Register for our FREE PPSA Seminar now!

Late last year we advised that we would be holding a Personal Property Securities Act (PPSA) Seminar for our clients and business associates to learn more about this new legislation.

Under the PPSA, lessors of assets will find themselves particularly at risk in a way that they have not faced previously.  If your business leases a piece of equipment to a customer who then becomes insolvent, you may find yourself in a position where you lose your rights in that equipment to a liquidator or trustee if you have not registered your interest on the Register.

The implications of the PPSA will need to be investigated by any individual or business providing or obtaining credit.

With the legislation rolling out today, we have put together a comprehensive overview of the Act and some resources to assist our clients in being PPSA ready.

WHEN: WEDNESDAY 8 FEBRUARY, 2012 

COMMENCING AT 6.00PM

WHERE:  SKY BAR – QUEENS ARMS HOTEL

64 JAMES STREET, NEW FARM

Light refreshments will be served at the conclusion of the conference.

Places will be strictly limited so if you would like to register please email reception@redchip.com.au or telephone Jennifer on 3852 5055 to reserve a place.

If you are concerned or wish to obtain further information please contact Angela Laylee (angelal@redchip.com.au) on 3852 5055 for a confidential and obligation free discussion.

IF YOU PROVIDE CREDIT TO CUSTOMERS IN YOUR BUSINESS YOU MUST READ THIS

The Attorney-General has announced that the Registration Commencement Time for the Personal Property Securities Act (“PPSA”) will be 30 January, 2012.

Under the PPSA, all securities, including some that are not currently registrable (such as retention of title clauses) will have to be registered on the online Personal Property Securities Register to ensure your interests are protected. Charges will no longer be registered with ASIC. The mechanism for registering charges on the Register has not yet been publicised but the types of charges to be registered will include: fixed and floating charges, chattel mortgages, conditional sale agreements, retention of title clauses, hire purchase agreements, consignments, assignments or transfers of title, bills of sale and certain financial instruments.

What are the implications for you?

If you –

1. provide credit as part of your terms of trade and seek to rely on a retention of title clause; and/or
2. lease, lend or rent goods,

then YOU ARE AT RISK in a way that YOU have not previously faced.

To illustrate the point – If your business leases a piece of equipment to a customer who then becomes insolvent, you may find yourself in a position where you lose your rights in that equipment to a liquidator or trustee if you have not registered your interest on the Register.

What you need to do

It is vital that all businesses investigate whether or not your lease agreements, and other commercial securities and charges, will be impacted by the PPSA and ensure that there are proper procedures in place to ensure compliance with its requirements.

Failure to be prepared for this new legislation could have serious implications for your business. Therefore, you need to investigate whether or not you will be impacted by this legislation and put proper procedures in place to ensure compliance with the requirements.

CLIENT INFORMATION SEMINARS – January 2012.

We will be holding client briefing sessions in January 2012 to explain the impact of the legislation, the process of registration, the risks and pitfalls. Places will be strictly limited so if you would like to PRE-REGISTER please email reception@redchip.com.au to reserve a place.

For more information

redchip has developed a number of resources to help our clients through the transition phase of this new legislation, including self assessment check lists.
If you are concerned or wish to obtain further information please contact Toni Perkins (Tonip@redchip.com.au) or Angela Laylee (angelal@redchip.com.au) from our PPSA team on 3852 5055 for a confidential and obligation-free discussion.

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ATO RAMPS UP DIRECTORS’ LIABILITY ON PAYG AND SUPER:      NO MORE WARNINGS; NO EXCUSES; NO PAYMENT PLANS               PAY IN FULL AND ON TIME…………. OR ELSE!!

On 13 October 2011 the Federal Government introduced new tax legislation. The intention of the new legislation is twofold:

1. To deter fraudulent phoenix (rising from the ashes) company activity; and
2. To protect employee superannuation entitlements.

OLD LAW

Under the old law directors were personally liable for the company’s unpaid PAYG withholding amounts as well as estimates of PAYG withholding liabilities. The liability did not extend beyond PAYG. In addition, prior to the ATO taking any action, it issued a Director’s Penalty Notice (“DPN”) and allowed directors 21 days to do one of three things:

1. Pay the full amount of PAYG;
2. Appoint an Administrator to the company; or
3. Wind up the company.

This is no longer the case.

NEW LAW

The new law makes directors personally liable for not only unpaid PAYG withholding, but also unpaid superannuation guarantee charges (SGC).

Under the new law the Commissioner does not have to and will not issue any warnings, namely a DPN. If the company has an unreported and unpaid debt that is three (3) months old, the Commissioner can and will commence recovery proceedings without issuing a DPN. Any inadvertent administrative errors could result in immediate recovery proceedings being commenced by the ATO. This is a much tougher regime than in the past………… no warnings given and no excuses accepted!

LIABILITY OF FAMILY MEMBERS

The new law also exposes ‘associates’ – namely family members and other associates of the company to personal liability. This will be done by imposing a new PAYG withholding non-compliance tax equal to the amount of any PAYG credits to which the family member is entitled in respect of payment received from the company.

It is important to note that there needs to be no fraud on behalf of family members. If he or she:

(a)    knew, or ought to have reasonably known of non-compliance; and/or

(b)  was treated more favourably than other employees (regardless of the knowledge);

the tax can and most likely will be applied.

LIABILITY OF NEW DIRECTORS

New directors also have to be alert and keep in mind these new changes as they can become personally liable for  outstanding PAYG and SGC after 14 days from their appointment.

WHAT SHOULD YOU DO?

Directors of individual companies need to immediately review their PAYG and SGC lodgement histories and assess the extent of any unpaid and / or unfunded liability. The key is, that under these new rules ‘I didn’t know’ is not a defence. You need to understand whether you, your co-directors, and even family members are potentially exposed.  If you are concerned, we  urge you to  contact Gavin Barnes to discuss and assess your position

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ACCC acts on unfair contract terms

I recently delivered a paper regarding the new Australian Consumer Law (ACL) to the Gateway division of the Brisbane North Chamber of Commerce (you can access a copy of the paper here). I thought I would mention that the ACCC has commenced its first court proceedings regarding the unfair contract provisions that are contained in the Australian Consumer Law.

The ACL creates a national unfair contract terms regime which applies to standard form consumer contracts and enables a court to find that a term of such a contract is unfair, and so void. This law applies to contracts in all forms including those made online, over the phone or face to face.

A ‘consumer contract’ is a standard form agreement for the supply of goods or services for personal use (that is for business to consumer transactions not business to business transactions).

Under the ACL a term is unfair if:

1. it would cause a significant imbalance in the rights of the parties to the contract; and
2. it is not reasonably necessary to protect the legitimate interests of the party it advantages; and
3. it would cause detriment if applied or relied upon.

The ACCC has commenced action against Advanced Medical Institute (and related companies) alleging unconscionable conduct and breaches of the ACL. In essence, the ACCC alleges that customers were required to enter into long-term contracts that contained unfair contract terms particularly in relation to the ability of the customer to terminate the contract. The contracts contained long notice periods to terminate and fixed termination fees that the ACCC alleges unfairly penalised the customer. A news release is available on the ACCC website with more detail regarding the allegations (which are yet to be heard in court).

Warning: all business owners need to review their trading terms and conditions and internal policies to ensure they are not operating in contravention of the ACL, whether in respect of the consumer guarantee provisions or the provisions regarding unfair contract terms. redchip can review and advise in relation to your contract terms and policies to check for compliance and make sure the ACCC does not come knocking on your door.

Contact Peter McLaughlin or Toni Perkins at redchip lawyers on 07 3852 5055 or email PeterM@redchip.com.au or tonip@redchip.com.au to discuss how we can help you.

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