Tag: australia legal

Sheltons Group Legal – an Australian law firm based in London

Understanding the Proposed Changes to Australia’s Foreign Investment Framework

Earlier this year, Australia’s Treasurer, Dr Jim Chalmers, announced significant changes to Australia’s foreign investment framework with an aim to enhance national security and economic resilience.

Foreign businesses and investors planning to invest or establish commercial operations within Australia may require prior approval from the Australian Treasury. The Australian Treasury is advised by the Foreign Investment Review Board (FIRB), which examines and assesses investment proposals. As a foreign business or investor, depending on the nature of the business or investment, you may be required to submit your business or investment proposal to FIRB for assessment.

There are currently no proposed legislative changes, rather the changes will be implemented via streamlining Treasury processes, amending internal policies, and increasing resources.

We outline below the key points from Treasurer Jim Chalmers’ announcement. The Australian Government’s proposal intends to implement the following changes:

  • Increasing the Treasury’s capacity to efficiently assess complicated or high-risk proposals by dedicating more resources to the teams which assess such proposals;
  • Increasing scrutiny on sectors where there are supply chain resilience concerns, where there is a need to protect sensitive data, or where there may be a concentration of ownership concerns;
  • Streamlining processes to provide faster approvals for known investors who are investing in non-sensitive sectors and who have a good compliance record;
  • Ensuring foreign investors pay the correct amount of tax by continuing to update guidance about tax arrangements that will attract greater scrutiny (such as those which are overly complex); and,
  • Enhancing compliance and monitoring to enforce conditions on foreign investments by increasing resources to compliance teams.

The good news from this announcement is that Treasury is looking to increase efficiency and reduce assessment times for investors engaging in low-risk investments.

What does this mean for your business?

The proposed changes may result in increased regulatory compliance for foreign businesses that plan to invest or operate in Australia. If your business is planning to invest or establish commercial operations within Australia, it is important that you understand Australia’s regulatory framework prior to investing.

For further details, you can refer to the full announcements and policy documents on the Treasury’s official website here: https://ministers.treasury.gov.au/ministers/jim-chalmers-2022/media-releases/reforms-strengthen-australias-foreign-investment

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If you’re looking to invest or establish operations in Australia, then feel free to let our London-based Australian qualified lawyers know and we can discuss how we can assist.

Courtney Gleeson
Lawyer
Sheltons Group Legal (London and Sydney)
C.Gleeson@SheltonsGroup.com

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Sheltons Group Legal – an Australian law firm based in London

The Australian Fair Work Commission has determined that Australia-wide increases are to apply to the national minimum wage as well as to Modern Award minimum wages. The increases took effect from 1 July 2024.

Each year, the Fair Work Commission (‘FWC’) makes an order that covers subjects including the national minimum wage after considering factors relevant to the economy, employers, and employees.

Accordingly, the FWC’s Annual Wage Review 2023-24 announced that the national minimum wage and Modern Award minimum wages would be increased by 3.75%.

As a result, the national minimum wage has increased from AUD 882.80 to AUD 915.90 per week for full time employees (i.e. employees who work an average of 38 hours each week) – meaning the hourly minimum wage is now AUD 24.10. The Modern Award minimum wage increase means that pay rates above AUD 915.90 per week have increased by 3.75% per week.

Modern Awards are industry or occupation specific and apply to those performing work covered by the Award. As such, it is important to be aware that different minimum wage rates apply across different Modern Awards.

Approximately 2.6 million employees across Australia are expected to receive the minimum wage increases. It is therefore essential that all employers take note of the increases to ensure each employee is being paid at or above the new minimum rates. Annualised salaries must be sufficient to absorb all statutory entitlements.

If you would like further information about the Australian wage increases, or assistance in determining which Modern Award applies to your employees – please contact us.

Courtney Gleeson
Lawyer
Sheltons Group Legal (London and Sydney)
C.Gleeson@SheltonsGroup.com

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Sheltons Group Legal – an Australian law firm based in London

Investing in Australia?

Know your obligations under the new Register of Foreign Ownership of Australian Assets

From 1 July 2023, foreign investors have been required to notify the newly established Register of Foreign Ownership of Australian Assets (the Register) if they acquire interests in particular Australian based assets. Notice must also be given if an Australian entity, that held an interest prior to 1 July 2023, becomes foreign owned after such date.

The information stored on the Register is not publicly available, and its purpose is to give the Australian government greater visibility of foreign ownership of Australian assets.

The following are some of the types of interests which will require a foreign investor to give notice to the Register:

  • an interest in Australian land which is a freehold interest, a long-term lease (where the term including any options exceeds 5 years), or an interest in an exploration tenement
  • an interest in a share or unit of an Australian land corporation or trust or an interest in a share of the trustee of an Australian land trust
  • a registerable water interest, and
  • an equitable interest in a long-term lease or licence of agricultural land.

Generally, a foreign investor must give notice to the Register within 30 days after they acquire an interest, or if there is a change of at least 5% in the interest of an entity.

Civil penalties will apply if an entity fails to give notice to the Register within the relevant timeframes. Additionally, foreign investors may have ongoing notification obligations depending on the nature of the asset.

What does this mean for your business?

The implementation of the Register increases regulatory compliance for foreign businesses that plan to invest and operate in Australia.

It will mean that your internal procedures will need to be updated, especially if you are a business that undertakes a broad range of commercial activities within Australia.

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If you’re looking to invest or establish operations in Australia, or if you’re an Australian entity looking to receive foreign investment, then feel free to let our London-based Australian qualified lawyers know and we can discuss how we can assist.

Courtney Gleeson
Lawyer
Sheltons Group Legal (London and Sydney)
C.Gleeson@SheltonsGroup.com

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Sheltons Group Legal – an Australian law firm based in London

Entering the Australian market is a different ballgame – when you compare the corporate requirements of your head office or company location to that of Australia, there are likely to be considerable differences in how a company is required to operate!

Australian company law is an area our clients often have difficulty navigating, usually because they simply don’t have time to become well versed in it when their time is dedicated to running a business. However, corporate compliance is a really important area for company directors and businesses to be aware of. A lack of awareness can lead to liabilities, including personal liabilities, penalties, and generally compromising situations for businesses in the Australian marketplace.

What is corporate compliance?

The Corporations Act 2001 (Cth) (‘the Act’) is the primary Australian legislation that regulates compliance obligations and standards for both Australian companies and foreign companies that are trading in Australia. Among many matters, the Act prescribes the ongoing legal obligations required of all companies registered under it. Some key obligations include: maintenance of corporate registers; documenting various company decisions, and ensuring shareholder approval is obtained; annual declarations of solvency; filing financial reports; and notifying the public record keeper of particular changes to a company.

Many clients don’t realise that company directors have a duty to ensure that the company they are involved with complies with statutory requirements. Sheltons Group has been working with clients to ensure their company compliance for decades now. We’ve developed streamlined operations to help Australian companies easily meet company law requirements, every day. Sheltons Group Legal can take care of your corporate compliance, allowing you to maximise time concentrating on business activities.

Is your Australian company legally compliant?

If you have any questions about how to ensure your Australian company and business operations maintain good standing in Australia – we welcome you to contact us! We are glad to discuss matters which relate to your company specifically, or in general, and will work with you to ensure your company is legally compliant.

Courtney Gleeson
Lawyer
Sheltons Group Legal (London and Sydney)
C.Gleeson@SheltonsGroup.com

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Sheltons Group Legal – an Australian law firm based in London

Is your business about to enter into an agreement or contract governed by Australian law?

It is really imperative that you are aware of the key terms and obligations that you’re committing to – and that you understand if what you are agreeing to is standard practice.

It is often the case that laws governing certain commercial arrangements in Australia are significantly different from those ordinary in the jurisdiction you are familiar with. Standard agreements that you may regularly adapt and use for business in other countries may not be suitable or enforceable in Australia.

Australian shareholder agreements, business acquisition or sale documentation, commercial property leases and agreements relating to the supply of products or services with others may be governed by national legislation, or by state-based laws and regulations depending on where the contracting parties might physically be located or where services are generated.

Sheltons Group Legal can review and advise on agreement terms before you proceed with any commitments.

Typically, most commercial contracts and agreements are favourable to the party that has prepared the governing document. It is important not to simply assume the terms and obligations have been included in a fair and equal manner.

Businesses caught in a litigious event usually find themselves in such situations by failing to record the terms of an agreement correctly or because of a laid back approach to entering into an agreement. Having a clear and concise written agreement in place should not just be a business consideration – it’s a must!

Sheltons Group Legal is able to assist with the preparation or review of any commercial agreements or contracts that your business might require. Having a written agreement in place documents the arrangements between the parties and ensures clarity for all. Clear articulation of the terms and obligations is crucial to avoid ambiguity and disagreements at a later date.

Courtney Gleeson
Lawyer
Sheltons Group Legal (London and Sydney)
C.Gleeson@SheltonsGroup.com

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Sheltons Group Legal – an Australian law firm based in London

Until recent legislative changes to the Corporations Act 2001 (Cth), a director’s resignation was taken to be effective from the date confirmed in a relevant resolution, or simply when the director provided written notice of their resignation.

The ‘date of effect’ might not be what the individual director OR company understands it to be

Previously, the date included on a notice of resignation automatically meant the end of liability, the end of director duties being owed to the company by that individual, and the end of that individual having authority to represent the company. However, a change in the legislation means that carrying out the correct steps with respect to a resignation are now more important than ever. Not following the necessary steps can cause burdensome complications for both the company and the individual seeking to resign from their director post.

Where notification of a director resignation is not received by ASIC (Australia’s corporate regulator) within 28 days from the date that the resignation is proposed to have effect from, the legal and actual date of effect will be the date on which ASIC is notified and NOT the date specified in a notice of resignation or company resolution.

Significance of the ‘date of effect’

What is the date of effect? The date of effect refers to the date on which an individual is legally ceased from their role as director.

If ASIC is not correctly notified within the prescribed timeframe, the individual who purports to have resigned from the position of director will legally still be a director of the company until such time as ASIC is notified. Any attempt to significantly back date the date of effect recorded with ASIC is terribly complicated and can also require a Court Order, which will only be granted in exceptional circumstances.

The importance of correct director resignations

If a company is of the view that a director has resigned, or the company has removed a director, but ASIC has not been duly informed within the 28 day time period – that individual is legally still a company director until ASIC is notified. At all times when an individual is a company director, they are not only bound to directors’ duties and may in instances be held personally liable, but they have authority to represent the company, enter into contracts/agreements and make other important decisions representing the company. As you might imagine, this can cause concern and confusion for many parties and doesn’t serve your business’ reputation well from a customer’s perspective.

To avoid unnecessary stress and expense in rectifying a failed director resignation or removal, please contact us to assist whenever there is a change in your company’s directorship.

Courtney Gleeson
Lawyer
Sheltons Group Legal (London and Sydney)
C.Gleeson@SheltonsGroup.com

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