Posts Tagged ‘business’

Making the Most of Your Agreement to Lease

August 11, 2017

An agreement to lease is an agreement between a landlord and tenant of commercial property. It gives the parties an opportunity to record their leasing arrangements before they are formalised in a deed of lease.

There are many details to be worked through between parties to a lease. The agreement to lease should set out most of the details between the parties so when it comes to signing the deed of lease there is no confusion or discrepancy.

What should be included?

The agreement to lease needs to clearly identify the parties to the agreement and the premises to be leased.

In addition, it should record the annual rent, any reviews of the annual rent, the term of the lease, any renewals of the lease as well as a commencement date and the details of any guarantors required.

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Business Briefs

August 1, 2017

It will all come out in the wash: non-compliance with minimum employment standards

The Employment Relations Authority (ERA) has imposed a significant penalty of $145,000 on Manukau Auto Valet Limited for its failure to pay minimum wages and/or holiday pay to at least 115 of its employees.[1] The penalty was imposed in addition to Manukau Auto Valet’s reimbursement of $96,451 to its employees, which was owed as a result of its non-compliance.

In total there were 322 separate breaches of employment law, each being capable of being penalised with a fine of up to $20,000 that created a total potential liability of $6,440,000. However, as is usual in situations like this, the ERA applied a globalised approach in respect of the breaches and considered other relevant matters such as Manukau Auto Valet’s co-operation. The penalty was reduced to $145,000, which is still a significant sum.

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Shareholders’ Agreements

July 28, 2017

Relationship property for companies

Shareholders’ agreements are comparable to relationship property agreements (colloquially known as ‘pre-nuptial agreements’), as the objective of each is to establish rules for relationship property – whether it’s in your business or your personal life.

Not all relationships were built to last forever, and even the most stable relationship amongst shareholders may waver. Issues may also arise unexpectedly, such as the death of a shareholder or the need for a shareholder to sell their shares. Planning in advance for these events can pre-empt a dispute, and save some costs for the respective parties.

Unlike a company constitution, a share-holders’ agreement is not registered with the Companies Office and therefore it has a greater degree of confidentiality. Company constitutions generally contain the nuts and bolts provisions to operate the company that are not provided for in the Companies Act 1993.

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Airbnb

July 11, 2017

Key tax considerations

Becoming an Airbnb host sounds like the perfect way to fund some overseas travel for yourself and rent out your home while you are away.

The popularity of online booking platforms such as Airbnb, BookaBach and Holiday Homes has grown significantly over the past few years. They are seen as easy for property owners to market and rent their property to the end user, and it turns idle holiday homes or spare bedrooms into income earning assets. BookaBach currently has more than 12,200 holiday rentals and Airbnb has 15,000+ hosts. Airbnb hosts’ average annual income in 2016 was $3,800.

AirBNB

If you want to become an Airbnb host, you’ll need to consider your income tax situation, GST and your ownership structure…

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DIY at the Disputes Tribunal

June 22, 2017

If you have a claim of up to $15,000 – the Disputes Tribunal provides a simple, cost-effective way of dealing with civil disputes. We outline below the basics of what you need to know to make a claim.

The Disputes Tribunal is not a court and there are no judges. Hearings are run by referees who will help the parties to reach an agreement. You can’t have a lawyer with you at the actual hearing – you have to represent yourself. You can, however, talk with us before lodging a claim or attending your hearing.

Disputes Tribunal

We do urge you, however, to try and settle your dispute rather than have to go to the Disputes Tribunal.

Claim threshold

Generally, the Disputes Tribunal is for claims of up to $15,000. However, if everyone agrees then the amount can be $20,000. If you have a dispute for between $15,000 and $200,000, you will need to go to the District Court. The High Court hears larger disputes.

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Will Your Business Survive if You Don’t?

March 23, 2017

Planning is key

Most owners want to ensure their business will continue after they have died. Often they want their family to be able to carry on the business. A common form of business in New Zealand is the family farm and this poses particular problems all of its own. Most people know that they need to have an up-to-date Will and Enduring Powers of Attorney (EPA) to cope with any unexpected events. However, there is a lot more planning that you should do as well.

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Obligations of working dog owners

October 25, 2016

Most farmers will agree that working dogs play a crucial part in the day-to-day running of a successful farm. So it’s important that you’re fully aware of your legal obligations and responsibilities associated with owning working dogs. If you don’t, there’s a risk of substantial fines and possibly a conviction.

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Tax changes, smoke alarms and insulation…

September 16, 2016

Proposed business tax changes

In April, the government announced a package of proposals to simplify business tax, many of which will benefit small and medium-sized businesses. Some of the key tax proposals include:

  • A new pay-as-you-go option for paying provisional tax for small businesses with less than $5 million annual turnover. This will give small businesses an alternative to the current system which requires three annual provisional tax payments. To take advantage of the proposal, businesses will need to use a cloud-based accounting system, such as Xero, linked to the Inland Revenue.
  • Changes to the ‘use-of-money interest’ rules that govern the interest paid to taxpayers for overpayment of tax and interest charged for underpayment. The practical effect is that the changes will eliminate or reduce use-of-money interest for most taxpayers.
  • Contractors will be able to elect their own withholding tax rate to better reflect their circumstances and reduce the impact of provisional tax.
  • Certain penalties will be removed, including the current 1% monthly penalty for new debt. However, immediate penalties and interest charges for late payments will still apply.

taxchanges

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Ni Hao: Doing business with Chinese investors

September 9, 2016

We’ve all seen the headlines about growing Chinese investment around the world and New Zealand is certainly no exception. Although you may already have been in business for years and have a great deal of experience, if you want to be truly successful with a Chinese counterparty then there are some key cultural differences which you should take on board. With that in mind we have set out some points to be aware of when you’re dealing with Chinese investors.

Key cultural differences

Many Asian cultures emphasise indirect communication, particularly if there is a problem. This can be frustrating for Westerners who would prefer just to ‘get it on the table’ and discuss. An email worded to state, ‘… we value the fact that we are equal partners …’ may be phrased that way because they are not feeling like an equal partner and are hoping the situation will improve. That subtlety may well be completely lost on the Western recipient who may be later surprised to find out that all is not as it seemed.
You can deal with a situation such as this by spending time asking questions of the other side and seeking to really understand what they are thinking. If you get a response which seems indirect then that’s a signal that you should follow up with other questions.

chinesebusiness

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Quick Quiz – who has a crocodile logo on the clothes they make? Check the answer here…

August 1, 2016

BUSINESS BRIEFS: The tail of two crocodiles, Business tax proposals announced, Attempt to structure around the Overseas Investment Act proves costly.

The ‘tail’ of two crocodiles

Lacoste recently successfully defended its rights in the Court of Appeal (1) to its trade mark which depicts both a crocodile and the word ‘crocodile’ (mark 70068) despite it never actually having used the mark.

lacoste

Crocodile International Pte Limited had applied to have Lacoste’s mark revoked on the ground of non-use under 66(1)(a) of the Trade Marks Act 2002. Lacoste argued that its use of its other, more familiar mark, constituted use of mark 70068 under the Act’s extended definition of ‘use’ which includes ‘use in a form differing in elements that do not alter the distinctive character of the trademark in the form in which it was registered.’

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