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Disclaimer: This publication contains comments of a general nature only, and is provided as an information service.
It is not intended to be relied upon as, nor is it a substitute for specific professional advice.

The Reserve Bank of Australia has made its last call on the official cash rate for this financial year.

As widely predicted, the RBA has held the cash rate at a record-low 0.1 of a percentage point, despite the housing market continues to boom.
RBA decided to maintain the current policy settings, including the targets of 10 basis points for the cash rate and the yield on the 3-year Australian Government bond; the parameters of the government bond purchase program; and the rate of zero percent on Exchange Settlement balances.

Meanwhile, the RBA issue a clear warning to investors noting that as borrowing increases, and given the environment of rising housing prices and low-interest rates, the bank will be monitoring trends in housing borrowing carefully to ensure lending standards are maintained. The RBA repeats its intentions to keep rates as they are until 2024 at the earliest.
Creditor Watch chief economist Harley Dale supported the RBA’s decisions. He agreed that the low interest rate has a positive effect on economic recovery. It can stimulate business investment and ensure our economic recovery remains durable.

AMP Capital’s Shane Oliver commented, “The jobs market is still a long way from full employment, wages growth at 1.5 percent is way below the 3 percent-plus paces necessary to sustain 2–3 percent inflation, and in any case, inflation is still well below its target zone. So, a rate hike remains some time off”.

However, some are still certain the RBA will be pushed to move in 2023. With the tightening monetary policy in the new financial year, the interest rates are almost certain to be up. However, the RBA states that they prefer to wait for other central banks (e.g. NZ and Canada) to move first before they take any action on the interest rate. Some of the big four are planning to take action on their loan policy and interest rate to slow the speed of property price growth. They will watch the housing market closing.

Nevertheless, the government is still putting in great effort to stimulate the economy. Investors can take advantage of the low interest rate and establish their investment plan. If you are considering buying a business or investing in the property market, you can always give us a call and learn your legal risks and obligations.

Disclaimer: This publication contains comments of a general nature only, and is provided as an information service.
It is not intended to be relied upon as, nor is it a substitute for specific professional advice.

When first setting up a business, one of the very first questions that a business owner is faced with is ‘what business structure should I opt for?’. A seemingly simple answer can have major future implications as each structure has its upsides and downsides. Business people need to acquaint themselves with the options available to them.

1. Sole Trader A sole trader is the most common business structure that is usually adopted by an individual running his/her own business.

Advantages: – Unrestrained decision making as you are the sole operator of your business. – Cheap to set up and maintain. – Flexibility – easy to change to other business structures – Undivided profit – you get to keep all that you make
Disadvantages: – Unlimited liabilities – you are personally responsible for your business legal and financial liabilities – Difficulty in raising capital. – Harder to take breaks as you are the sole decision-maker.

2. Partnership A partnership is an association of two or more legal persons to carry on a business in common with a view to profit.

Advantages: – Access to bigger capital as partners will pool their resources together. – Shared decision-making responsibility – the sum is greater than the parts! – Cheap and informal to set up – a partnership can be established verbally without costs.
Disadvantages: – Unlimited liability – all partners are personally responsible for the partnership’s legal/financial liabilities. This may also mean that you may be liable for the other partners’ debts. – Conflicts – differences in viewpoints between partners.

3. Company A proprietary limited company (“company”) involves at least one shareholder and no more than 50 non-employee shareholders.

Advantages: – Limited liability – a shareholder’s liability is limited to only his shareholding in the company. – Transferability – easy to transfer ownership via selling shares. – Perpetual succession – testator can leave ownership to their heirs in a will/contract. – Tax consideration – corporate tax rate is lower than personal tax rate and more deductibles are allowed. – Access to bigger capital through shareholders, bondholders, and more willing lenders. – Delegated management – decision-making can be delegated to someone acting as a director.
Disadvantages: – Establishment and administrative costs. – More onerous obligations under public law and corporation law.

To find out which structure is the most appropriate for your business, contact us now. Our team of experienced lawyers not only will provide you with advice, but we can also help you set up your business structure and manage the risks that may come with it.

On 1 January 2021, the largest reforms to Australia’s corporate insolvency laws in 30 years took effect, following the end of the temporary insolvency relief measures that protected financially distressed businesses during the worst of the COVID pandemic in 2020.

The changes, which were outlined in the Corporations Amendment (Corporate Insolvency Reforms) Act 2020 (Cth), comprise the following key elements:

A small business restructuring process under Part 5.3B of the Corporations Act 2001; and
A simplified liquidation pathway under Subdivision B to Part 5.5 Division 3 of the Corporations Act 2001

Small Business Restructuring Process

The new Part 5.3B of the Corporations Act creates a simplified voluntary administration process for Small and Medium-sized Enterprises (SMEs).

The process involves the directors or board of an SME appointing a Small Business Restructuring Practitioner (“SBRP”) to oversee the restricting of the company’s affairs.

In order an SME to appoint an SBRP and undergo the restructuring process, it must satisfy the following eligibility criteria:

The company must be insolvent or likely to be insolvent;
The total liabilities owed by the company must be less than $1mil, excluding related party creditors;
The company or the director of the company has not previously used the process or the simplified liquidation process in the previous 7 years; and
The company is not currently subject to other forms of external administration or restructuring arrangements.

Once the SBRP has been appointed, they have 20 business days to submit a restructuring proposal to the company’s creditors.

Those creditors then have 15 more business days to accept or reject the proposal. Once accepted, the SBRP must manage the distribution of funds to creditors, and in the meantime, no action can be taken against the company or its directors until the restructuring plan is completed.

The directors of the company remain in control of the “ordinary course of business” for the company during the process.

Simplified Liquidations

The new simplified liquidation process under Subdivision B to Part 5.5 Division 3 of the Corporations Act creates an alternative pathway for creditors of voluntarily wind up a company. Key features of this new liquidation process to note are:

The process is only available to creditors’ voluntary wind-ups. It does not apply to members’ voluntary wind-ups or wind-ups ordered by the Courts.
The company must have resolved to be wound up voluntarily;
The directors must have given the liquidator a report about the company’s affairs and a declaration that the company will be eligible for the simplified liquidation process;
The total liabilities of the company must not exceed the $1 million limit on liabilities; and
The company’s tax lodgements are up to date.

For further information and advice on how to take advantage of the new small business insolvency laws, feel free to contact us.

The Morrison Government is reforming business and investor visas to maximize the economic benefits for Australia. To that end, changes have been passed and are waiting to come into effect. If you are a prospective investor, an entrepreneur, or a businessperson who has been looking at Australia as a potential market, it is imperative that you be on top of these changes and prime yourself for them.

Here are the changes that you should know:

The quota under the program has doubled from 6800 in 2019-2020 to 13500 in 2020-2021.
The new program will be reduced to 4 streams: Business Innovation, Entrepreneur, Investor and Significant Investor
Provisional visa holders in all 4 streams will be able to apply for permanent residence if they meet the requirements after 3 years, but the provisional visa will now be valid for 5 years in comparison to the current 4-year duration currently.
The requirement for Business Innovation visa holders will be tightened with the $1.25 million business and personal assets threshold and an annual turnover of $750 000.

As the date (1/7/2021) is quickly approaching, it is important that you ready yourself for it to prevent any disruption to your immigration plan.

At Nevile & Co., we have the resources and expertise to assist you with these changes and provide a tailor-made solution to your problem.

Many of our foreign clients are interested in migrating to Australia; however, they are not sure if they can settle well due to language barriers.

The fact is Australia is a multicultural country. Based on the Australian Bureau of Statistics, the past decade has witnessed increasing numbers of Chinese and Vietnamese speakers migrating to Australia. At Nevile & Co, we are experienced in dealing with non-English speaking clients and we have experts in house who can speak your language.

Outside of visa applications, we can provide additional services for you and your family to settle well in Australia.

Need help? Contact us at nevileco@nevile.com.au to discuss further michelle.li@nevile.com.au . Read other related immigration articles.

A Caveat is a warning or proviso that can be lodged against a person’s property to protect the lodger’s right or interests in the property and receive notification if the registered proprietor sells, mortgages or deals with the property.

Caveat is a protection regime for unregistered interests in a property and people with qualified interests should all consider lodging a caveat. However, there are grievous consequences for lodging false caveat and therefore, you should always seek legal advice before taking any action.

Caveats are commonly used to protect:

A purchaser’s interest under a contract of sale
The interest of a beneficiary under a trust
A vendor’s lien for unpaid purchase monies
A mortgagee’s interest under an unregistered mortgage
A purchaser’s interest under an option to purchase land

For assets other than real estates, there is a caveat equivalent available at the Personal Property Securities Register (PPSR). You can register your security interests in the assets with the PPSR online. The registration effectively affords you the same protection with an interest in assets as caveats do to interest inland.

If you are not sure if you can lodge a caveat or how to do it, contact us now. Our team of experienced property lawyers can provide you with top-quality services. Get in touch now!

The Department of Home Affairs and the State Governments have confirmed the reform of Business Innovation and Investor Visa (Subclass 188) in July 2021.

Business Entrepreneurs and Investor are facing higher thresholds including assets and business turnover.

Below is a snapshot of the proposed changes:

188A Business Innovation Visa: Asset requirement will be increased from AUD$800K to AUD$1.25 million. Turnover is expected to increase from AUD$500K to AUD$750K.
188B Investor Visa: Increment of investment amount in Australia
188C Significant Investor Visa: Increment on investment amount in Australia

The State Governments are also implementing stricter rules on State Nomination Application.

Business Innovation and Investor Visa can lead to Permanent Residence Visa after qualifying periods. It is still one of the most advantageous visa options with high approval rate from the department.

Want to know more about the advantages of the Business Visa? Contact us for your free consultation and migration assessment.

For further information or enquiry on the above, please contact us or michelle.li@nevile.com.au .

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