1.Dive in unprepared.

• Making an offer before you understand the business and structure of the seller.
• Making an offer before you have undertaken proper due diligence.
• Not seeking professional advisors before you intend to enter a transaction.

2. Appoint the wrong advisors or appoint the right ones too late.

• Accountant
• Lawyers
• Business broker / corporate advisor

3. Fail to address tax and structuring issues from the outset.

• CGT
• Stamp duty
• Risks for buyer and seller entities
• Guarantees / warranties
• Limit of liability

4. Forget about working capital.

• Commonly misunderstood. Most share sales have a working capital adjustment and a level of cash and receivables are left in the business.
• In an asset sale, parties often reach agreement, but working capital is not addressed. When a buyer realises he needs another $500,000 to operate the business, the deal may fall over.

5. Jump to formal agreements when a term sheet might save time and money by ensuring parties are on the same page on key issues before diving into the detail.

6. Understand whether you can get along with the seller or buyer post settlement.

7. Fail to consider vendor finance and appropriate securities (and if seller is the ‘bank’ and you are working with them it can be uncomfortable).

8. Announce a sale too early

• To Staff
• To Suppliers
• To the Market

9. Ask due diligence questions too late and then ask for adjustments.

10. Competitor paranoia complex. Over thinking/assuming the buyer is just looking under your hood. ...

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Whilst the end of year work function is a great time for your team and business to celebrate your successes for the year, remember that your function needs to run as a ‘work’ function, without breaching your workplace health and safety obligations, your Human Resources policies and other legal obligations that your business must comply with. ...

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Gift cards: the backup when you're fresh out of ideas for that person who has everything.

Remember that time you excitedly went to cash in grandma's birthday present, only to find you were a week too late? Well, this dilemma is soon to change. ...

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Many tenants under retail or commercial leases don't realise the extent of their obligations once their lease comes to an end. De-fits and make-goods can be costly, so knowing your obligations before you sign your lease is key. ...

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On occasions, it is desirable to restructure the assets of a trust. The motivations for a restructure can include: succession planning, separating control of certain assets to different persons, separating passive investments from business activities, and separating different businesses. ...

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Trust splitting is a process that involves appointing a separate trustee for certain identified assets of a single trust. The purpose of a trust split is to separate the control and legal ownership of assets into separate trustees. The reasons for implementation include: succession planning, separating control of certain assets to different persons, separating passive investments from business activities, and separating different businesses. ...

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The ATO has had on its radar what it describes as stapled structures. It has identified a number of concerns that it has with stapled structures. Then in the May 2018 budget, the Government announced amendments to the law to address some of the concerns. ...

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Most trusts, and all private discretionary trusts, have what is known as a vesting date which is described differently in different trust deeds e.g. Vesting Date, Perpetuity Date, Termination Date, Vesting Day. The question often asked is what happens when that day is reached? This issue is considered by the ATO in Taxation Ruling TR 2018/6 Income tax: trust vesting - consequences of a trust vesting. ...

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Take note that from 30 January 2019 security interests registered for 7 years will begin to expire.

After its commencement in January 2012 many businesses registered security interests on the Personal Property Securities Register (PPSR) with a 7 year renewal option.

Nearly 7 years has passed since registrations on the PPSR commenced and they are about to start expiring.

Don’t Delay!

Once a registered security interest expires it can no longer be renewed.  Therefore, it is imperative that renewals are commenced in a timely manner and sooner rather than later.  You can, and should, extend your PPSR registration ahead of time.

If your security interest lapses and you register the interest again you run the risk of losing the protection that you may have enjoyed had the security interest been renewed, for example:

• Subject to exceptions, due to the first-in-time approach of the priority rules for enforcing security interests, if your business allows its PPSR registrations to expire so that a new security interest needs to be registered on the PPSR then, unless an exception applies, your business will go to the back of the security interest enforcement line.   This means that you may miss out on money owed to your business in the event you need to rely on the security interest.
• If the business granting your business the security interest becomes insolvent within 6 months of the security interest being re-registered after it has lapsed your security interest may not be effective. Again, you may miss out on money owed to your business.

Where to Begin?

Identify what security interests you have registered on the PPSR and when they expire.  Diaries the expiry date and set a reminder well in advance of expiry to renew the registration.  Check all the information is correct and seek assistance if in doubt.

Takeaways

The first 7 year PPSR registrations are coming up for ...

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Australia has numerous industry codes and laws governing franchising. Industry codes are sets of enforceable rules and measures regulating the conduct of that industry. Franchising is regulated by the Franchising Code of Conduct (Code), together with the Australian Consumer Law (ACL)

The Australian Competition and Consumer Commission (ACCC) is the nation's competition and consumer watchdog. A compliance and enforcement priority of the ACCC for 2018 is the protection of small businesses in relation to unfair terms in business contracts. Franchisor-compliance with the Code and the ACL is on the forefront of the ACCC's radar.

With this ACCC focus, it is important that franchisors review and audit their standard template franchise agreements to ensure full compliance, if they have not already done so. Of particular note is the business-to-business unfair contract terms regime under the ACL.

Franchisors should remember that the ACCC can require franchisors to provide to the ACCC documents which the franchisor is obligated to generate or keep under the Code, which include franchise agreements and disclosure documents.

The Unfair Contract Terms Regime and Franchise Agreements

Generally, franchise agreements are likely to be caught by the unfair contract terms regime because they are usually:

1. standard form (with little opportunity to negotiate the terms); and
2. for the supply of goods or services; and
3. entered into with a franchisee who meets the criteria of a 'small business' under the ACL; and
4. have an 'upfront price' payable to the franchisor of under $300,000 for an agreement less than 12 months in length, or $1,000,000 if over 12 months. Upfront price includes payments, fees and charges payable over the life of the agreement, which would include both the initial franchise fee payable when signing the franchise agreement and ongoing franchise or royalty fees payable for the duration of the agreement.

Importantly ...

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