Category Archives for "Company"

Photo by Annie Spratt on UnsplashKnowing the legal work involved for expanding your solo director company helps you manage legal risk.  I’ll explain the legals you’ll need to expand and why, in the order of mandatory to best practice to help you manage your resources.  In a hurry? Jump ahead.  Quick Navigation Company structure changes (mandatory)Shareholder Agreement (best practice)Founders Agreement […]

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 […]

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 […]

Photo credit:  Raw Pixel, Unsplash First, do you even need to have a company secretary? Your private company is not required to have a secretary but, if it does have 1 or more secretaries, at least 1 of them must ordinarily reside in Australia (per section 204A of the Corporations Act). Who can be a company secretary?So who […]

Photo credit:  Raw Pixel, Unsplash Per the Corporation Act’s small business guide, your startup’s accounting requirements depend on whether your company is classified as small or large.  Also, your company’s classification can change from one financial year. What is a small company?So, a company is classified as small for a financial year if it satisfies at least 2 […]

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 […]

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 […]

Photo credit:  Gemma Evans, UnsplashDid you know that there are rules set by Australian Securities and Investments Commission (ASIC) for your company’s registered office and place of business? Below, I’ll take you through those rules.  It’s important to know the rules because a breach can be a strict liability offence. So what exactly does this mean? It means that […]

Photo credit:  Jessica To’oto’o, UnsplashReplaceable rules are rules for the internal management of your company. These rules are found in the Corporations Act 2001 (Cth). Also, the rules will apply to a company that’s registered after 1 July 1998 and any company registered before 1 July 1998 that has since repealed its constitution.Which rules?Now, a 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 […]

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 […]

Photo credit:  Raw Pixel, UnsplashDirectors and employees have a duty not to use information improperly.  So, this includes using information for a personal or third-party advantage or to cause detriment to the company. And this duty is in section 183 of the Corporations Act 2001 (Cth).   Also, similar to the other director duties, the duty not to […]

Photo credit:  Raw Pixel, UnsplashA director, secretary or employee must not improperly use their position.  So this means that directors cannot use their position to gain an advantage for themselves or others or cause detriment to the corporation. This is a civil duty in section 182 and a criminal duty per section 184 of the Corporations Act. Now […]

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 […]

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 […]

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? […]

Are you considering allocating a director role at your startup? Here are some useful tips to help you decide.You may have a number of people helping you at your startup. Should you allocate a  director role to all of them? Short on time? Below is a 33 second summary of the key points. Below are a […]

Allocating shares to directors at your startup? Here are some useful tips to help you.1. Shares instead of a director’s service feeIf you have launched your startup with another director and with little or no funding,  it is likely that you have  thought about shares taking the place of a director’s service fee, at least […]