Shiff & Company Lawyers Melbourne

What We're Up To

09
Dec 2015

Highlights of the new innovation policy

By David Jackson

The Top Five Ideas That Will Fuel Malcolm Turnbull’s ‘Ideas Boom’ and How You Can Take Advantage of Them

With a lot of things still up in the air, it is going to take some time for the Federal Government’s newly announced innovation policy reforms to materialise on the ground. However, there are still things that start-ups and innovative entrepreneurs can do today to prepare themselves to become ‘investment ready’ in preparation for what is hoped will be a new era in Australian business culture.

Here’s our run down on our favourite five best ideas that were part of Monday’s big ‘Ideas Boom’ announcement and what you need to do to take advantage of them:

5: Relaxed Insolvency rules are expected to be contentious as it remains uncertain how, for example, the ‘safe harbour’ provisions will affect creditor entitlements and in what circumstances default termination rights in service contracts will be set aside. Banks, among others, will have vested interests in these proposals. However if implemented these measures should give eligible companies a better chance of working themselves out of financial distress, or at least bouncing back from it quickly, rather than having to shut the doors.

4: Employee Share Scheme reforms will allow companies to offer shares to their talent without having to disclose sensitive information to the public. As has been demonstrated in America, such schemes can be a valuable way for cash-poor start-ups to incentivise employees by giving them a slice of the pie. Business owners will need to be strategic in how these schemes are enacted so as to not unduly diminish the pot of equity available to other, external investors down the track.

3: New Entrepreneur Visas will be aimed at coaxing talented entrepreneurs to set up shop in Australia and in doing so create new local jobs. Immigrants are often highly motivated and willing to bootstrap their business dreams with a lot of hard work; and will also bring with them their personal and professional networks along with capital from overseas. As with other special visa categories, immigrants would conceivably be expected to satisfy numerous criteria in terms of proving their skills and a having financial backing for a business plan.

2: Crowd Sourced Equity Crowd Funding (CSEF) which allows companies to sell shares using a crowd funding platform could be revolutionary in helping those starting off with only a great idea to raise capital. Already introduced in other places around the world (including New Zealand), CSEF been on the agenda for a while in Australia. A bill to facilitate CSEF has recently been introduced to the Federal Parliament but an apparent shortfall of the proposed legislation is that it requires the company to list (i.e. go public). Unless the bill is amended to remove that requirement, take-up is likely to limited given the fairly onerous disclosure and other obligations that apply to public companies. CSEF is quickly evolving and will perhaps be one of the first reforms to hit the ground, so watch this space.

1: Two different tax breaks for angel investors who invest in companies less than 3 years old, with expenses less than $1M and income less than $200k will mean more potential upside for investors to take a punt on start-ups. First, angel investors who invest in eligible start-ups will be able to reduce their income tax liabilities by 20% up to a limit of $200k per year. Since it’s a tax break for the investor, not the start-up, it’s a tax discount that can be claimed even if the business doesn’t make any money. The second tax break involves a 10 year exemption on Capital Tax Gains for investments held for more than three years. The details remain scant on this one, but it should mean that investors won’t pay tax when they sell their investment in a successful start-up after three years to realise a profit. For entrepreneurs to take advantage of these incentives, they have to first make themselves attractive to sophisticated high net worth investors who will be motivated by these tax breaks.

How to Become 'Investment Ready'

Rather than supporting start-ups directly, the proposed reforms have a strong focus on incentivising investment in start-ups. The challenge for entrepreneurs will remain knowing how to present themselves and their ideas as attractive propositions. Great innovative business concepts aside, this means getting the basics right: adopting optimal corporate structures, documenting key contracts, protecting IP and other intangible rights, writing believable business plans, and retaining talent.

 

The team at Shiff and Co, with our demonstrated focus on servicing the creative and entrepreneurial industries, is perfectly placed to assist and mentor start-ups through the often bumpy journey from bootstrapping an idea to the series A funding round, and (with a lot of hard work and a bit of luck) beyond. If you are wondering how to get your idea, small business, or start-up to the next stage contact one our team to see how we can help you become 'investment ready' now.

 

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31
Jul 2015

Car advertising backfires

By David Jackson

Highlighting the superiority of your product or service compared to a competitor’s equivalent can be a very effective form of advertising, particularly if done in a clever or humorous way – Apple’s campaign aimed at Microsoft is a good example: Apple campaign on Youtube. Also comparative advertising, if done properly, can enable consumers to make better informed decisions. 

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05
Jun 2015

Licensed trade marks - use them or lose them

By David Jackson

A recent case highlights some important issues for owners of registered trade marks who license the marks to third parties. In particular, the case impresses the need for owners to have and to exercise rights to monitor and control the licensee's use of the mark. Failure to do this over a period of time can, as this case shows, jeopardise the ongoing validity of a trade mark. 

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20
Mar 2015

Posting false information on your blog can be defamatory

By David Jackson

Blogs encourage and facilitate millions of people to publish their views on any topic they choose to readers around the world. However, many bloggers (and people who post comments on blogs) do not realise that they are subject to the same laws as mainstream media organisations are regarding the publication of false and damaging information, and that their liability can arise anywhere that their blog is viewed, including in other countries. 

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17
Mar 2015

The dangers of posting ‘intimate’ photographs without consent

By David Jackson

Posting intimate or explicit photographs of your ex-partner on the Internet can be unlawful and may expose you to substantial financial liability, as highlighted by a recent decision of the Supreme Court of Western Australia.[1] 

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19
Dec 2014

Patents for software and business methods – recent developments

By David Jackson

New business ventures often rely upon or arise from an inventive method for doing business or a new software program, or both. The viability and value of the business may depend on whether it can prevent competitors from using or emulating that method or software. 

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15
Nov 2014

Misleading conduct in the context of a franchise agreement

By David Jackson

Franchisors are obliged to provide prospective franchisees with certain information before entering into an agreement. The new Franchising Code of Conduct (the Code), which will take effect on 1 January 2015, makes some changes to the disclosure requirements (including in relation to online sales), but the information covered remains largely the same, dealing with issues such as litigation affecting the franchisor, details of existing franchisees, intellectual property and earnings and financial data. 

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16
May 2013

Estate Administration - A Family Matter

By Julia Adams

Administering even a fairly simple Estate may involve the Executor interacting with the Supreme Court, banks, VicRoads, Land Registry, Births, Deaths & Marriages, the Administration and Probate Act, Trust Accounts, Estate Agents, cleaners, valuers, perhaps a nursing home or retirement village, maybe a share broker or registry, accountants, the ATO, and likely a Superannuation Trustee (or two, or three).  

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