Resources
FAQ’s
I recently bought a business but the vendor refuses to handover control of the Facebook page used by the business. What can I do about it?
It is unusual for a Standard Contract for the sale of businesses to cover this. Your lawyer should have included a Special Condition requiring the vendors to make you an administrator of the Facebook page so you could then remove them and take control yourself.
I’m setting up a contract to employ subcontractors. Do I have a duty of care to explain everything to the subbie who is going to do the work?
You have no duty to explain the contract to the subcontractor. In fact, it would be better if you let the contract to speak for itself. If you say something to the subcontractor which is different from what is in the actual written document, that may be relied upon by the subcontractor to bring a claim against you.
One of my employees repeatedly turned up at work under the influence of drugs and I want to sack him. How am I placed?
You could have and should have sacked him without notice for “serious misconduct” when he turned up under the influence of drugs, provided you had evidence (such as statements from fellow workers) that he was under the influence. Under Regulation 1.07 of the Fair Work Regulations 2009, serious misconduct includes an employee being intoxicated at work or under the influence of drugs. The employee is only entitled to outstanding wages, accrued annual leave and long service leave (if applicable) upon termination.
I had a software developer create a website for me. I now want to change the website but the developer is telling me I can’t change it without his consent. He wants to charge me a fee, even if I get the changes made by someone else. Do I have to pay him?
Unless your contract with the developer says something different, the general law is that the copyright in the website is owned by the person who created it. There is an implied right for you to use the material for the purpose it was created. This implied right does not however give you the right to vary the material. In the circumstances, you may have to pay the developer for the right to change the site. The moral of the story is that when negotiating with anyone with respect to the creation of intellectual property (such as websites), make sure the contract spells out who the owner of the intellectual property will be.
The contract I have been asked to sign by the builder, in a section about materials to be installed, says that, “title passes on delivery”. Shouldn’t title pass only when they pay me?
Yes. Also, you probably couldn’t pass legal title on delivery even if you wanted to. Your contract with your supplier will almost certainly contain a clause to the effect that title in the materials you buy from them does not pass to you until you actually pay for them. Change the contract to read that title passes upon payment by the builder for the materials.
I want to put some of my guys off the payroll and onto contracts. A lot of other contractors do this too but my accountant says that I have to be careful. Careful of what?
If you treat someone who is really an employee as a contractor there could be significant adverse tax, superannuation and Work Cover consequences for you. The tax office has been known to target this area for auditing. Make sure you take proper legal advice and document the arrangements of a contractor who might otherwise be considered an employee or you could end up in quite some trouble.
I got one of my office girls to collect the mail, driving her own car. She had an accident and smashed up the front of a shop. Now the shop owner is trying to sue me. Surely they can’t do that?
Sounds like your worker didn’t have third party property damage insurance on their car. Because she was an employee engaged on business for you, you will be liable for all loss suffered as a result of your worker’s negligence. Can I suggest you don’t let your employees drive their own cars because you can never know if insurance is in place or not.
What is an Enduring Power of Attorney – Financial?
This is the most important and useful Power of Attorney as it empowers another person (your Attorney) to sign financial & legal documents on your behalf. This Power of Attorney continues even if the Donor becomes mentally incapacitated. So for example, a family member could use it to look after your finances if you have a stroke or develop Alzheimer’s. Amongst other things it covers:
- Banking (eg withdrawing or depositing money)
- Real Estate transactions (eg signing documents necessary to buy or sell a house)
- Stock market transactions
There are some limitations on the use of a Power of Attorney. For example, it does not enable the Attorney to draw up or modify a Will on your behalf. Nor does it authorise your Attorney to make decisions about medical treatment. Everyone should have an Enduring Financial Power of Attorney in case they become incapacitated, even if for a short time.
What is an Enduring Guardianship Power of Attorney (Lifestyle)?
This enables someone to make health care and lifestyle decisions for you in the event you suffer a disability (eg an intellectual impairment or physical disability) and are unable to make reasonable judgments. These decisions include:
- Where you live, including consent to enter a nursing home or hostel
- The health care you receive including type of treatment, surgery or medication
- The people who can associate with you, including visitors.
You can specify the powers you give your guardian and place conditions on the decisions they can make.
The guardian has the responsibility to protect a person’s interests but does not have the obligation to care for the needs of that person. The appointment is made in a document that requires two witnesses to the appointment and two witnesses to the statement of acceptance of the appointment.
All Powers of Attorney become invalid upon death. The Will then takes over, providing the power to the executor to take care of the deceased estate.
What is an Enduring Medical Power of Attorney?
This enables someone to make medical treatment decisions when the Donor becomes incompetent (eg if he or she is unconscious or in a state of shock). A Medical Power of Attorney covers a narrower range of powers than an Enduring Lifestyle Guardianship in that it does not cover lifestyle decisions. However if you appoint both, the Medical Power of Attorney will take precedence over the Enduring Lifestyle Guardian when it comes to medical treatment decisions.
All Powers of Attorney become invalid upon death. The Will then takes over, providing the power to the executor to take care of the deceased estate.
How do you terminate a Power of Attorney?
All Powers of Attorney ceases with the death of the Donor. An enduring Power of Attorney will continue when the Donor is incapable of making decisions through incapacity. A General Power of Attorney (non-enduring) will cease upon the incapacity of the Donor but an enduring Power of Attorney cannot be revoked by the Donor if the Donor becomes incapacitated.
The Donor can terminate a Power of Attorney (including an enduring Power of Attorney) by advising the person appointed, preferably in writing, that the appointment has ceased. It is preferable to ask for the return of the Power and to destroy both the original and any copies.
A document revoking a power of attorney must state:
- the name of the donor (the name of the attorney is optional)
- the date of the power of attorney if not registered
- the registered number of the power of attorney if registered
- the date of the revocation and
- the words “hereby revoke”.
Appointing an Enduring Power of Attorney
This is required to be done in writing and must be witnessed by two persons, one being capable of witnessing statutory declarations. Financial and Guardianship Powers of Attorney must be accepted by the persons appointed and their signatures each witnessed by two witnesses, one being capable of witnessing statutory declarations. A general Power of Attorney does not require a witness.
Enduring Powers of Attorney remain effective when the Donor loses capacity to make decisions.
How do I retire / resign as a director of a small business?
If retirement as a director is your decision, you must submit a letter of resignation to the other directors and / or the Secretary of the company. To ensure your resignation is recorded appropriately you should lodge your letter with the appropriate form on the ASIC website (or by mail). This must be done within 28 days of the resignation letter. You may lodge the form but if you do not, the company must.
Late registration of the ASIC form (after 28 days) will incur a late fee. Lodgement of the form after 56 days will mean the recorded retirement date will be the date of the eventual lodgement.
The important message here is that if your resignation as a director is time critical, LODGE THE ASIC FORM (with a copy of your resignation letter) YOURSELF.
How do I retire / resign as a director of a small business?
If retirement as a director is your decision, you must submit a letter of resignation to the other directors and / or the Secretary of the company. To ensure your resignation is recorded appropriately you should lodge your letter with the appropriate form on the ASIC website (or by mail). This must be done within 28 days of the resignation letter. You may lodge the form but if you do not, the company must.
Late registration of the ASIC form (after 28 days) will incur a late fee. Lodgement of the form after 56 days will mean the recorded retirement date will be the date of the eventual lodgement.
The important message here is that if your resignation as a director is time critical, LODGE THE ASIC FORM (with a copy of your resignation letter) YOURSELF.
Links
These links are provided for your information and assistance:
Associations Incorporation Reform Act
Victorian Civil and Administrative Tribunal
Australian Securities and Investments Commission
Victorian Small Business Commissioner
Governance Institute of Australia