The area of Australian business law covers the following basic statutes
THE CORPORATIONS ACT 2001 (CTH)
- Legal person and limited liability company have separate legal personality to participate in litigation, own assets and incur debts.
- The liability of a shareholder for the debts of a limited liability company is limited to the amount of the shares subscribed by the individual. As long as the amount of the subscribed shares or stock has been paid, the shareholders are not liable for the debts of the company.
- The shareholders may be a body corporate or may consist of a single shareholder with a minimum registered capital of A$1.
- The number of shareholders in a private limited company is limited to less than 50 and the name of the company must be PTY.
- To form a public company (i.e. Public), a minimum of three directors and an appointed secretary who is resident in Australia are required, in addition to an auditor.
- The Articles of Association are also an essential part of the process.
- There are also prescribed procedures for the closure or winding up of a company.
- It is important to choose a suitable corporate structure. If a lawyer is considering this issue, limited liability is generally preferred. Entrepreneurs who want to form a company will generally consider it in terms of flexibility and taxation amount.
- The owners of a corporation are called shareholders. A director is a person who manages the company and may or may not be a shareholder. However, in the case of a privately held company, we recommend that shareholders who have invested in the company, even if they are not involved in the management or operation of the company, should have the right to read the accounts.
THE AUSTRALIA CONTRACT LAW
- The definition of contract is not only limited to written contracts, but also includes verbal agreements and text messages.
- Considerations are an integral part of the contractual structure.
- Exemptions are provided in the event of failure to perform, including force majeure, which prevents performance of the contract; and in the event of man-made breach of contract, the injured party is not required to continue the contract.
THE AUSTRALIAN CONSUMER LAW (ACL) IN THE COMPETITION AND CONSUMER ACT 2010
- Prohibits traders from engaging in misleading or deceptive practices in trade or commerce.
- The seller has the responsibility to ensure the quality of the goods.
- Prohibits unconscionable conduct (harsh, oppressive, and demanding behaviour).
- Unequal contract terms may be abolished.
- Prohibit unfair trade practices, such as Pyramid scheme.
- Establishment of a framework of rules for the security of goods and the establishment of national security standards.
- The quality of the goods that suffers serious damage (major failure) can be returned.
- The supplier refuses or fails to repair the defects of the goods within a reasonable period of time, the goods can be returned.
TRANSACTION CONTROL REGULATIONS
- Australia does not have a system of foreign exchange controls. Anti-money laundering measures are monitored through financial related transaction reporting and requirements. The Financial Transaction Reports Act 1988 (Cth) defines the types of transaction reports, procedures, and liability. It also establishes account-related requirements, the confidentiality of reporting information, and the responsibilities of financial intelligence agencies.
- Any cash transaction that exceeds $10,000.
- The entity responsible for reporting large cash transactions is known as a “Cash Dealer”. It includes the following entities: financial institutions, legal entities, insurers or insurance intermediaries, financial institutions engaged in securities business, trustees or administrators of trusts, persons who write, buy, sell or pay cheques or money orders, gold dealers, etc.
- Transfers of large amounts of cash into and out of Australia are reported to the financial regulators.
- When a lawyer is involved in a large cash transaction, the lawyer is responsible for submitting Cash Transaction Reports by Solicitors to AUSTRAC.
- Reports of International Funds Transfer Instructions. A funds transfer trader is a transmitter of outbound cross-border funds or a recipient of inbound funds. When such transactions are regularly conducted, reports must be submitted within 14 days of the receipt or transmission of the funds.
INTELLECTUAL PROPERTY
In Australia, intellectual property (IP) is protected by federal legislation and common law. Patents, trademarks, copyrights and designs are protected under federal law in all jurisdictions. IP Australia promotes a world-leading intellectual property system designed to encourage innovation and protect businesses that develop original intellectual property. Australia is also a signatory to a few international agreements that facilitate access to IP protection in many countries. We cover several key IP areas in our business:
TRADEMARKS
- Australia is a member of the Madrid Agreement Concerning the International Registration of Mark. Therefore, Australian trademark applicants can file an international application to many countries around the world based on their application in Australia.
- In addition to trademarks, businesses in Australia should consider registering domain names ending in “.au” that are associated with their trademarks and trade names to better protect their brands. Businesses should also ensure that key trademarks and trade names are registered in Australia. These registrations will ensure continued brand protection.
- In addition, due to the existence of trade names in Australia, when forming a franchise, the franchisor must ensure that the franchisee owns both the trademark and trade name.
PATENTS
- There are two types of patents in Australia: standard patents and innovation patents.
- The protection period of a standard patent is 20 years from the date of application and is generally used to protect high-level innovations. An innovation patent has a potential protection period of 8 years and is used for general innovation.
- An innovation patent is enforceable only after certification.
COPYRIGHT
- Australian copyright law encourages businesses to protect original works of authorship by providing protection for them. Under the Copyright Act 1968 (Cth), original artistic, literary, dramatic, musical and other works are automatically protected by copyright (certain eligibility conditions are met). In Australia, there is no requirement (or ability) to register a copyright with IP Australia. The range of copyrighted material is very broad and includes computer programs, diagrams, videos, broadcasts, training manuals, price lists and product manuals.
- During the term of copyright protection, the Copyright Act 1968 (Cth) also gives authors of most copyrighted works certain personal rights in relation to their works. Personal rights include the right to attribute a work, the right to resist false attribution, and the right to protect a work from disparaging treatment.
- Industrial designs are protected against copying under the Designs Act 2003 (Cth), which gives protection to the overall appearance of a product, including its shape, form, pattern and decoration, provided the design is new and distinct (based on a design previously used in Australia or published in the world). Protection is granted for a period of 10 years, renewable for a further 10 years on payment of a renewal fee.
- IP Australia conducts a formal examination of new design applications. The design is not valid until the requested certificate of examination has been issued.
TRADE SECRETS
- Confidential information or trade secrets, such as secret technology or processes, have commercial value.
- Protection will take the form of a confidentiality policy implemented through the information and supplemented by contractual or equitable confidentiality agreements with obligations.
