To prepare a thorough Will, it makes sense to work with an experienced professional. Before you get started, here are some of the things to think about.

What to include in a Will: Top questions to answer

Here are some of the basic things to consider to begin with:

Who will be Executor?

It is vital to have an executor for your Will.

The executor manages the conditions of your estate after you have passed. They can be a person or an organisation, and they are responsible for ensuring that the instructions in your Will is carried out.

Many people appoint executors from outside the family because it is a time-consuming and complicated job, and it can often cause emotional stress.

It is also wise to name a substitute executor who can step up if your first choice is unwilling or unable to carry out their duties.

What assets do you have and wish to pass on?

Your Will should have an extensive list identifying all your assets you wish to give to selected people.

The more comprehensive you are in naming all assets like properties, vehicles, shares, or valuables, the easier it will be for them to go to the right people.

It may take some time to get clear on what you own but you can prepare the list over a few weeks and update it as necessary. Think about your most sentimental belongings as well as valuable assets, sometimes these are more meaningful to people than big-ticket items.

Who are your beneficiaries?

Your Will must outline exactly who will receive the proceeds of your asset and estate.

Beneficiaries are not necessarily family members or friends. They can also be charitable organisations or other entities to which you intend to donate.

It is also a smart move to cover the possibility of a beneficiary dying before you do. If you have left a large sum to a sibling, for instance, but they pass before they are able to inherit, it’s wise to have a second person or entity in mind.

Who will get custody of your children and pets?

Parents or guardians of children who are still under 18 need to name new guardians in the event of their passing. Failing to do so may result in the children going into government care.

While not as serious, the care of any pets should also be covered in your Will to ensure that they are taken care of.

Should you establish a trust?

If you have younger children or care for someone with a disability, you might also consider establishing a trust that will assist them as they go through life. A professional Wills and Estate lawyer can work with your accountant to set this up.

What will your funeral arrangements be?

Your Will should outline your desired funeral arrangements, whether you wish to be cremated or buried, whether you wish for a religious or secular service and other such details.

This way, your family and friends know they are sending you off in the manner that you desired. It makes the process of farewelling you much easier.

How will people access your accounts and digital profiles?

In this day and age, it is helpful to have a record of all your digital accounts and profiles so they can be closed and taken care of after your death.

Who can help to formalise your Will?

Wills are complicated and legally binding.

Failing to seek professional assistance can cause problems when it comes to the fulfilment of your wishes.

It can be very easy to overlook small details or miss sections in the paperwork that make all the difference.

The last thing you want is your beneficiaries squabbling over the details of your last wishes. Have your Will prepared or reviewed by a skilled professional and you’ll have peace of mind that it is legally binding.

Give yourself and your family peace of mind. Reach out to Legal Affairs Lounge to start preparing your Will today.

Disclaimer: The information contained in this news post is general in nature and is intended to provide a general summary only and should not be relied on as a substitute for legal advice. Whilst the information is considered to be true and correct at the date of publication, changes in circumstances after the time of publication may impact upon the accuracy of the information.

One question we are often asked about at LAL is how tax applies on the sale of a business. There isn’t a black and white answer, but this article will give you an understanding of how it all works.

Paying tax on a business sale

The sale of a business is counted by the Australian Tax Office as part of the business’s taxable income. Think of it as your parting ‘gift’ to the tax office!

The tax rate you pay on the sale of your business depends on the form it takes, with the two most commonly sold structures in Australia being sole traders/trusts and companies.

• Business sale tax for sole traders and trusts

For sole traders and trusts that distribute to individuals, the amount of tax you pay depends on the value of the business at sale. The tax rate is separated into two brackets:

• $90,001 – $180,000: a rate of $20,797, plus 37% on every dollar over $90,000
• $180,001 and above: a rate of $54,087, plus 45% on every dollar over $180,000

Both brackets also incur the Medicare levy fee of 2%.

• Business sale tax for companies

Tax on companies is usually between 25% and 30%, depending on base entity rules.

Capital Gains Tax

Capital Gains Tax (CGT) applies to the sale of all businesses in Australia, regardless of structure because a sale is regarded as a capital gain.

The ATO considers capital gains to be any profit that your business brings in by selling assets. CGT is the tax the ATO charges on that profit.

Therefore, selling a business for more than it was bought for is a capital gain and will be taxed.

Capital gains tax will vary depending on:

• The initial cost of establishing the business
• The sale price
• The businesses tax structure
• Possible tax concessions
• Total income earned over 12 months

Minimising your tax bill

As inevitable as taxes are, there are always ways to make sure you don’t overpay.

Small businesses have the most options available to apply for tax concessions. The ATO classes small businesses in Australia as:

• Having an annual turnover of less than $2 million
• Having net assets worth less than $6 million

If you are a small business, there are a number of concessions you may be able to apply for, including:

• 50 per cent capital gains tax reduction: If you have owned your small business for more than 12 months, you may be eligible for this deduction.
• 50 per cent active asset capital gains tax reduction: An active asset is an asset that has been in use for more than half the time that a business owner has owned them. A business clearly falls into that category, so falls into the eligibility for the 50 per cent active asset capital gains tax reduction.
• 15-year capital gains tax exemption: If you are over 55 and have owned the business for over 15 years, you may be eligible for a complete exemption if you are selling to retire.
• Retirement exemption: You can ignore up to $500,000 of the capital gains tax incurred if you are retiring. If you are under 55, you must place the capital gain amount into an allocated superannuation fund.
• Small business roll-over capital gains tax exemption: It may be possible to roll your capital gains tax over to a new asset. You even have two years to find the replacement asset.

Your lawyer and accountant can help you understand which of these you may be eligible for.

Asset sales or share sales

When you sell your business, you have the option of doing an asset or a shares sale:

• An asset sale means the sale of the entire business, including all physical assets.
• A shares sale is when you sell off enough company shares to move ownership to another business entity.

The best solution

You will always pay tax on a business sale, so the best way to make sure you don’t pay incorrectly is to seek professional help.

An experienced lawyer and accountant will help you understand all the options above so you can structure your business correctly to sell it. This may require several months or even years of planning but it will be worth it.

Don’t forget, there are many other steps involved with selling a business beyond being aware of tax. Your accountant and lawyer can help you ensure it is in great shape so you can sell quickly, easily and for a great price.

Need help to sell your business and maximise your profits? Contact LAL Law today.

Disclaimer: The information contained in this news post is general in nature and is intended to provide a general summary only and should not be relied on as a substitute for legal advice. Whilst the information is considered to be true and correct at the date of publication, changes in circumstances after the time of publication may impact upon the accuracy of the information.

Trademarking can be complex and it makes sense to complete the process with the help of a legal professional who understands how it all works.

Wondering how to trademark and why you need to? Here are some essential facts.

1. Why trademark?

Businesses brand themselves so they can be easily recognised and stand out from the competition. The trouble is it’s simple for someone to look at what you’re doing and then copy it.

Trademarking gives you ‘ownership’ of a phrase, logo, image, brand name or even a scent and prevents others from replicating what you do in order to make money.

For example, the phrase ‘I’M LOVIN’ IT’ is trademarked by McDonald’s. Paris Hilton trademarked the expression she became known for; “That’s hot”. This doesn’t mean nobody is allowed to say those words out loud… just that they can’t be used for commercial purposes. The lighting on the Eiffel Tower is trademarked so people can’t sell images of it lit up at night. And athletes are officially prevented from copying sprinter Usain Bolt’s signature victory pose.

If you forget to trademark, it’s possible for someone else to trademark your name/logo etc and then take action against you, even though you were the first to market.

2. Not everything can be trademarked

For example, you can’t trademark the word ‘lawyer’. It is far too broad and there are other operators who have the right to use this term.

When you go through the trademark process, you’ll first need to make sure what you want to trademark isn’t already protected from use by someone else. Many businesses have gone a long way down the branding path before they realise they can’t use the name or slogan they want.

With that being said, if you find a trademark similar to yours, you might still be able to claim it for yourself — if your business is very different. For example; Straight Line Graphic Design vs Straight Line Business Coaching. These businesses would not compete with each other and therefore may both be able to apply for a trademark around the wording ‘Straight Line’.

Facebook has trademarked the word ‘face’. However this only applies to social media companies that may be considered competitors.

3. Trademarks aren’t automatically approved

The trademark process involves application, review and approval. You may be asked to provide evidence that you require the trademark and you may need to supply a logo as well as a business name, plus additional information about your business and what you do.

There is also a period where other operators have the right to object to your trademark before it is finalised.

Because the process takes a while and involves a review process, there are costs involved. You’ll have to pay to apply for a trademark and to register it.

There are also costs involved with engaging a lawyer who knows how to trademark. However, when you consider that following the process correctly can save your business from being eclipsed by a competitor, it’s worth the money.

4. Trademarks expire

Businesses come and go and trademarks don’t last forever either. Generally, the validity of a trademark is ten years from approval.

5. Trademarks aren’t patents (or copyright)

Trademarks protect a name, logo, jingle etc that separates your brand from other operators and gives you the rights to use it exclusively.

A patent is more around a concept or invention. You may come up with a new computer program innovation and patent it so that nobody can take it to the market before you.

The term copyright covers the content your business creates. For example, if you write a guidebook, it counts as original work and can’t be recreated by others.

Need help to figure out how to trademark? The team at Legal Affairs Lounge will help you figure out if your application will be approved and streamline the experience so you can focus on other things. Reach out to us today.

Disclaimer: The content contained in this news post is general in nature and is intended to provide a general summary only and should not be relied on as a substitute for legal advice.

There are a number of debt recovery options available to businesses in Australia. The most appropriate option will depend on the amount of debt owed, the debtor’s financial circumstances and your own business’ needs and preferences.

Take a look at some of the initial steps you can take, as shared by Legal Affairs Lounge’ team of debt recovery lawyers on the Legal Affairs :

Negotiate with the debtor

First things first, reach out and have a discussion. There may be a solution you can find between the two of you.

If you are considering negotiating with a debtor yourself, there are a few things to keep in mind. It is important to be firm but fair and to have a clear understanding of your legal rights as well as the debtor’s financial circumstances.

It’s better to be assertive, not aggressive. It is against the law to use intimidation tactics or threaten someone because they owe you money.

Send a letter of demand

You should first try to negotiate a payment plan or settlement. You could perhaps have your accountant or bookkeeper reach out on your behalf, or phone the account manager yourself to try to recover the funds.

If this doesn’t get results, you may send a letter of demand. The following tips will help you to write an effective letter:

– Make sure you are clear about the amount of money that is owed. Include any interest and legal costs that may be due.

– Give the debtor a reasonable timeframe to pay the debt. This will depend on the amount of money owed and the debtor’s financial circumstances.

It makes sense to work with a Legal Affairs debt recovery lawyer when creating a letter of demand. If the client has the money but is holding onto it, a letter like this can prompt rapid payment.

Apply for a court order

For an amount less than $25,000 your next step is a visit to the Queensland Civil and Administration Tribunal (QCAT). This was established to help businesses recover money owed without losing it to legal support costs.

If the amount is more than $25,000, you will need to work with a lawyer to handle the matter via the Magistrates, District or Supreme court.

Use a debt collection agency

Struggling to recover debt on your own? Working with a debt collection agency may be the best option for you. Your debt collector will follow some of the steps above but because they are familiar with the process they can be much more efficient and persistent.

If you are considering taking action to recover a debt, you should get advice from a debt recovery lawyer first.

If the debtor is insolvent

Many people believe that a company is absolved of its debts if it becomes insolvent or the Directors file for bankruptcy. This is not the case. In fact, part of the process a company must undergo to restructure or become insolvent involves negotiating with creditors. The business may need to sell some of its assets in order to resolve its debts and while you may not get every cent you are owed, at least you can recover some of the money.

It makes sense to work with a debt recovery lawyer if one of your clients is in financial difficulty and going through a restructuring period because it will help you resolve the issue with less stress.

Avoid bad debts

As much as possible, ask your creditors to pay for your services or products upfront. This will save you from having to chase unpaid funds.

In addition to this, make sure you have a clear contract in place or have your clients agree to terms and conditions in writing so bills are not disputed and you have a clear path to a legal claim.

Need help to recover business debts? Reach out to the Legal Affairs debt recovery lawyers at Legal Affairs Lounge today.

However, starting and operating a business can be complicated. Many people find they have bitten off more than they can chew, especially when it comes to paying taxes.

If you are behind on tax obligations such as filing your BAS, paying GST, paying your staff super and handing over PAYG tax, things can catch up with you pretty quickly. What many business owners don’t realise is that the Australian Tax Office has the option to recover unpaid tax dollars from you personally.

The ATO will start the process to recover money owed by sending you a Director Penalty Notice.

What is a Director Penalty Notice?

A Director Penalty Notice (DPN) is a notice from the ATO that is sent to the director if a business has overdue tax bills (usually around three months after the due date has come and gone), or if Business Activity Statements (BAS) have not been filed on time.

The notice will outline the unpaid amounts and explain the options available to resolve the matter.

The DPN will have a date on it and will outline how long you have to pay the money. It may make you immediately personally liable (this is known as a lockdown DPN) or give you a set time period (usually 21 days) to satisfy the requirements of the notice before you become personally liable.

It’s worth noting that a Director Penalty Notice will be valid from the date of delivery to your registered business or residential address, even if you have recently moved.

You can still receive a DPN if you have left your position as director of a company. An incoming director who has been in the role for more than 30 days may also receive this type of notice.

One of the reasons DPNs exist is to prevent company directors from failing to meet their tax payment and reporting obligations, then dissolving the company and walking away without being personally liable.

What to do if you receive a DPN

If one of these notices makes its way to you, generally your options include the following:

• Pay off the debt in full
• Pay off the debt in instalments within the allocated time frame
• Put the company into administration or liquidation so you can find a way to recover the unpaid money
• Work with a specialist to restructure your business
• Share a valid defence that explains why you should not be liable for the business’s tax debts

If you fail to do any of the above, the amounts the business owes will fall to you personally to repay.

Of course, the easiest solution is to complete your reporting obligations and pay off your debts. If the DPN has been issued because you lost track of time and didn’t pay your bills, you could quickly resolve it by transferring the funds to the ATO. You can work with your accountant and bookkeeper to find the money, or potentially borrow funds to cover the costs, if you are certain you can handle the additional debt.

It gets more complicated when the money is not available to pay off the amounts owing. This is when you will need the help of a legal professional who will either:

• Help you to put your company into administration
• Help with a restructure so you can pay your debts
• Help you confirm that you did in fact take reasonable steps to avoid the situation
• Help you confirm that the reason for not lodging or failing to pay was due to illness or other unavoidable circumstances

Get support to resolve your DPN

The last thing you want is to be personally liable for your business’s GST, superannuation and PAYG debts as it can result in bankruptcy and a great deal of stress for your family.

Once you receive a DPN, you need to take action very quickly. Those 21 days can go very quickly and result in additional problems such as the ATO commencing court proceedings against you to recover the money.

One of the best things to do is immediately call a lawyer who specialises in areas including business, restructuring, bankruptcy and insolvency. This professional will be able to help you figure out the best way forward.

Before you get in touch with your lawyer, do your best to find records of your company’s recent tax payments and evidence of your current financial position. Then you can work together to resolve the situation.

Need help to resolve a Director Penalty Notice? If you’re on the Legal Affairs , contact Legal Affairs Lounge today.

What was originally used by individuals for personal use has now expanded to use by businesses to advertise – and often with great results.

However, social media should always be used with caution. You probably know about stranger danger already, but what about the repercussions of social media defamation?

Want to know why your business should have a social media policy?

Find out with the Legal Affairs defamation lawyers at Legal Affairs Lounge by reading on.

What is a social media policy?

A social media policy is loosely defined as a clear and concise document considered as part of the businesses employment and human resources policies.

Within it, employee responsibilities are outlined, which must be followed when dealing with social media. This includes inside and outside of business hours, for business-related social media posts and comments, and also employee’s personal social media activities accessible by the public.

Both individuals and companies alike have faced the repercussions of unsavoury social media activities. Contrary to popular belief, we all can’t hide behind our computer screens or mobile devices, especially when a potential defamation case is on the cards.

The main goals of a social media policy

There are four main goals of any good and solid social media policy.

What are they?

1. To educate employees

Employees must be made aware of the reality of legal and security risks associated with social media usage. A good social media policy will outline best practices to protect themselves and their employer/the company.

Thinking before posting should be stressed which includes but isn’t limited to avoiding confidentiality breaches, posting insensitive comments and conflicts of interest.

2. Protect employees

A social media policy not only protects a business’s integrity and reputation but can do the same for employees. Talk to your business lawyer about how this policy can protect employees from online bullying, harassment and potential defamation.

3. Protect your company from litigation

A social media policy provides the justification needed to dismiss an employee for improper social media use, while minimising legal risks for the business.

4. Protect the company brand

Employees should not post, like or comment online in a way that negatively impacts their company’s brand. A social media policy clearly defines the consequences of employees doing just that.

Make sure each employee as read and understood your company’s social media policy and can access it at any time. Your local, trusted business lawyer is able to devise and help you implement a clearly defined social media policy.

Need help with social media defamation?

If you believe someone is defaming you and/or your business, or you’re accused of doing likewise to someone else – you need the expert guidance of a defamation lawyer.

Legal Affairs Lounge have the professional expertise and experience in handling these situations whether it’s social media defamation, civil defamation or defamation of character.

Looking for a defamation lawyer on the Legal Affairs ?

Contact Legal Affairs Lounge today for proactive, professional legal services which encompass social media defamation, civil defamation and defamation of character.

Disclaimer: The content contained in this news post is general in nature and is intended to provide a general summary only and should not be relied on as a substitute for legal advice.