Small Business Law

Some breaches might centre on a disagreement of the performance required, or a belief that the terms of the contract were not properly formed. In most cases, contractual disputes can be rectified quite easily. However, if the dispute goes to the heart of the contract, it may be terminated by discharge and you may have a right to sue for damages for any losses that may have been incurred due to the breach.

If you believe that a breach has occurred, you may elect to bring the contract to an end, or choose to continue with the contract on the condition that specific performance requirements are fulfilled. Please be aware that if you do decide to terminate a contract, the decision must be communicated clearly to the other party and must be unambiguous.

Alternatively, if the performance of the contract is deemed to be impossible, a contract may be discharged automatically.

This is a pretty easy thing to do. You'll just need to head over to .auda's page (the commercial body that administers Australia's domain names) and check to see if you are eligible. Assuming that you want a ‘com.au’ domain name for your new business (also known as a top-level domain or TLD), you'll need to fall into one of these categories:

• Be an Australian registered company (or a foreign company licensed to trade in Australia);
• Have an registered business name that you're using in an Australian State or Territory;
• Be in a partnership; or
• Work as a sole trader.

You can obtain your domain name from a commercial registrar and .auda lists accredited registrars for Australian domain names here:

http://www.auda.org.au/registrars/accredited-registrars/

Note: that having an ABN is not a formal requirement but the particular registrar that you choose may impose additional requirements on your business to get a domain name through them.

.auda's eligibility page can be found here:

http://www.auda.org.au/ea-policy

Of course you can go right ahead and apply. The whole point of getting an Australian Business Number (ABN) is to help get your business going, or to meet its growing goods and services tax (GST) obligations. Assuming you have everything you need, it is not uncommon for ABN applications to be approved online in the same day, although the Australian Business Register (ABR) may not show the details of your ABN or GST registration status for a few more days.

Two important matters to consider are, that you have a proper legal reason for obtaining an ABN, and that you are aware that it involves making some information public about your business. If you are in any doubt about your entitlement to an ABN, talk to the ABR and seek legal advice for more complex issues (such as whether your business is carried in Australia or makes supplies connected with Australia).  In addition, if you wish to obtain an ABN but do not want some information made public as part of your application, you will need to apply in writing to the ABR with reasons why you want certain information suppressed.

Bullying is defined by its behaviour, and can potentially affect the emotional, mental and psychological well-being of workers. Harassment and discrimination are usually pertinent to a particular characteristic e.g. race, gender or sexual orientation.

Behaviours which can be considered as bulling are as follows:

• physical or verbal abuse;
• screaming, yelling, offensive or demeaning language;
• excluding or isolating certain individuals;
• psychological harassment;
• threatening behaviour that intimidates a person;
• allocating meaningless or demeaning tasks to one worker, outside the scope of their job;
• assigning impossible tasks;
• designing work rosters to inconvenience a particular person;
• undermining work performance by not providing adequate information.

A contractual relationship between businesses located in Australia and overseas may be governed by the provisions of the United Nations Convention on Contracts for the International Sale of Goods (the Convention), in which Australia is a signatory, and has also been implemented in all jurisdictions. The provisions of the Convention are as such, that if any inconsistencies arise in relation to the Convention and any other law, then it is the Convention which prevails over the local law.

The overriding purpose of the Convention is the promotion of friendly relations between actor States through business, as well as the promotion of international trade.

“A lawnmower that is sold to a consumer who does not mention the purpose for which it is to be used might be expected to mow the lawn of an ordinary suburban house once per week for several years without any significant problems to satisfy the guarantee of acceptable quality. If a consumer indicates to a supplier that he or she wants a lawnmower to mow a 4 hectare block of land each week, the standard that the lawnmower would need to meet to be fit for that disclosed purpose would be higher than that required by the guarantee of acceptable quality for a domestic lawnmower.”

Online transactions usually fall into three types of e-commerce contracts, and they are:

• click-through
• shrink-wrap, or,
• browse-wrap agreements.

Each form of e-commerce contract requires that a customer undergo different steps in order to validate a transaction. However, it is perhaps the click-through version of the electronic contract in which would be most familiar to online shoppers.

The click-through contract generally requires a person to scroll through the terms and conditions of the agreement, and to then validate their acceptance of their wish to be bound by the enforceable contract, by clicking on a button or ticking a box at the end of the agreement.

If a small business owner wishes to create an enforceable contract, the following requirements must be evident:

• unambiguous notice to the customer that the online transaction is governed by the terms of contract law
• an opportunity for the customer to review the terms and conditions of the agreement before being bound by the contract
• a clear statement of what constitutes acceptance of the agreement.

You may be able to close your company assuming that:

• all members of the company agree to deregister;
• the company is not carrying on business;
• the assets of the company are worth less than $1000;
• the company has no outstanding liabilities; 
• the company is not a party to any legal proceedings; and
• the company has paid all fees and penalties payable under the Corporations Act 2001 (Cth).

This is done by the company, a director, or a member lodging Form 6010 with the Australian Securities and Investments Commission (ASIC) together with payment of a $35 fee. The form may be lodged online (if the company had previously registered with ASIC) or by post and can be found here: http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/6010.pdf/$file/6010.pdf

ASIC will then publish its intention to deregister the company by a notice in the Commonwealth of Australia ASIC Gazette. If no objections are lodged, then the company will be deregistered two months after publication of the notice.

Even though the process may seem straightforward, you should always seek legal assistance to ensure that no formalities (such as member resolutions) are overlooked, and that your company is eligible for voluntary deregistration.

Further information is available at ASIC's website at http://www.asic.gov.au/ or by telephone on 1300 300 630.

In light of the recent scandals in the UK where journalistic practice was seriously called into question, it is pertinent to ask: "What regulations do small media businesses have to comply with?" Are they covered by small business exemptions under the Privacy Act?

The journalistic activities of media organisations in Australia are exempt from compliance with the National Privacy Principles (NPP) under the Privacy Act 1988 (Cth). Journalism was defined as, "the collection, preparation and dissemination of news, current affairs, information or documentaries, and other information to the public"; in the Privacy Amendment Bill 2000 (Private Sector). Tempering these exemptions, media businesses are subject to industry codes regulated by the Australian Communications and Media Authority and the Australian Press Council.

Problems arise in the regulation of these privacy exemptions with regards to the definition of terms, partciluarly the terms "in the course of journalism" and "media organisation". Although there have been ongoing calls and debates regarding the limiting, and specific definition of the term "journalism", this is arguably complex due to the rights of reporters and the public interest with regards to freedom of expression.

For more information about the journalism exemption in Australia, and to learn more about the debate regarding the definition of terms, visit http://www.alrc.gov.au/publications or contact your solicitor for an up-to-date assessment of your obligations and rights under the Privacy Act 1988.

The Australian Consumer Law (ACL) is the product of a cooperative reform effort between the Commonwealth Government and the States and Territories. From 1 January 2011, all Australian businesses have been operating under a national consumer law.

The (ACL) addresses:

• General standards of business conduct;
• The prohibition of harmful practices such as:
  • Misleading and deceptive conduct in trade or commerce, and
  • Unconscionable conduct in trade or commerce, and
  • The regulation of specific types of business to consumer transactions;
  • Basic consumer rights for goods and services including, rights regarding the quality of the goods or services provided; and
  • Safety of consumer products and product-related services.

The ACL is enforced by the Australian Competition and Consumer Commission, and State and Territory consumer protection agencies. Additionally, in cases involving financial products and services, the Australian Securities and Investments Commission is the regulating body.

Employers have certain tax and superannuation obligations. These obligations differ depending on whether a business worker is engaged as a contractor or employee. When you engage a worker as an employee, a business has the following key obligations:

• Pay as you go (PAYG) withholding;
• Payment of superannuation;
• Determination of whether any fringe benefits will be provided to the employee and maintenance of the necessary FBT records.

If you engage contractors, you are not required to withhold tax from payments except where:

• The contractor has not provided his or her ABN;
• A contract worker you engage with provides their work or services for your client under a labour hire arrangement between you and the client, or
• You have entered into a voluntary agreement with the contractor to withhold tax from payments.

It is also necessary to determine whether an independent contractor is eligible for superannuation. For example, for individual contractors, employers must also make super guarantee contributions for them if more than 50% of the value of their contract is for labour.

I signed a franchise agreement five days ago, and paid the franchisor an establishment fee of $30,000. After signing the agreement, I received a notice from my bank that my funding had been refused. I gave the franchisor notice  that I wanted to terminate the agreement under the seven day cooling-off period. Am I entitled to get my money back from the franchisor?

The Franchising Code of Conduct allows a franchisee to terminate a franchise agreement within seven days of either entering into the agreement or making any payments under the agreement.

If you have terminated the agreement within five days of signing the agreement and have paid the establishment fee, the franchisor must return the money to you within 14 days of the date you terminated the agreement.

However, the franchisor may be entitled to deduct any reasonable expenses from the money if they have included these provisions in the agreement.

Most of the time, a contract should be made in writing, with the terms of agreement clearly stated for all to see. The language or wording of the contract needs to be well chosen and precise. The less jargon used, the more understandable your contract will be to your customers. Make the offer clear, spelling out any conditions and time limits or restrictions. Also ensure that your contract states that it is legally binding, and that all parties involved understand all the terms of the agreement. Anticipate outcomes, and if you foresee any difficulties that may arise, include processes of resolution into the contract (e.g., how conflict will be resolved). It can save money in the long term to seek legal advice when drafting contracts.

Contracts for small businesses usually outline how the business is going to proceed with a client or service provider over a period of time. It is important that such contracts clarify the rights of the parties involved (who will receive what); the duties of the parties (who will do what); any limits and conditions placed on these rights and duties; and how difficulties will be handled or misunderstandings negotiated.

A contract can clearly state that in the case of a relationship breakdown or breach, resolution will be achieved through certain means, e.g. your solicitor can provide dispute resolution. For more information on this and related other issues, visit http://www.business.gov.au

Insurance is an important part of any small business, and here is a  checklist of things to consider to ensure  that you find the right policy.

• Which types of business insurance are recommended?
  • Confronted by a multitude of insurance options, it is essential for you to contact your lawyer to find out which insurance policies are necessary, as well as recommended for the operation of your business.
• What is not covered under the policy?
  • Having a thorough understanding of what your insurance policy covers, as well as what the policy excludes, will assist you in selecting the best policy to protect your business.
• What is the customer complaint rate?
  • All insurance brokers as a matter of public record, must disclose all complaints made against them. While a few complaints are nothing to be alarmed about, you should red flag any complaints regarding administrative or ethical matters.
• How can I reduce risk?
  • While you cannot eliminate risk completely, it is crucial to talk to a lawyer about specific ways to minimise risk associated with running your company.
    

Your entitlement for Parental Leave Pay will cease if you choose to return to work. If you do decide to return to work before the end of the 18 week Paid Parental Leave period, you must notify the Family Assistance Office. The unused portion of the Parental Leave Pay may be transferred to an eligible partner.

You can still "keep in touch" with your workplace without losing your entitlements by, participating in activities at the workplace (for up to 10 days) from the birth or adoption of your child, up until the end of the Paid Parental Leave period (excluding the first two weeks). However, this must be a voluntary agreement as an employer cannot make this a compulsory requirement. If you are self-employed and run a small business, you will be able to keep an eye on your business without being regarded as having returned to work. Furthermore, you will be able to oversee the business operations and perform the occasional administrative task, such as organising a repair or paying an account.