If you are owed money for goods or services, the first step in attempting to recover it is generally to send a letter of demand to the other party setting out the amount of money outstanding and giving them a defined period of time within which to settle the matter by paying you the money owed or face legal action.
Letter of Demand The letter of demand is sent by you if you are owed the money (the creditor) or your lawyer and warns the person owing the money (the debtor) that if they don’t pay the debt within a certain time period (often seven days) they will be sued in court to recover the debt. A letter of demand should be the last letter a creditor sends before issuing court proceedings. While letters of demand are not court documents they are often an effective means of forcing the debtor to take action. The Federal Government has enacted legislation extending the unfair contract term protections of the Competition and Consumer Act 2010 (Cth) and the Australian Securities and Investments Commission Act 2001 (Cth) to the small business sector.
Under the new laws, a Court is able to declare that a term of a standard form small business contract is void if the term is unfair. The laws are an extension of existing provisions which have been available to consumers since 1 July 2010. The intent of the legislation is to level the playing field and prevent “take it or leave it” standard form contracts, which are commonly one-sided, from including unfair terms. The amendments are based on the assumption that small businesses, like consumers, often lack the resources or skills to understand and negotiate contract terms and are vulnerable to the inclusion of unfair terms. Agreements which could be caught by the provisions include retail leases, supply agreements, franchise agreements and finance contracts. In this article, we look at what the new regime means for your business. A company constitution is usually drafted in a standard format and does not provide protection for shareholders in the event of a dispute between them or where issues arise not covered by the constitution.
A shareholder agreement, which properly outlines the steps to be taken in the event of disputes and certain circumstances arising, can be an effective tool for avoiding the cost of litigation. A shareholder agreement sets out up front how disputes and deadlocks are to be resolved and allows shareholders to resolve issues which arise - quickly and with finality. If you are considering buying a business there are many things you need to do from a legal, financial and general business perspective. Getting the right advice from the start is important. The structure of and issues involved in the sale are quite different if you are buying the business assets only, compared with the shares in the company that owns the business.
In this article we will highlight some of the key issues to be considered. Making sure you follow the right process before signing any documents is a key component of a successful business purchase. The main things to do before signing a contract are:
During difficult economic conditions it is important that all directors revisit their duties as directors and are aware of how the board should deal with the situation where a company is in financial difficulty and may be insolvent.
What is insolvency? A company is deemed to be insolvent when it cannot pay its debts as and when they fall due. The test sounds simple however its application involves a range of accounting and legal issues. When determining a company’s solvency a Court will consider the overall financial circumstances as a matter of commercial reality. Particular emphasis will be placed on a cash flow test, however, there are also a range of balance sheet factors including the ability to realise the value of assets and raise further funds, be it equity or debt. Privacy laws known as the Australian Privacy Principles were introduced in 2014, the laws are a new set of privacy principles affecting the handling of personal information.
If you have a website privacy policy you should review it for compliance with the privacy principles. The aim of the principles was to bring Australia’s privacy laws (first introduced in 2001) in line with current technology trends and to provide more transparency around the capture and use of personal information. The principles apply to organisations and Government agencies and fines of up to $1.7 million may apply for non-compliance. |
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