ByLawyers News and Updates

Companies – FED

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Following an extensive author review, the By Lawyers Companies guide has been substantially enhanced. Users will find new commentary and a number of helpful new precedents.

The commentary now includes sections on Running a company and Company disputes.

With trademark By Lawyers practicality, the new sections of commentary assist practitioners to advise clients about most of the common issues which arise in the operation of small private companies, from managing company business, conducting meetings, issuing new shares and dealing with various types of company disputes, to negotiating share sales, handling insolvency events and participating in voluntarily winding up. Some aspects of the existing commentary on Setting up a company have also been enhanced and new precedents added.

Users will find the following new precedents have been added to the By Lawyers Companies Guide:

  • Retainer instructions – Company disputes;
  • Initial letter to company which has received a statutory demand;
  • Letter to the client  to make an appointment to sign documentation required for incorporation;
  • Letter to the client advising that the company has been incorporated;
  • Letter to the client with draft shareholder’s agreement;
  • New letters gathering information relevant to company disputes:
    • Letter to client requesting relevant documents;
    • Letter to director requesting inspection of company minutes;
    • Letter to director requesting company records; and
    • Letter to director advising of intention to seek a s 247A order to inspect company records;
  • New option precedents:
    • Notice of exercise of call option;
    • Notice of exercise of option to purchase
    • Notice of exercise of put option;
    • Notice of appointment of nominee;
    • Letter to seller’s solicitor exercising option; and
    • Letter to buyer’s solicitor exercising option;
  • Company resolution; and
  • Minutes of meeting – Directors.

These substantial enhancements to this already popular publication are part of By Lawyers commitment to constantly add value for our users and keep our content updated.

We invite you to peruse the new commentary and precedents in the Companies Guide, located in the Companies, Trusts, Partnerships and Superannuation publication. Also available in the Reference materials folder on each of these matter plans is the helpful reference manual Business structures and comparative table, which compares and contrasts the different types of business structures and considers their advantages and disadvantages, including from a taxation point of view.

 

 

 

Partnerships – updated precedents- FED

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The By Lawyers Partnerships publication has been updated, as follows:

Partnership agreements amended in Partnerships guide

The Partnership agreement and Limited partnership agreement precedents have been amended in a number of respects, including:

    • The ‘Duration of partnership’ clause has been removed, as this is sufficiently covered in the ‘Expulsion, retirement or death of a partner’ and ‘Dissolution’ clauses;
    • A new clause 4 (b) has been inserted, to allow for non-monetary capital contributions if these are agreed between the partners. A corresponding clause has been inserted as 8(d) in the Limited partnership agreement;
    • The ‘Expulsion of a partner’ clause has been updated to become ‘Expulsion, retirement or death of a partner’ and now has improved function. Please review the clause for the changes made. The corresponding clause in the Limited partnership agreement is named ‘Termination of partner’;
    • The ‘Winding up’ clause in the Partnership agreement has been renamed ‘Dissolution’ and amended to provide additionally for the situation where the partners agree to dissolve the partnership;
    • The ‘Notices’ clause has been amended to remove facsimile delivery;
    • Various other small amendments have been made to improve readability.

New letters added to Partnerships matter plan

Two new precedents letters have been added to the Partnerships matter plan:

      • Letter to client with draft partnership agreement – for originally sending the draft partnership agreement to the client;
      • Letter to client with draft agreement – for sending later variations of the document to the client.

These additions and amendments have been made as a result of user feedback and author review, to enhance the publication and assist solicitors in their daily practice when advising upon and preparing documents for clients entering into partnerships.

Practitioners who are regular users of these precedents may benefit from a careful review of each clause in the agreements, to ensure they are familiar with the amendments.

Costs disclosure – Increase of legal rates during a matter

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Increase of legal rates during a matter

All By Lawyers Costs Agreements and Client Service Agreements have been updated to include a clause notifying a client that legal rates may increase during the course of a matter requiring a revision of the costs estimate provided. This clause provides for 30 days written notice of any proposed changes to legal rates. While such a clause is not required by Legal Profession legislation concerning costs disclosure requirements, providing such notice on initial costs disclosure is considered best practice.

All of our Guides contain Costs Agreements (Client Service Agreements for QLD Guides) within the folder ‘A. Getting the mater underway’. All of our agreements are compliant with the relevant Legal Profession legislation and are reviewed and updated regularly to ensure compliance.

New Publication – Trusts Guide – FED

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By Lawyers have a comprehensive new Trusts Guide.

The new guide contains commentary and precedents for establishing a new trust, amending an existing trust, or bringing a trust to an end through vesting or termination.

This new publication is a substantial enhancement of the previous trusts section in our Companies, Trusts, Partnerships and Superannuation guide.

The new detailed Trusts Guide deals with the various types of trust structures, including:

  • Discretionary trusts;
  • Fixed unit trusts;
  • Non-fixed unit trusts;
  • Hybrid trusts;
  • Charitable trusts; and
  • Special disability trusts.

The commentary discusses important issues affecting the use of trusts including:

  • The financial planning and asset protection merits of different trust structures;
  • The rights and obligations of beneficiaries, unit holders and trustees, including corporate trustees;
  • Taxation requirements including income tax, land tax and trust loss provisions; and
  • Common dispute resolution methods.

The new guide also contains many essential and useful precedents such as:

  • A unit trust deed that meets the requirements of a fixed trust for land tax and loss-streaming purposes;
  • A unit trust deed creating multiple classes of unit holders;
  • A discretionary trust deed;
  • A combined unit holder and shareholder agreement;
  • A hybrid trust deed;
  • A charitable trust deed;
  • A special disability trust deed; and
  • Numerous supporting documents, such as deeds of amendment.

The new Trusts Guide is available to LEAP companion product subscribers through the Guides and Precedents button in a LEAP matter, or to By Lawyers website subscribers as part of the Companies, trusts, partnerships and superannuation guide.

Trusts – New precedent – Deed of termination

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Following a subscriber request, we have added a new precedent to our Unit Trusts Guide, being a Deed of termination of trust.

There are many reasons a client may wish to terminate or dissolve a trust prior to the vesting date. There are also several methods of bringing a trust to an early end including:

  • complete distribution of the trust property by the trustee;
  • revocation by the settlor or trustee;
  • the beneficiaries or unit holders consent to end the trust; and
  • a Court ordered termination of trust.

When brining a trust to an end there are many important issues for the trustee to consider including:

  • the procedures prescribed by the original trust deed;
  • all possible creditors; and
  • all possible taxation consequences – particularly CGT arising from the sale of any trust assets or in specie distributions.

The need for a deed confirming the termination of the trust was suggested by one of our subscribers. Having considered the issue, By Lawyers have created a simple new precedent Deed poll, terminating the trust. This will allow practitioners to ensure that when their trustee clients terminate a trust it is evidenced and supported by proper documentation.

At By Lawyers we are always grateful for any feedback on our precedents and will happily accommodate subscriber requests for new documents where appropriate.

 

 

SMSFs – New precedents – Retainer instructions

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We have published two new Retainer Instructions precedents in our Self Managed Superannuation Funds Guide.

The Retainer Instructions – Self managed superannuation fund is designed to assist practitioners when taking instructions from clients who are establishing a new fund. It covers all of the essential information required for the superannuation trust deed, including trustee and member details.

The Retainer Instructions – Existing self managed superannuation fund is designed to be used when a client wishes to make changes to an existing self managed superannuation fund that has already been established. It can be used to record instructions for a variety of situations including:

  • changing the fund trustee;
  • amending the rules of the fund;
  • making a new death benefit nomination or reversionary pension nomination; and
  • establishing a limited recourse borrowing arrangement.

Retainer instructions, which appear in “Getting the matter underway’ on all By Lawyers matter plans, are not only a useful precedent for file opening and matter management, they are a critical risk-management tool ensuring that all necessary information is obtained from the client and recorded.

Superannuation and downsizing

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The By Lawyers Self Managed Superannuation Guide has been updated to provide greater detail about contributions to superannuation as a result of residential downsizing.

From 1 July 2018, superannuation fund members aged 65 and over who downsize by selling their principal place of residence are able to contribute up to $300,000 from the proceeds of sale into their superannuation fund as a non-concessional contribution. Both members of a couple can take advantage of the concession for the same family home, allowing up to $600,000 per couple to be paid into superannuation from the sale proceeds of the family home.

Downsizing contributions are exempt from inclusion in the $1.6 million total superannuation balance cap. Instead, the contribution is included when the total superannuation balance is recalculated at the start of the new financial year.

This measure is available to superannuation fund members who have held their principal place of residence for 10 years or more, for contracts that are exchanged after 1 July 2018. The contribution must be made to the fund within 90 days of settlement of the sale.

Importantly, despite the term ‘downsizing’, there is in fact no requirement to purchase another home.

For more information about superannuation contributions, see the By Lawyers Self Managed Superannuation Funds Guide.

Joint venture agreements – Property development projects

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There are many different property development projects for which a joint venture structure may be suitable. Some common examples include:

  • A project where a property owner and builder agree to build a duplex on the basis that the builder and the owner each receive a unit by partition on completion;
  • Joint property owners who develop the property using a third party builder;
  • A developer and a property owner who develop a property by engaging a third party builder.

To help you structure these projects, By Lawyers have added a new precedent: Joint Venture Agreement – Townhouses development project.

This document is located in our Joint Ventures Guide and may be used in any of the situations listed above.

Our Joint Ventures commentary has also been updated to discuss use of the new agreement and the accompanying documentation necessary.

The By Lawyers Joint Ventures Guide ensures that practitioners can feel confident drafting agreements that capture the full complexity of their clients’ property development projects.

Companies, Trusts and Partnerships – Special disability trusts

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By Lawyers has expanded our comprehensive Companies, Trusts and Partnerships guide to include commentary and precedents covering special disability trusts.

A special disability trust can be established to provide for the care and accommodation of a disabled family member and if compliant will allow the disabled beneficiary of the trust to retain their full entitlement to a Centrelink pension. There are also generous concessions for contributions to a compliant special disability trust.

The commentary covers everything a practitioner needs to know about establishing a special disability trust for their clients, including:

  • beneficiary eligibility requirements;
  • contribution and concession guidelines; and
  • the permitted use of special disability trust funds.

The By Lawyers Special Disability Trust Deed is provided and includes all of the mandatory clauses from the model trust deed for special disability trusts published by the Department of Social Services, as required to comply with the Social Security Act 1991 and the Social Security (Special Disability Trust) Guidelines 2011.

 

Self managed superannuation funds – Updated commentary and new precedents

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Our very popular Self Managed Superannuation Funds Guide has been updated to include some new commentary and precedents dealing with death benefits and reversionary pensions.

New or enhanced precedents include:

  • a detailed new Pension Payment Agreement between the trustee and the member setting out the terms upon which pensions are to be paid from the fund;
  • an updated Product Disclosure Statement, from the fund to its members, explaining the basis for establishing a pension and the procedure involved in paying pensions from the fund;
  • a letter to the client – i.e.: the trustee of the self managed superannuation fund – enclosing and explaining the documentation; and
  • comprehensive Nomination forms, for death benefits and reversionary pensions, giving the member maximum permissible choice and flexibility as to how their superannuation is handled after their death.

These changes clarify and streamline the process of setting up pensions in a self managed superannuation fund, making a death benefit nomination or reversionary beneficiary nomination, in accordance with legislative requirements and allow users to give their clients the best advice and assistance.

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