Shareholdings for employees or family members

Rewarding value and increasing engagement

Bringing a key employee or a family member into your business by offering them a shareholding can be a powerful motivator and a significant indicator of how much you value their contributions to your success. However, the process should be done carefully with a robust shareholders’ agreement and company constitution, as there are many facets of the company-shareholder relationship that must be agreed upon to ensure a harmonious future between yourself and the new shareholders.

The circle of trust

First and foremost, your shareholders should be people whose values are aligned with those of your business. Even if they are minority shareholders, there are circumstances in which you will have to rely on their good judgement. The easiest way to prevent disagreements down the road is to carefully consider their business sense, character and propensity for confrontation before embarking on shareholder discussions.

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On-farm emissions reduction

Five-year joint action plan launched

On 24 October 2019 the primary sector launched the ‘Primary Sector Climate Change Commitment: He Waka Eke Noa – our future in our hands to manage agricultural emissions.’

He Waka Eke Noa kicks off a collaborative five-year joint action plan between the agriculture sector, the government and iwi with the target of decreasing farming emissions and developing a farm emissions pricing scheme. If the action plan produces satisfactory results, agriculture will not be brought into the Emissions Trading Scheme (ETS) under the proposed Climate Change Response (Emissions Trading Reform) Amendment Bill.

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Action Plan for Healthy Waterways

Government’s proposal to clean up waterways

Water quality is no new issue in Aotearoa New Zealand, but it is a growing one. On 31 October 2019, the government closed submissions on the Action Plan for Healthy Waterways. The Plan has since been referred to an independent advisory panel that will consider the public’s submissions and report back to the government. The panel consists of five members with expertise in a range of areas including dairy farming, environmental law, hydrology and water management.

Introducing the Plan, Environment Minister, David Parker spoke of the loss of New Zealand’s once-swimmable rivers and lakes. Damien O’Connor, Minister of Agriculture and for Rural Communities, commended the effort made by farmers to date:

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Trusts Act 2019

Comes into force early 2021

The Trusts Act 2019 will come into effect on 30 January 2021. Much of the Act updates or restates existing law.  However, there are a number of changes about which trustees and people with trusts should be aware.

Trustees’ duties

The Act contains ‘mandatory’ and ‘default’ duties for trustees. Mandatory duties cannot be modified or excluded by the trust deed so all trustees will have to observe them. Mandatory duties are: Continue reading “Trusts Act 2019”

Rural fires

Changes to legislation bring huge implications

The rural fires of last summer are a reminder of the risk of fire to our communities. The cause of the blaze in the Nelson region, one of New Zealand’s largest plantation fires, was attributed to a spark caused when farm equipment hit a stone. This leads to the question – who is liable for the cost of fighting a rural fire?

Many rural people are unaware that when the Fire and Emergency New Zealand Act 2017 (FENZ Act) came into force on 1 July 2017, it significantly moved the fire goalposts. Responsibility changed from what was known as ‘strict liability’ for causing a rural fire to ‘criminalising risky or reckless behaviour’ which results in a fire. It sounds minor, but the implications of this change are huge.

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Enjoy our waterways – but think water safety!

Guest editorial by Jonty Mills, CEO, Water Safety New Zealand

We are truly blessed to live in the Land of the Long White Cloud. This beautiful country of ours is, however, also the land of water. Wherever you are, you are never far from water. We are world-famous for our stunning waterways – our lakes, rivers and beaches. But, it‘s also important to always remember that water can be dangerous and unpredictable.

Whenever you are near a waterway – going for a swim, collecting seafood, or paddling or boating – it is vital that you think about water safety.

Swimming is the deadliest recreational activity. Too many people underestimate the risks, and overestimate their ability, when it comes to swimming.

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Postscript

Changes ahead in relationship property laws

The Law Commission has proposed some significant changes to the way relationship property is dealt with by separating couples.

Since the Property (Relationships) Act 1976 was enacted and with major changes in 2002, the structure of families has changed considerably. New legislation needs to take this into account.

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Smooth sailing this summer

Avoid common mistakes when employing summer staff

With summer fast approaching, many businesses will be hiring temporary staff to meet their needs over the busy summer months. Taking on temporary staff can throw up some tricky issues. Employers often are uncertain about what employment agreement is appropriate for temporary staff and how their holiday entitlements should be met. We explore the pros and cons of different kinds of agreements for temporary employees and provide guidance on their annual leave and holiday pay entitlements.

In general, there are two types of employment agreements that can be used for temporary employees:

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Property briefs

Frequent buying and selling of property tax rules under review

If you frequently buy and sell property, you may want to keep a close eye on Inland Revenue’s review of some property tax rules that was announced in September 2019. One area being targeted is the use of the ‘main home exemption’.

Under current rules, you may be exempt from paying tax on a property sale if the property is your main home. You cannot rely, however, on the ‘main home exemption’ if:

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Residential tenancies

Affecting both landlords and tenants

The Residential Tenancies Amendment Act 2019 came into force on 27 August 2019. This legislation affects both landlords and tenants in a number of ways including limiting a tenant’s liability for careless damage in rental properties, and how methamphetamine (meth) contamination of rental properties is to be tested and managed. Landlords are also now required to provide a statement in the tenancy agreement about the property’s insurance.

Damage to rental properties

The legislation is designed to encourage tenants (and their guests) to look after the property they rent, and for landlords not to be out-of-pocket for careless or intentional damage by their tenants.

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