amendments are as follows:
The Coronavirus Economic Response Package Omnibus Act 2020 (Act) is now law. The Act includes temporary amendments (which started on 25 March 2020 and will continue for a period of 6 months from that date) to the Corporations Act and Bankruptcy Act to assist businesses and individuals navigate through this period.
A summary of the amendments are as follows:
For corporations:
For individuals:
Safe harbour: The Act also includes a new safe harbour provision so that directors of a company that incurs a debt while the company is insolvent (or the company becomes insolvent as a result of incurring the debt) will not contravene the Corporations Act (and those directors will not contravene their personal duty to avoid insolvent trading). This safe harbour is provided on the condition that the debt is incurred in the ordinary course of the company’s business during the 6 month period commencing 25 March 2020. The explanatory memorandum to the Act suggests that a director is taken to incur a debt in the ordinary course of business if it is necessary to facilitate the continuation of the business during this six month period, which could include, for example, a director taking out a loan to move some business operations online or debts incurred through continuing to pay employees during the Coronavirus pandemic. Please be aware that the Corporations Regulations may stipulate circumstances when this safe harbour will not apply. However, the relevant updates to the Corporations Regulations have not yet been published.
In line with ASIC’s approach to refocus its regulatory efforts on challenges created by the COVID-19 pandemic, ASIC is helping listed companies raise capital quickly by giving temporary relief to enable certain ‘low doc’ offers (including rights offers, placements and share purchase plans) to be made to investors, even if they do not meet all the normal requirements. This will assist companies that need to raise funds from investors urgently because of the impact of COVID-19.
Please see the recent ASIC media release for further details or get in touch with a member of the Sierra Legal team.
To all of our clients, colleagues, friends, supporters, referrers, contacts and members of the broader Australian business community, in the coming weeks and months, Sierra Legal is here to assist in any way that we can.
To all of our clients, colleagues, friends, supporters, referrers, contacts and members of the broader Australian business community, in the coming weeks and months, Sierra Legal is here to assist in any way that we can.
If you need to discuss any issues that your business is facing, please use this link (https://www.sierralegal.com.au/meetings) to arrange a complimentary telephone call with one of our experienced lawyers. In these challenging times, we may not have all of the answers. However, if we cannot help you ourselves, we have a vast network of trusted contacts that are specialists in range of disciplines (including accounting, business advisory, restructuring and turnarounds, financial planning, business broking, insolvency and other specialist areas of law) and we are always happy to provide recommendations and introductions.
Even if you do not think your concern is a legal matter, please feel free to get in touch with one of the Sierra Legal team and we will do whatever we can to help.
As the Coronavirus pandemic sweeps across the globe, many Australian businesses are experiencing unprecedented levels of disruption. This is due in large part to measures introduced by Australian and foreign governments to control the spread of the Coronavirus, including travel bans, geographic lock downs and social distancing and quarantine/isolation requirements. These measures have disrupted supply chains within Australia and globally, and the ability of individuals to travel freely, both within and outside Australia.
Since the effects of the Coronavirus pandemic will likely linger for the foreseeable future, it is important that parties under a contract take immediate steps to head-off any issues that may arise. We would recommend taking the following actions:
As the Coronavirus pandemic sweeps across the globe, many Australian businesses are experiencing unprecedented levels of disruption. This is due, in large part, to measures introduced by Australian and foreign governments to control the spread of the Coronavirus, including travel bans, geographic lock downs and social distancing and quarantine/isolation requirements. These measures have disrupted supply chains within Australia and globally, and the ability of individuals to travel freely, both within and outside Australia.
In this environment, the ability of individuals and entities to comply with ongoing contractual obligations may be severely tested, and in some cases, may be rendered impossible. Even though the occurrence of a global pandemic could not reasonably have been foreseen by parties to a contract, a party that is unable to comply with its contractual obligations due to the effects of the Coronavirus pandemic may, depending on the terms of the relevant contract, still be in breach of the contract and liable to compensate the counterparty for the counterparty’s resulting losses.
Since the effects of the Coronavirus pandemic will likely linger for the foreseeable future, it is important that parties under a contract take immediate steps to head-off any issues that may arise. We would recommend taking the following actions:
Undertake a review of active contracts
Now is the time to undertake a review of your active contracts, with the assistance of your lawyers, to identify the options or remedies that are available if either you, or a counterparty, cannot comply with contractual obligations in the current circumstances.
Some key things to look out for in a contract review are:
Regular communication with counterparties
Keep in regular contact with the other party(ies) to your contract and notify them as soon as possible if you suspect, or expect, that you may not be able to comply with any obligations due to the effects of the Coronavirus pandemic.
Notifying your counterparties early may enable them to take steps to minimise or eliminate any adverse effects that they may experience if you are unable to perform one or more contractual obligations. This may help generate and maintain goodwill between the parties, which may be required if you need the counterparty’s co-operation to amend the contract to accommodate the difficulties you are experiencing.
The contract may also contain a specific requirement requiring you to notify the counterparty in writing if you suspect, or expect, that you may not be able to comply with any obligations under the contract. A failure to do so may constitute an event of default.
Take action to mitigate any losses
It is not just the party that may be prevented from complying with its contractual obligations due to the Coronavirus pandemic that should take some action. If you anticipate that the counterparty to your contract may experience difficulties in complying with the contract due to the Coronavirus pandemic, you should take active steps to minimise the losses you may suffer as a result.
Not only is this a prudent commercial approach to take, it is also required by law in many instances. Even if the counterparty breaches the contract and you are entitled to terminate the contract and recover from the counterparty the losses you have suffered as a result, you may be prevented under law from recovering any losses that you would not have suffered had you taken reasonable steps to minimise your losses.
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If you have any questions regarding the drafting of, or compliance with, any commercial contracts given the effects of the Coronavirus pandemic, please get in touch with Ken Gitahi or one of the other Sierra Legal team members – https://www.sierralegal.com.au/team.
Would your corporate group benefit from lodging one set of accounts with ASIC?
Certain wholly-owned companies may be relieved from the requirement to prepare and lodge audited financial statements under the Corporations Act, where they enter into a deed of cross guarantee with their parent entity, other entities in their corporate group, and meet certain other conditions. The end result is that only the parent company needs to prepare and lodge audited accounts with ASIC, which can simplify financial reporting requirements and reduce costs.
Would your corporate group benefit from lodging one set of accounts with ASIC?
Certain wholly-owned companies may be relieved from the requirement to prepare and lodge audited financial statements under the Corporations Act, where they enter into a deed of cross guarantee with their parent entity, other entities in their corporate group, and meet certain other conditions. The end result is that only the parent company needs to prepare and lodge audited accounts with ASIC, which can simplify financial reporting requirements and reduce costs.
If you work with a large corporate group that is seeking to take advantage of this reporting relief, or if you work with a corporate group that already has a deed of cross guarantee in place and the structure of the group has changed (or is planning to be changed), we recommend that you start the process as soon as possible so that the relevant documents can be prepared, finalised and lodged with ASIC by 30 June.
If you have any questions on the ASIC instrument and obtaining relief, or if you need assistance with preparing and lodging the relevant documents, please get in touch with one of the Sierra Legal team.
You can book an online video conference with us using the link below:
We recently sat down with James Nickless, General Counsel at The MaxSoft Group.
James, having previously been a Partner at 2 national law firms specialising in body corporate and strata law, has been General Counsel at MaxSoft for 2.5 years.
James shares his thoughts on the biggest lessons he has learnt in his role as General Counsel and his favourite thing about working as in-house legal counsel.
We recently sat down with James Nickless, General Counsel at The MaxSoft Group.
MaxSoft (through its subsidiaries including StrataMax, StrataCash, StrataPay and StrataLoans) is one of the leading providers of software and financial services to the body corporate and strata industry.
James, having previously been a Partner at 2 national law firms specialising in body corporate and strata law, has been General Counsel at MaxSoft for 2.5 years.
James is the first legal counsel employed by MaxSoft and, in his first General Counsel role, he shares his thoughts on lessons learnt in the past 2.5 years.
What are some of the biggest lessons learned from your first role as General Counsel?
What is your favourite thing about working in-house?
Having “buy-in” to the company as a whole and being able to experience the difference made by my contribution. In private practice, much of my interaction with clients was transactional in nature and I didn’t often get to see the lasting effects of my work. It would generally be the case that “if it ain’t broke, don’t talk to the lawyer”. It is nice now to be able to give things the full attention that they need, not simply the amount of time I could allocate between various clients or the effort commensurate with the amount a client wanted to pay.
We thank James for his time and for sharing these thoughts and lessons. Hopefully they resonate with other in-house lawyers.
At Sierra Legal, we assist a number of in-house legal teams. If you are interested in exploring different ways of working, we would be happy to share some insights with you. These insights include some things other in-house legal teams are doing to deliver value to their clients and get the most out of their external legal spend. Please get in touch with one of the Sierra Legal team - https://www.sierralegal.com.au/team
As part of the Dynamic Business "Let's Talk" series, Sierra Legal Senior Associate Kenneth Gitahi shares his thoughts on going public!
As part of the Dynamic Business "Let's Talk" series, Sierra Legal Senior Associate Kenneth Gitahi shares his thoughts on going public:
“A proprietary (or private) company may consider going public (that is, converting to an unlisted public company) to make it easier to raise capital from the general public. However, this benefit needs to be weighed against the increased regulatory and cost burdens that apply to public companies.
The requirement to hold an AGM, appoint an auditor and prepare audited financial reports, are among the key regulatory and cost burdens that public companies face. Public companies also pay a much higher annual registration fee and they must have at least 3 directors and at least 1 company secretary. Removing a director of a public company can only be done at a general meeting by shareholders (and not by directors). Removing an auditor requires ASIC’s consent.
Even greater regulatory burdens are faced by public companies listed on a stock exchange, which must also comply with the rules of the stock exchange.
Seeking independent professional advice before going public is vital.”
Read more of the discussion from business owners and entrepreneurs here - https://dynamicbusiness.com.au/featured/lets-talk-taking-your-company-public-with-an-ipo.html
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