Charities - A Growth Industry

by tony 1. October 2009 08:04

Times like these are ripe for starting up a charity.

This is thebrighter side of a financial crisis where redundancy and not-so-voluntaryretirement are becoming commonplace and demands for charitable services areincreasing.

Establishing a charity can be quite straightforward as long as thedominant purpose of the charity is for the benefit of the community and ischaritable in nature.  Education,health, science, religion, environment, social and community welfare are someexamples of well-accepted charitable purposes.

Eligibility

How does an organisation qualify for formal recognition as a charity? Inaddition to showing a dominant charitable purpose, the other eligibilitycriteria include:

·       being an appropriately formed institution,fund, foundation, trust or association. The organisation’s rules can be ofvital importance.

·       being non-profit. If the charity ispermitted to pay or make available any portion of its property or fundraising forthe benefit of any trustee or member, it will not qualify.

·       obtaining an ABN.

·       fulfilling the criteria forobtaining Tax Concession, Income Tax Exempt or Deductible Gift Recipient statusfrom the Australian Taxation Office (ATO).

Benefits 

Obtaining Deductible Gift Recipient status is one of the most popularbenefits. This essentially means that a donation to the charity will entitlethe donor to an equivalent tax deduction. Clearly, this is a significantinducement for fundraising.  Once acharitable  organisation has IncomeTax Exempt status, it will be relieved of liability for tax or GST on theincome it raises and generates.

Additionally, reduced start-up fees are charged for companiesestablished for a charitable purpose. Charities can also take advantage ofexceptions to the company naming provisions under corporate laws.

Ultimately, it is up to the law to decide whether a charity is eligiblefor the benefits. Assessing what structure best suits the organisation’sobjectives, choosing trustees or directors, settling rules of engagement, fundraisingand other legal formalities all need to be addressed within the overarchingregulatory framework.  Reconcilingthe initial noble motivation for forming the charity with the laws that governcharities can often be a challenge.

 

Small Business - GO OR NO

by kyle 21. August 2009 07:45
Making a Strategic Entry into Small Business
August, 2009

In these difficult economic times, potential small business owners can face greater problems and barriers to starting their dream. From raising capital to securing customers, 2009 has been a challenging year. In this context it is important to make the most strategic and practical entry into the small business world.

Small businesses have a high rate of failure. It is particularly important to plan your business venture to increase your likelihood of success. When planning your new business, it is important to seek strategic legal advice as early as possible.

A big decision to make at the outset is whether to start from scratch or to acquire an existing business. Both options have their pros and cons.

With a start up, there are considerable challenges. Significantly, your business will have no previous presence in the market in which you intend to operate. In such circumstances, you should both budget for initial advertising costs and plan for modest sales of your goods or services in the initial months.

On the plus side, if you start your own business it may be easier to control both initial and ongoing operating costs. The costs of incorporation, accounting and general administration can be modest. You can plan to increase your outlays over time.

Alternatively, there may be opportunities to take over the operation of an existing business. This is commonplace in the retail sector. Buying an existing business can be attractive because it comes with an existing customer base, suppliers, staff, equipment and goodwill associated with the name of the business.

Buying an existing business can be accomplished through an asset purchase or a share purchase. A solicitor can provide you with advice as to which option is best suited to your needs.

There will always be some surprise when you buy an existing business, although some risks can be minimised through thorough research and a carefully drafted contract for the business purchase. At this point, the experience of a lawyer who practices in commercial matters can be invaluable. Many new small business owners get in too deep at the start due either to inadequate planning or poor decision making.

Other considerations that should loom large include a review of the commercial lease for the business premises, the taxation of the business, any existing debts of the business and the commercial relationships the business has in place. For example, if the existing business has a supply agreement on favourable terms, you should not simply assume that that contract will continue in its present form after you acquire the business. It can be helpful to talk to a wide range of players in an industry including suppliers and distributors of material.

Running your own business can be an exciting and fulfilling venture but it is most important to realise that you need not go it alone in turning your idea into a reality. Industry contacts and professional advice can ease the way to a new phase of your working life.

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Farming and the Law

by tony 1. July 2009 03:59
My recent work in Agribusiness has reinforced my belief in the many unsung heroes of our regional economies – usually located in the hinterland - quietly going about their business in a competent and sustainable way.  My own region’s commercial focus has concentrated for too long on tourism, property and construction.  Others are all in a lather about mining and “new economy” business.  Agribusiness and other “traditional” value adding industries have been taken for granted and left to fend for themselves.

However, anyone involved competitively in modern agribusiness, whether primary or secondary, knows it is anything but traditional.  Survival depends not just on the most modern technology and production methods.  It also requires a commercial grasp of the detailed interplay between grower, marketer, packer, wholesaler, distributor, freight handler and retailer, as well as awareness of the complexities of regional, state and broader regulation affecting intellectual property, treatment, carriage, processing and marketing of produce.

Sajen legal understands this.  We are a regional legal firm based in Maroochydore (through choice rather than necessity).  Our specialty is business – in fact, that’s all we do.

For the past 16 years, we have helped numerous participants involved in regional agribusiness, ranging between growers, grower/marketer co-operatives, distributors, logistics networks and processors and manufacturers.  We have been involved with several regional agricultural co-operatives and industry clusters from their inception. 

We can help with a variety of agribusiness issues such as:

(a) grower agreements;
(b) production and manufacturing arrangements;
(c) plant breeders rights, brand and other intellectual property matters;
(d) labour concerns;
(e) supply chain strategies;
(f) business ownership and operations structures;
(g) share farming, contract and property law; and
(h) dispute resolution.
From a more personal perspective, Sajen assists with:

(a) business and farm family succession planning; and
(b) restructuring and asset protection.  
 
Our lawyers are regularly involved in general and complex commercial and corporate transactions. We also regularly represent clients in disputes spanning a range of industries and sectors across Australia, providing advice to businesses as diverse as media companies, publishers, manufacturers, national distributors, charities and the public sector.

In addition to Agribusiness, we provide legal and business consulting services to the following industries:

(a) Information and Communication Technology;
(b) Manufacture, Distribution and Trade;
(c) Innovation and Creative Industries;
(d) Tourism and Hospitality;
(e) Building and Construction; and
(f) Mining and Resources.
 
Sajen legal provides a viable and cost effective alternative to large and medium size law firms.  We seek to provide a preventative advice, seeking to resolve issues become they get out of hand.

We are committed to the region, its people and their businesses.  Throughout the year, the partners and staff at Sajen legal provide lectures to Sunshine Coast University students on intellectual property, industrial relations, trusts, business structures, export and offshore contracts and insolvency.  We also provide ongoing education seminar material to other lawyers, accountants, financial planners and town planners on legal and associated matters within our core areas of specialty. 

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