All Posts by Vivian Michael

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About the Author

Vivian Michael is a lawyer and founder of Michael Law Group. Vivian's mission is to make quality business legal services accessible to Australian businesses that would otherwise DIY, rely on legacy contracts or go without.

The rights of a shareholder with over 50% voting rights in an Australian company

By Vivian Michael | Shares

Photo by Anete Lūsiņa on UnsplashBelow I’ll explain the rights of a shareholder with over 50% shares based on the Corporations Act.  And I am going to use the term shareholder because its more widely known than ‘member’ which is used in the Corporations Act 2001. So, here’s what a shareholder over 50% of shares can do.MeetingsIf company directors fail […]

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What you need to know about your marketing promotions and the Australian SPAM Act 2003

By Vivian Michael | Startup Contracts

Photo by Brooke Cagle on UnsplashIf you are thinking of running a promotion to target potential customers, read on. Below, I’ll share what you need to know to avoid spam legal trouble. In a hurry? Jump ahead.  Quick Navigation Australian law Who needs to comply?When do the spam rules apply?Key rulesPermission (consent) IdentificationUnsubscribeUsing public directoriesDirect contact Address harvestingPurchasing listsOther contraventionsSpam rule exemptionsExempt message […]

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Contract negotiation and preparation tips

By Vivian Michael | Startup Contracts

Photo by Kaleidico on UnsplashHere are the contract negotiation and preparation tips you’ll need to arm yourself with.   In a hurry? Jump ahead.  Quick Navigation MOU for the first proposalWhen to get a lawyer’s helpWho prepares the legal document?Seperate lawyers?Lawyer to talk to lawyer?File formatTime frameDeal breakers first, alwaysNo resolution?Negotiation style says a lot! Is it really a missed […]

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Taking up your former employer’s business opportunities after resigning

By Vivian Michael | Startup

Photo by Azamat Zhanisov on UnsplashYou’ll likely have access to business connections and opportunities after working with a company for some time, especially as a director with access to key information. So should you make use the contacts and opportunities? Here’s what you need to know based on a court decision. The case  we’re going to look at is Southern Real […]

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Confidential information meaning & a sample clause

By Vivian Michael | Startup Contracts

Photo by Deleece Cook on UnsplashThere’s a reference to confidential information in many business contracts.  But what do the courts say is confidential? Below are the factors that the courts consider when determining if information is confidential.   In Wright v Gasweld, the court lists factors to determine whether information is confidential. Confidential information criteria1. The extent to which the information is known […]

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Director and employee duties after resigning from an Australian company

By Vivian Michael | Employment

Photo by rawpixel on UnsplashDirectors still have duties after they resign from an Australian company.  And here’s what you need to know from the case of Advanced Fuels Technology v Blythe & Ors [2018] (AFT case).  In a hurry? jump ahead. Quick Navigation Case backgroundTargeting customersRestraint of trade Fraudulent and dishonest conductLawful competition defenceFiduciary’s personal benefit or gainGood faith – s. […]

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Shareholder rights to put resolutions at meetings

By Vivian Michael | Shares

Photo by Hey Beauti Magazine on UnsplashI’ve been writing a lot about shareholder rights lately, with good reason – shareholder rights aren’t that obvious.  Now, if a shareholder only has visibility of their rights in a shareholder agreement, it’s easy for that shareholder to believe they only have those rights only. Not so. Shareholders have rights under the Corporations Act 2001. […]

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When to switch a contractor to an employee agreement

By Vivian Michael | Business Purchase , Employment

Photo by Mimi Thian on Unsplash  There are differences between employees and contractors. You can read all about those here.When to use a contractor agreement The best use scenario for a contractor agreement is project work by a highly skilled worker.  Typically, contractors are autonomous workers that need little or no direction to perform their work which may be a specific […]

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Director pay at an Australian startup company

By Vivian Michael | Startup

Photo by Mimi Thian on Unsplash If you are starting up in Australia, here’s what you need to know about director pay. First, the corporations Act 2001 applies to Australian companies. However, it does not prescribe director’s fees.  Rather, there’s a replaceable rule (non mandatory rule) about director pay – it’s in section 202A of the Corporations Act 2001 and here’s […]

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Director delegations in Australia

By Vivian Michael | Company

Photo by rawpixel on UnsplashAt some point, as a director, you may decide to delegate duties to someone else.  Now, directors are able to delegate duties because of section 198D of the Corporations Act 2001.  In fact, directors may delegate any of their powers to: A committee of directors;A director;An employee of the company; or Any other person. And they’ll need to record […]

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Legal tips for running a promotion in Australia

By Vivian Michael | Startup Contracts

Photo by John Jackson on UnsplashIf you are running or even considering running a promotion in Australia, I have some useful tips to share with you.  These are the key tips. As always, get advice if you’re in doubt. In a rush? jump ahead. Quick Navigation Be clear about your offering1. Describe2. Exclude3. Time frame4. Simultaneous offers5. CancellationBalanceConsumer law tipsServicesBonus […]

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Varying and cancelling share class rights

By Vivian Michael | Shares

Photo by rawpixel on Unsplash​Here’s what you need to know if you want to vary or cancel rights for a certain share class. In a rush? jump ahead. Quick Navigation What are share classes?If your constitution sets out a procedure No constitution rulesNotice of variation or cancellationIssuing new class of shares varies rightsIf there’s no unanimous support to vary, cancel […]

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Selecting, using and changing an Australian company name

By Vivian Michael | Business Structures

Photo by Kieron Mannix on UnsplashHere are the rules you need to know about to select, use or change an Australian private company name. In a rush, jump ahead! Quick Navigation When a name won’t be availableNo name companies Acceptable abbreviationsReserving a company name Where to use your company name Names  you can’t use Changing a company name ASIC may direct a company to […]

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Why the company structure is most popular in Australia

By Vivian Michael | Business Structures

Photo by Liam Pozz on UnsplashThere are 4 business structures to choose from in Australia, these are the sole trader, company, partnership and trust structures.  Amongst these, the company is by far the most popular in Australia followed by sole trader, partnership and finally trusts. In fact, by the end of 2018, 38% of private businesses were companies in Australia.  So […]

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Shareholder meetings at Australian private companies

By Vivian Michael | Shares

Photo by rawpixel on Unsplash  So here’s what you need to know about how shareholders (aka members) are able to participate in meetings and their meeting rights.   Our focus in this article is unlisted companies. Let’s begin.Directors may call meetingsThere’s a replaceable rule that says directors may call shareholder meetings – it’s in section 249C of the Corporations Act.  And as […]

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Does your Australian company need to hold directors meetings to pass resolutions?

By Vivian Michael | Company

Photo by Campaign Creators on UnsplashYou are likely juggling many important tasks as a business owner, so, you may be wondering if you may avoid meetings such as meetings to pass resolutions. The Corporations Act 2001 (Cth) regulates companies in Australia, and we are going  to cover what it says.  First, if you are both a sole director and sole shareholder, you […]

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What goes into the shareholder register of your Australian company?

By Vivian Michael | Shares

Photo by rawpixel on UnsplashFirst, what exactly is a register? A register is a record of certain company information that must be kept because it’s a Corporations Act 2001.  Also, below I will use the term ‘shareholder’ because it’s more familiar than ‘member’.  Finally, I will only be covering companies with under 50 shareholders and companies that are not on the […]

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Business structures in Australia

By Vivian Michael | Business Structures

Photo by Laura Cros on UnsplashEver wondered which business structures are popular in Australia? and how they work? (and no, I am not talking about the physical structures you can see in the picture above!).  There are 4 main business structures in Australia, these are 1) sole trader 2) company 3) partnership and 4) trust. Below I’ll give you a […]

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The difference between legal information and legal advice

By Vivian Michael | Startup , Startup Contracts

Photo by rawpixel on UnsplashSo you’ve probably seen a few disclaimers that read like this ‘legal information, not a substitute for legal advice’. We use a disclaimer like this ourselves on our downloads. This post will help you know the difference between legal information and advice and the importance of the difference.Legal informationLegal information is generic. It explains a […]

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How to prioritise your legal and accounting work for your startup

By Vivian Michael | Startup Contracts

Photo by Glenn Carstens-Peters on UnsplashYou aren’t alone. A feeling of overwhelm when you are first starting up your business is common.   Read on for some ideas to help you prioritise and launch smoothly. Accountant or lawyer first?Either an accountant or lawyer can help you with initial advice about your business structure. In fact, either an accountant or lawyer can help […]

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A lawyer’s tips for DIY Australian company registration

By Vivian Michael | Startup Contracts

Photo by Brooke Cagle on UnsplashIf you are considering a DIY Australian company registration, read on for some useful tips.You need to be aware of some important things before you register your Australian company, regardless of whether you use the Australian government portal or an online provider.Legal entity You are creating a legal entity.This means, your company can sue […]

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Why I love the mediation clause, why you should too & a sample mediation clause for your use

By Vivian Michael | Startup Contracts

​Photo by Kyle Loftus on UnsplashI love the mediation clause Why? Because it  can save you time and money if there’s a dispute.  For this reason, to me and many others, the mediation clause makes sense.  Basically, you agree upfront to mediate upfront with your business partner/stakeholder or whoever in an agreement, and instead of going to court, and you work things […]

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When courts in Australia help oppressed shareholders

By Vivian Michael | Shares

Photo credit:  Alexandra Marcu, Unsplash Oppressed shareholders need to know they have options. They can communicate with the company’s board, meditate or go to court.  In this article, I’ll take you through real-life cases to give you an idea of when courts in Australia help oppressed shareholders.  And, shareholders are able to bring an action against an oppressive […]

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Directors duty to disclose a personal interest

By Vivian Michael | Company

Photo credit:  Warren Wong, Unsplash Director’s have a duty to disclose a material personal interest. Now, it’s important to know about this duty because a breach is a strict liability offence.  So, strict liability means intent is not necessary. A breach is a breach.  Below, I will take you through what the duty to disclose means for directors in […]

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The legal powers of an Australian company

By Vivian Michael | Company

Photo credit:  Raw Pixel, Unsplash  Your company has legal powers both inside and outside Australia.  So below we’ll walk through powers and internal rules for an Australian company. Company powersCompany powers are found in section 124 of the Corporations Act 2001 (Cth) and below is a list of those powers:issue and cancel shares and issue debentures;grant options […]

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What is a subsidiary?

By Vivian Michael | Company

Photo credit:  Thomas Drouault, UnsplashA subsidiary (body corporate) is an enterprise that’s controlled by another controlling enterprise (another body corporate) in one of the ways below. The controlling enterprise of the subsidiary either:controls the composition of the subsidiary’s board; ORis able to cast 50% or more of votes at the subsidiary’s general meeting; orholds more than […]

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Director’s insurance – do I need it?

By Vivian Michael | Company

Photo credit:  Guy Stevens, UnsplashDirectors and officers insurance can help you manage risk, whatever your business. It’s a good idea to discuss insurance decisions with any cofounders and advisors.  While some businesses may decide to opt in, for other businesses, if it’s a contract requirement, they may not have a choice. For example, some shareholder agreements  have a […]

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The good faith duty of a director

By Vivian Michael | Company

Photo credit:  Raw Pixel, UnsplashDirectors have a duty of good faith. In fact, civil and criminal penalties may apply for a breach of good faith. Below is a break down of the good faith duty to help you better understand this director duty and avoid legal trouble.  Now, when you see the word director, you can also think […]

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Care and diligence of a director

By Vivian Michael | Company

Photo credit: Hannah Olinger, UnsplashCare and diligence is a requirement for directors per section 180 of the Corporations Act 2001 (Cth). And this section also applies to agents acting on behalf of directors. Why is the duty of care and diligence important for directors? Because there are legal consequences if directors don’t exercise care and diligence.  First, let’s start […]

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Requests for flexible working arrangements

By Vivian Michael | Employment

Photo credit: Dai KE, UnsplashSection 65 of the Fair Work Act 2009 (Cth) allows employees to request a change in their working conditions like hours and location or working part-time. Example circumstances Employee’s may request flexible working arrangements if they employee is:the parent or has responsibility for a child of school age ​a carer has a disabilityis 55 or […]

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How to cash out annual leave in Australia

By Vivian Michael | Employment

Photo credit: Raw Pixel, UnsplashCashing out annual leave simply means that instead of taking the annual leave, you are paid it. Now, annual leave cash outs are possible either because of terms included in a modern award or enterprise agreement OR a written agreement between an employer and award or agreement free employee per section 94(1) of […]

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Genuine redundancy meaning & payments

By Vivian Michael | Employment

Photo credit: Alex Knight, UnsplashBelow is a simple guide to genuine redundancy. A redundancy is genuine if you no longer need a position because of business changes and there has been consultation with the employee per any award or enterprise agreement that applies. And, it won’t be a case of genuine redundancy if redeployment was an unexplored option […]

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How to use Awards for your Australian business

By Vivian Michael | Employment

Photo credit: Sridhar Gupta, UnsplashHow to use Awards for your Australian businessSo what is an Australian Award and how can you use one for your Australian business? Let’s start with the Award definition below.Award definitionAn Award states the minimum terms and conditions for employees in an industry. There are currently 122 Awards in Australia. And it’s good […]

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Annual leave tips for workers at your startup

By Vivian Michael | Employment

Australian National Employment Standards allow annual leave for your workers. In this article, I explain these entitlements. Understanding employee entitlements can save you headaches when you hire workers. So here’s what you need to know about annual leave for your workers. 1. Australian employee annual leave entitlementsFirstly, for each year of service at your startup, your employees are […]

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Deed of Accession Guide

By Vivian Michael | Shares

A startup’s guide to the deed of accessionSo what exactly is a deed of accession ? In short, it’s a legal document that binds someone to an existing agreement.  For this purpose of this post, we are referring to a deed of accession that binds a new shareholder to an existing shareholder agreement.  And why have […]

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The startup’s share sale agreement guide

By Vivian Michael | Shares

How to use a share sale agreementA share sale agreement outlines sale terms between a share seller and buyer. And, a share sale agreement is not to be mistaken for a shareholder agreement because they have 2 different roles.  This difference means it’s not ideal to replace a share sale agreement with a shareholder agreement. So what exactly […]

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Shareholder agreements: a simple guide for startups

By Vivian Michael | Shares

Answers to common questions about shareholder agreementsThis article tackles some of the common questions about shareholder agreements asked by startups launching in Australia. So what is a shareholder agreement ?Simply, a shareholder agreement set out the rights and responsibilities of shareholders.  Importantly, a shareholder agreement is not the same as a share sale agreement.  A share sale […]

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Transfer of business & employee contracts: how to manage employee contracts before and after buying a business

By Vivian Michael | Employment , Startup Contracts

What to know about employee contracts after you buy a businessIf you are thinking about buying a business with existing employees, here are some useful tips to help you.  First, you should check the employee contracts.1. Pre-purchase check of employment contracts Before you buy a business, you can check the key terms of any written employee contracts.  So […]

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Top 5 deed of settlement tips: how you can protect your startup when you are asked to sign a deed of settlement

By Vivian Michael | Startup Contracts

Top 5 deed of settlement tipsThe end of a business relationship can be stressful but you can navigate a settlement better if you are armed with some useful information.  A deed of settlement sets out how a dispute will be resolved. Also, a deed can prevent others from taking legal action in certain situations, like when an […]

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The difference between a client agreement and terms and conditions and when you should use each at your startup

By Vivian Michael | Startup Contracts

What you need to know about client agreements and terms and conditions  Terms and conditions and client agreements both have an important place in your startup.  Knowing when to use each can help you can set clear expectations for your customers when they work with you.So, terms and conditions – what are they?Your terms and […]

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Director changes & ASIC records

By Vivian Michael | Company

Our practical tips for director changes and ASIC records A director resigns,  you need to add a new director either on an ongoing basis or for a specific time period,  either way,  you will need to record the change internally and you will need to let ASIC know. Here are our tips. Too busy to read on? […]

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How to use an employment agreement

By Vivian Michael | Employment

While an employment agreement can be verbal, written or a mix of the two,  it is a good idea to have a written employment agreement to set clear expectations early and minimise disputes. And the beginning of the employment relationship is when you would typically expect to use an employment agreement. But did you know there are […]

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How to use a privacy policy at your startup

By Vivian Michael | Startup Contracts

A privacy policy outlines how your  will collect and use information about your customers.1. Does a small business need a privacy policy?The Privacy Act covers some small businesses with a turnover of $3 million or less and includes:private sector health service providers. Organisations providing a health service including traditional health service providers, naturopaths and chiropractor, […]

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4 things to know before you accept an Australian director position

By Vivian Michael | Business Structures , Startup

What does it mean to be a company director? we’ll take you through what should know about the key duties before you accept a director position. A company is operated by directors and secretaries. Both have obligations under Australian legislation.  Limited liability, the ability to allocate shares to investors and a favourable tax regime are all perks […]

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How to use a founders agreement at your startup

By Vivian Michael | Startup , Startup Contracts

Your founders agreement describes how you and other founders will work together to launch and grow your startup. So what’s the benefit of a founder’s agreement ? For one, you can set clear expectations and minimise disputes. We’ll go through some other’s too. Why should I choose a founders agreement over an employment agreement ?Firstly, unlike an employment agreement, all […]

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