Annual Legal Reviews Play a Critical Role in Strengthening Your Business

Annual Legal Reviews Play a Critical Role in Strengthening Your Business

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Annual Legal Reviews Play a Critical Role in Strengthening Your Business

Authors: Craig Hong

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5 min read

23 Jan 2025

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    Key Takeaways
  • Proactively managing your business's legal affairs is crucial for long-term success.
  • To help you stay ahead, we’ve identified the top 10 legal matters every business should review annually.
  • Conducting these reviews allows you to anticipate challenges, seize new opportunities, and strengthen your business’s resilience.
  • Collaborate with your trusted advisory team to navigate this process effectively, ensuring your business remains compliant, optimised, and protected.

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When it comes to running a successful business, a proactive approach to legal, financial, and operational issues can be a game changer. At Hillhouse Legal Partners, we’ve found businesses that stay ahead of their legal matters not only avoid unexpected headaches but also find themselves in stronger positions when opportunities arise. To make this easier, here’s our top 10 list of legal matters you should review each year to keep your business in great shape.

1. Has your Business Outgrown its Original Structure?
Has your business evolved since you first laid its foundations? It might be time to re-evaluate your corporate structure to ensure it’s still the most effective and tax-efficient setup for where you are now – and where you’re headed. A well-structured organisation not only mitigates risks but also sets the stage for enhanced profitability. Partner with your legal and accounting advisors to optimise your structure for today’s operations and tomorrow’s succession plans. Even if your structure is solid, don’t overlook the importance of keeping all foundational documents up to date.

2. Review Supply Agreements
When was the last time you took a close look at your supply agreements? Regular reviews are essential to ensure you’re still getting the best products and services at competitive prices. As your business grows, what worked in the past may no longer meet your needs. Additionally, with the Unfair Contract Terms regime in play since November 2023, non-compliance isn’t just risky – it can be costly. Protect your business by staying informed and ensuring all contracts are up to date and fully compliant.

3. Assess Premises and Lease Agreements
Your business premises play a significant role in your operations. Be vigilant about lease option terms and the deadlines for exercising those options. Missing these deadlines could result in losing your lease option, putting your business in a precarious position. If your lease is nearing expiration or lacks renewal options, start negotiating a new lease or exploring alternative locations well in advance. Early planning can improve your bargaining position and help secure favourable terms. Additionally, consider whether your premises needs refurbishment or updates to accommodate the evolving needs of your business.

4. Consider Insurances
It pays to consider if your current insurance coverages are still appropriate for your business needs. If your business has grown, you have moved Premises or made new plant and equipment acquisitions, your client base has changed in character or simply if you have just “set and forget” insurances for some time, it may be worth considering your coverage to determine if you need to add policies, change levels of coverage or potentially even remove policies that may be costing you money where risks may have reduced or been removed. A review (and obtaining alternative quotes) can also potentially weed out if your insurer has been increasing premiums on you outside of normal commercial parameters.

5. Refresh Employment Agreements
Employment laws are constantly evolving, and staying compliant is essential to avoid costly legal issues.
Regularly reviewing and updating your employment agreements is crucial to ensure they reflect current legal requirements. Additionally, address any performance management concerns, conduct annual reviews, and consider implementing incentives like share schemes to retain key employees. Legal advice can help you navigate these changes and maintain a positive workplace environment.

6. Ensure Privacy Compliance
In an industry where handling sensitive information is routine, maintaining a robust and compliant privacy policy is non-negotiable. Ensure that your privacy policy is up to date and that your business practices align with the Privacy Act’s requirements. Properly collecting, storing, and using personal information is critical, especially when dealing with employee personal data or other confidential information. Non-compliance can lead to severe consequences, including financial penalties and reputational damage.

7. Formalise Shareholder Agreements
Clear and well-documented shareholder agreements are essential for preventing disputes and ensuring smooth business operations. If your current shareholder arrangements are not fully documented, now is the time to formalise them. Even a concise and straightforward agreement is better than an incomplete or unsigned draft. A signed shareholder agreement provides clarity and helps protect the interests of all parties involved

8. Plan for Business Succession
Even if succession planning seems distant, it’s never too early to start. A well-thought-out succession plan can ensure the continuity and success of your business when the time comes for a transition. By dedicating time and resources to this process now, you can make informed decisions that align with your long-term business and personal goals. Succession planning also provides peace of mind, knowing that your legacy will be preserved.

9. Organise Personal Financial Affairs
Your personal financial affairs are closely tied to your business, and keeping them in order is vital. Ensure that your Will is up to date, especially after significant life events such as the birth of a child, a new partnership, or major business changes. An updated Will protects your estate and ensures that your wishes are respected, providing security for your loved ones.

10. Protect Intellectual Property
In this fiercely competitive business environment, your intellectual property (IP) is one of your most valuable assets. Regularly reviewing and updating your IP portfolio -including trademarks, designs, and patents – is crucial to safeguarding your business. Registering trademarks isn’t just a formality; it’s a powerful tool to secure your business’s innovations and protect them from infringement. Don’t leave your IP vulnerable – take proactive steps to fortify your rights and ensure your business’s unique assets are fully protected.

10. Taking a proactive approach to managing your business’s legal affairs is essential for sustained success. By conducting an annual review of these critical areas, you can better anticipate challenges, capitalise on new opportunities, and maintain a strong, resilient business. We encourage you to engage with your professional advisory team to navigate this process confidently, ensuring your business remains compliant, optimised, and protected.

To establish an annual review process in your business, contact our team on 07 3220 1144 or email@hillhouse.com.au to discuss how we can help you and your business thrive and be protected.

Areas of Expertise

Corporate & Commercial
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New Privacy Law Guidance about AI Highlights the Need for a Cautious Approach

New Privacy Law Guidance about AI Highlights the Need for a Cautious Approach

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New Privacy Law Guidance about AI Highlights the Need for a Cautious Approach

Authors: John Davies, Craig Hong

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10 min read

14 Nov 2024

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    Key Takeaways
  • Recent guidance on Australian privacy laws in the context of AI systems shows that there are many complex issues, and careful controls are necessary to protect businesses from fines and reputational damage.
  • Businesses using AI to make decisions, or as part of important or high-risk work, should be especially careful and should consider blanket prohibitions.
  • Even seemingly innocent uses (e.g., using AI systems to take meeting notes, or as a chatbot to talk to customers) are high risk activities to be done carefully (if at all).

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Businesses should take careful note of the risks of using artificial intelligence (AI) and should implement controls appropriate to their business to ensure use is careful or prohibited.

A breach of Australian privacy law (for example, the Privacy Act 1988 (the Act) may result in significant fines or reputational damage. Given the recency of AI commercialisation, businesses should be especially careful about their compliance when using AI systems as enough time has not passed for best practice steps to develop.

Ensuring sufficient controls (or ensuring prohibition) is especially important where the AI is exposed to personal information, makes decisions for a business (e.g., reviewing and sorting resumes), or is engaging in impactful work (e.g., drafting court material).

As a general comment, it should also be understood that AI systems are often wrong and that their output should be thoroughly factchecked to confirm accuracy.

Best practice will be to not input personal information (especially not sensitive information) into publicly available AI tools, or indeed any AI system unless appropriate safeguards and restrictions are in place.

OAIC Guidance

The Office of the Australian Information Commissioner (OAIC) has issued guidance regarding the deployment of AI systems within an organisation subject to the Privacy Act (APP Entity) to provide a product or service, particularly in the context of generative AI (OAIC AI Guidance).

This guidance is crucial as AI systems are highly complicated and carry numerous complex privacy risks.

We urge all businesses contemplating the use of AI in their business to read the OAIC’s AI Guidance in detail and particularly note the included checklists before undertaking any use of an AI System.

This article does not propose to summarise or repeat the OAIC’s AI Guidance in detail, however a number of key takeaways should be emphasised.

Due Diligence

Prior to use of any AI system, due diligence will be critical, you must understand:

  1. the terms and conditions for the use of the AI system;
  2. how the AI system has been trained and what information it was trained on;
  3. how the AI system will treat the information included in prompts (e.g., is it used to train the AI in future, is it saved locally or remotely);
  4. whether any information included in a prompt will be accessible by publisher of the system (if so, use of the AI system may constitute a disclosure of personal information which is subject to further rules than a use of personal information);
  5. how the AI system is protected from data breaches; and
  6. whether there have been previous data breaches.

You should regularly check and confirm whether any changes occur in respect of the above during the use of the AI system.

Use of Personal and Sensitive Information in AI Systems

Your privacy policy must clearly state how your business uses AI. In some circumstances e.g., where an AI is used to take meeting notes, this will likely be insufficient on its own and the meeting participants should be given an opportunity to opt out.

APP Entities are required by Australian Privacy Principal 6 to only use or disclose personal information for a particular purpose if the information was obtained for that purpose. There are exceptions that permit a use or disclosure for a secondary purpose (e.g., if consent from the individual was obtained). One such exception is where the individual would reasonably expect the APP Entity to use or disclose the information for that secondary purpose if that purpose is related to the primary purpose (or directly related if the information is sensitive information).

The OAIC Guidance relevantly provides that “[i]f your organisation cannot clearly establish that a secondary use for an AI-related purpose was within reasonable expectations and related to the primary purpose, to avoid regulatory risk you should seek consent for that use and/or offer individuals a meaningful and informed ability to opt-out. Importantly, you should only use or disclose the minimum amount of personal information sufficient for the secondary purpose.”

Controls

Prior to using an AI system, a business should consider the worst case scenario, as some AI systems are black boxes and their “reasoning” cannot be extracted and examined. E.g., the OAIC AI Guidance notes that using AI in recruitment could discriminate against candidates based on perceived biases. For this reason, any commercial use of an AI System should include sufficient controls to analyse and manage risks associated with the black box nature of the software.

These controls are discussed in further detail below in our commentary on a recent report by the OVIC.

Businesses which permit the internal use of AI should perform a privacy impact assessment, implement an AI policy containing express requirements for the use of AI systems, and undertake regular staff training on the use of AI.

Generation of personal Information

You should consider that AI systems are trained on a wide range of information, which means they are capable of generating personal information. The OAIC AI Guidance references an example where workplace psychosocial hazard training was partially created with AI and the AI generated a real situation using the real names of the persons involved (who were involved in an ongoing court matter at the time). This event may be considered collecting personal information under the Act and the information collected would need to be treated accordingly as unsolicited personal information.

Meeting minute making

While seemingly innocuous, the risks of using an AI system to record a meeting are substantial – meetings can veer off topic, in which case any personal and sensitive information discussed may well be information the business is not permitted to collect. In that case, that information should be erased or deidentified. Without proper systems in place, this can be easily overlooked from time to time.

AI and images

You also need to be aware that any images generated by an AI may copy part (or all) of an image it was trained on. Such generated images may reproduce personal or sensitive information and may breach copyright laws.

Uploading of images to AI systems should generally be avoided even where no personal or sensitive information is apparent, as the image may contain metadata or sufficient information to identify a location or other personal information may be present to identify a location.

Chatbots

Our view is that any business seeking to use an AI chatbot should seek legal advice beforehand as such activity may result in collection of improper personal and sensitive information. Chatbots also raise particular risks regarding Australian Privacy Principal 10 (ensuring the accuracy of personal information collected) and Australian Privacy Principal 3 which requires that unless unreasonable or impractical to do so, personal information must be collected from the individual directly.

OVIC decision

A deputy Commissioner of the OVIC recently performed an investigation into the use by a child protection worker (the Worker) employed in the Victorian Department of Families, Fairness and Housing (DFFH).

This example is an illustrative example of what controls may or may not be sufficient to guard against the risks of using AI systems.

Conduct

In this example, the Worker used ChatGPT to assist in the drafting of a protection application report, which is submitted to the Children’s Court to assist the court in deciding whether a child needs protection.

The use by ChatGPT of the Worker was plainly inappropriate and dangerous as “the Protection Application Report mistakenly described a child’s doll, that was used by the child’s father for sexual purposes, as a mitigating factor, in that the parents had provided the child with “age appropriate toys””.[1]

Of some interest is the 9 factors identified by the DFFH in their investigation which indicated ChatGPT involvement:[2]

  1. sophisticated language;
  2. overly positive descriptors;
  3. inaccurate information;
  4. unusual content;
  5. unusual terminology;
  6. unusual reference to legal intervention;
  7. unusual Child Protection intervention;
  8. nonsensical references; and
  9. American spelling and/or phrasing.

Any business that, as part of its AI controls, audits work for evidence of AI use, should take note of these examples.

Breach

It was determined that this conduct constituted a breach of Information Privacy Principals 3.1 and 4.1.

Information Privacy Principal 3.1

An organisation must take reasonable steps to make sure that the personal information it collects, uses or discloses is accurate, complete and up to date.

Information Privacy Principal 4.1

An organisation must take reasonable steps to protect the personal information it holds from misuse and loss and from unauthorised access, modification or disclosure.

Controls

The DFFH had the following controls in place at the time of the conduct:

  1. “an acceptable Use of Technology Policy;
  2. eLearning modules on privacy awareness and security awareness;
  3. the DFFH values;
  4. the VPS code of conduct;
  5. Human Rights legislation and associated eLearning module;
  6. communications to leadership and management by way of three education sessions in May 2023 that referred to data security, privacy and other risks associated with GenAI.”[3]

The OVIC decided that these controls were insufficient and there was a need to train all employees, not only management staff.[4]

Since the conduct took place the DFFH created specific “Generative Artificial Intelligence Guidance” (which was circulated on several instances to all DFFH staff), which included two “critical rules”:

  1. “Employees should be able to explain, justify and take ownership of their advice and decisions;”[5] and
  • “Employees should assume that any information they input into public GenAI tools could become public. They must not input anything that could reveal classified, personal or otherwise sensitive information.”[6]

However, the report noted that:

  1. “DFFH has almost no visibility on how GenAI tools are being used by staff. It has no way of ascertaining whether personal information is being entered into GenAI tools and how GenAI-generated content is being applied. Further, as is always the case with policy and guidance, there is no way of guaranteeing that all staff will properly read, understand, and apply these.” [7]
  • “The risks of harm from using GenAI tools are too great to be managed by policy and guidance alone. At present, there are insufficient controls in place regarding staff access to GenAI tools coupled with a lack of assurance capabilities to verify that such use is appropriate. In other words, these controls are insufficient to prevent a re-occurrence of incidents like the PA Report incident.”[8]

Decision

The OVIC decided to issue a compliance notice, with 6 specified actions required (some of which DFFH can apply to amend), including:

  1. DFFH must direct child protection staff to not use any generative AI tools as part of their duties;
  2. DFFH must block access to 15 specified generative AI tools between 5 November 2024 and 5 November 2026;
  3. DFFH must between 5 November 2024 and 5 November 2026 “implement and maintain a program to regularly scan for web-based or external” generative AI tools similar to those directed to be blocked; and
  4. “DFFH must implement and maintain controls to prevent Child Protection staff from using Microsoft365 Copilot” between 5 November 2024 and 5 November 2026.[9]

Takeaway

Businesses which handle important or high risk personal information should be on notice they may not be able to implement sufficient controls around AI systems to prevent breaches of Australian privacy laws and should consider blanket prohibitions to avoid fines or reputational damage.

Hillhouse Legal Partners can assist if you have any questions about treatment of personal or sensitive information, you require the preparation of a privacy policy, or you have experienced a data breach. Feel free to reach out to John Davies, Lawyer or Craig Hong, Director to discuss.

[1] Office of the Victorian Information Commissioner, Investigation into the use of ChatGPT by a Child Protection Worker, available: https://ovic.vic.gov.au/wp-content/uploads/2024/09/DFFH-ChatGPT-investigation-report-20240924.pdf p5.

[2] Ibid p21.

[3] Ibid p23.

[4] Ibid p24 – 25.

[5] Ibid p26.

[6] Ibid p26.

[7] Ibid p28.

[8] Ibid p28.

[9] Ibid p29-30.

Areas of Expertise

Corporate & Commercial
Intellectual Property & Technology
Technology & Startups
Related Posts:
Seven Critical Legal Considerations for a Smooth Business Succession Transition

Seven Critical Legal Considerations for a Smooth Business Succession Transition

Home » Hotels Accommodation & Resorts

Seven Critical Legal Considerations for a Smooth Business Succession Transition

Authors: Craig Hong

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5 min read

11 Sep 2024

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    Key Takeaways
  • Start Early and Prepare Thoroughly: Begin your business succession planning well in advance to address legal complexities related to finance, premises, and operations. Preparing your business as if selling to an external party ensures a smoother transition for any successor.
  • Choose the Right Structure and Funding: Carefully consider the structure of the sale and explore various funding options, such as vendor finance or staged buyouts. Proper financial and legal advice is crucial to select the most suitable arrangement for your specific situation.
  • Document and Consult with Experts: Ensure all aspects of the transaction are meticulously documented, regardless of the successor’s familiarity with the business. Work with a specialised team of advisors to address financial, accounting, and legal considerations for a successful and cost-effective succession.

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Business succession can be a daunting proposition. Having worked so hard and for so long to build a successful mining and resources business, key legal considerations will help you transition from your business smoothly, in accordance with your wishes, and in a manner that will set you up financially for the rest of your life.

The most common methods for business succession are passing the business on to family, selling internally or to an external party. While your exit choice will depend on your individual circumstances, a number of critical legal considerations apply to all of them.

Here are our seven critical legal steps for a smooth and cost-effective business succession.

  1. Start Early

The process of business succession is legally complex. Depending on your exit route, you’ll need to address matters relating to finance, premises, suppliers, customers, and referrers before you can successfully transfer control of your business to someone else. Business succession should be considered as far in advance of actually exiting your business as possible, simply because careful legal planning requires time to achieve the best outcomes.

  1. Prepare the Business for External Sale

Regardless of your chosen exit path, best practice will always be to prepare the business as though you are selling it to a external party with no prior knowledge of the business. This means undertaking a legal valuation, cleaning up and properly documenting any legacy issues that only you are aware of, ensuring that all systems and key agreements are written down and easy to understand, and presenting accounts in a form that are readily understood by third-party accountants. Your aim should be to ensure that whoever takes over the business – family member, internal or external buyer – is well-positioned to continue the operation smoothly.

  1. Consider the Structure of the Sale

The business structure and whether you transfer the business itself or ownership of the entire underlying structure (such as shares in the company or control of a relevant trust) will have different – and very significant – legal implications for both you and the transferee. Given the number of potential permutations and combinations, the most appropriate structure for your sale will not always be clear. You will need proper financial planning, accounting, and legal advice to ensure that you adopt the best possible structure for your situation.

  1. Consider Alternative Funding Structures

If you aim to transfer the business to family members or employees, they may not have the funds readily available to make the purchase or be in a position to obtain bank finance for the full purchase price. Even with third-party buyers, you may be able to achieve a superior result by providing additional vendor finance or structuring the purchase over time. A wide range of legal funding options is available, including secured vendor finance, issue of different classes of shares, staged buyouts, and more. Where significant legal risk is involved, it is critical that your arrangement is correctly documented by a legal expert. You will also need professional advice to decide whether a simple sale for cash or an alternative funding structure can deliver a superior result for you or fit better within your plans. 

  1. There’s More to Selling a Business than Purchase Price

It’s common for a business owner who’s selling their business to become distracted by an attractive initial purchase price. They can fail to properly consider related and critical legal issues including warranty risk, earn-outs, retentions, and restraints of trade. In many instances, a seller may be better off taking a slightly lower price but with drastically reduced warranty risk and little or no earn-out requirements. Effectively, it may be better to take a ‘bird in the hand’ instead of chasing ‘two in the bush’. Agreeing to a high initial purchase price with an earn-out figure that would require the business to have a good year or even outperform its own historical best years could be a disastrous outcome.

  1. Document the Deal Properly

Even if you are transferring the business to people you know and trust and who know and trust you, it’s important to properly document the transaction in its entirety and then undertake the transaction in accordance with those documents. When handled by a legal professional, this process provides clarity and protection for all parties, both during the negotiation and drafting of the transaction documentation stages.

  1. Work with a Specialised Team of Advisors

Well-performed business succession requires a holistic approach and due consideration of all the relevant issues: financial planning, accounting and business advice, and legal services. This is why we advocate working with a team of advisors who are experienced and accustomed to collaborative advice that’s focused on your best interests. There are significant benefits to be gained from working with your professional team to properly understand your current legal circumstances, tax position, and financial and life goals. The most appropriate strategy may then be developed and implemented to achieve a smooth and cost-effective business succession process.

Ensuring a Seamless Transition and Prosperous Future

Effective business succession planning in the mining and resources sector demands a thorough understanding of both internal and external options, along with careful consideration of legal implications and strategic objectives. By preparing well in advance and seeking professional legal advice, business owners can ensure a successful transition and the continued prosperity of their business.

For Corporate and Commercial advice please contact Craig Hong, on 07 3220 1144  or email craig@hillhouse.com.au.

This article was originally published by Resources Unearthed here.

Areas of Expertise

Corporate & Commercial
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Casual Employment Regulations Changes – Effective 26 August 2024

Casual Employment Regulations Changes – Effective 26 August 2024

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Casual Employment Regulations Changes – Effective 26 August 2024

Author: Robert Lamb, John Davies

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3 min read

3 Sep 2024

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Starting 26 August 2024, new regulations regarding casual employment will take effect under the Closing Loopholes (No 2) Amendments. It’s crucial for all employers, especially those with casual staff, to familiarise themselves with the updated obligations outlined in the Fair Work Act 2009 (Cth) (Act).

Revised Definition of Casual Employment

The Act introduces a new definition of casual employment, specifying that an employee is considered casual if:

  • There is no firm, advance commitment to ongoing, indefinite work; and
  • The employee receives casual loading or a designated casual pay rate.

When assessing whether there is a firm, advance commitment to ongoing work, the real substance, practical reality, and true nature of the employment relationship will be considered. Key factors include:

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  • whether the employer can choose to offer work to the employee;
  • whether the employee can accept or decline work offers from the employer;
  • the likelihood of future availability of similar work for the employee;
  • whether full-time or part-time employees perform the same or similar tasks; and
  • whether the employee has a consistent work pattern.

Introduction of the Employee Choice Framework

The obligation for employers to offer casual employees the option to convert to permanent employment will be removed. Instead, the Act introduces a new Employee Choice Framework.

This new framework applies to casual employees hired on or after 26 August 2024. Casual conversion rules currently in place will still apply to those employed before this date until 26 February 2025. However, small business employees will continue under the existing rules until 26 August 2025. Importantly, employers will not be required to offer casual conversion after 26 August 2024.

Under this framework, casual employees who have worked for 6 months (or 12 months in a small business) and believe they no longer qualify as casual can request conversion to permanent status by submitting a written notice to their employer.

Employers must respond in writing within 21 days and are required to approve the request unless there is a valid reason for denial under the Act. Justifiable reasons for rejection might include:

  • the employee still meets the definition of a casual employee; or
  • there are fair and reasonable operational grounds for rejection, such as significant business reorganisation or disruption.

Disputes over conversion requests can be escalated to the Fair Work Commission (FWC) for mediation or conciliation, with arbitration if unable to be resolved informally.

Casual Employment Information Statement (CEIS) Updates

Employers must continue to provide the CEIS to casual employees either before or as soon as possible after they begin their employment.

Additionally, employers will now be required to provide the CEIS to casual employees at 6 months of employment, then at 12 months, and annually thereafter.

For small business employers, the CEIS must be given at the start of employment and again after 12 months.

New Anti-Avoidance Provisions

New anti-avoidance provisions will be introduced to prevent employers from:

  • dismissing or threatening to dismiss a permanent employee to rehire them as a casual for the same or similar work; and
  • making false claims to persuade a permanent employee to accept a casual employment contract for the same or substantially the same work.

Courts may impose penalties for breaching these provisions, with maximum penalties being:

  • $93,900.00 for individuals; and
  • $469,500.00 for businesses.

We emphasise the importance of staying compliant with employment laws and encourage you to seek legal advice if you are unsure of your obligations. The cost of ensuring compliance with the Act, awards, and other legislation can save businesses significant time, money, and stress.

For any questions or concerns about how this new legislation might affect you as an employer or employee, please contact Robert Lamb or John Davies on (07) 3220 1144.

Areas of Expertise

Employment & Industrial Relations
Government
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Annual Review: Top 10 legal matters to consider this financial year

Annual Review: Top 10 legal matters to consider this financial year

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Annual Review: Top 10 legal matters to consider this financial year

Authors: Craig Hong

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4 min read

24 Jul 2024

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    Key Takeaways
  • To achieve the best results, be proactive in management this financial year by conducting an annual review of your practice.
  • Determine where you are sitting on a number of ‘housekeeping,’ financial, legal, and strategic matters to prepare for the unexpected and be in a stronger commercial negotiating position.
  • Here’s our top 10 legal issues we recommend you review to maximise valuable opportunities that come your way now and into the future.

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Get ahead of the curve and prepare for the opportunities that life or business throws at you this financial year. We often find the practices that have the best results are those that are proactive rather than reactive in their management of various issues. With that in mind, we encourage you to invest the time now to review your legal matters to help you ride the highs and lows we see daily when working with our clients.

Generally, practices should be engaging in an annual review to determine where they are sitting on a number of ‘housekeeping,’ financial, legal, and strategic matters. Any practice that does this regularly will see less ‘out of the blue’ problems and will generally find themselves in stronger commercial negotiating positions with a wider range of options than if they wait till the last minute to deal with things or even worse, wait until they have a problem which can be time consuming and expensive.

Here’s our recommended top 10 legal issues to consider as part of an annual review to help you make the absolute most of what comes your way.

  1. Corporate Structure – has your business grown or significantly changed since you established it?  If so, consider if the current structure is still the most suitable and tax effective. For restructuring or preparing for succession, we recommend seeking legal and accounting advice. Even if your structure is sound, it is worth checking that all of your fundamental structure documents are in place and up to date.
  • Supply Agreements – it’s important to review your suppliers regularly to ensure you are still getting the best product or service for a reasonable price. Service contracts on printers, IT and the like need to be reviewed to help you decide if you keep or change them. The terms of these agreements also need to be reviewed regularly to ensure they are compliant with the Unfair Contract Terms regime introduced in November 2023. Breaches of the regime carry significant penalties.
  • Premises – you need to be aware of your lease option terms and the window for exercising those options. These timeframes are very strict and your option can be lost if you miss the exercise window. If there are no options, you should start negotiating a new lease with your landlord or looking for alternate premises. The further out from your option period or expiry of your lease you consider these matters, the better you will be placed to find alternatives and improve your bargaining position. It’s also important to consider your premises’ state of fitout and if it needs refurbishment or changes to suit the stage of your business.
  • Service Agreements – there has been recent significant developments in the application of payroll tax to medical practices. Even though laws are supposed to be harmonised nationally, each State has taken slightly different approaches so you need to be aware of best practice to take advantage of the rulings and exemptions or amnesties relevant to your State. We strongly recommend that practices seek legal advice and accounting advice as these matters can be very technical.
  • Employment Agreements – Employment Law is always evolving and laws change often. We recommend that employers seek legal advice on the impact of these changes and ensure they are compliant. Other employment considerations include any performance management concerns, annual reviews, and incentives for retaining key employees like share schemes.
  • Privacy – ensure you have an up to date and compliant privacy policy on your website and are collecting, storing and using personal information in accordance with your obligations under the Privacy Act. Practices deal with health information, so their privacy and data handling are highly scrutinised and failings on this front can present costly problems.
  • Shareholder agreements – is your current situation fully documented?  It’s best to have a signed agreement rather than a perfect draft, so keep it to the point.
  • Business succession planning – regardless of how far away this event may be, it’s important to consider this when planning and setting business and personal goals. This is a process that the more time, planning and thought is put into it, the better the results we see.
  • Personal financial matters in order – ensure you have and keep your Will up to date when business or life circumstances change (e.g. children, life partners, business changes, planning major purchases or investments, etc.) to protect your estate, wishes and loved ones. 
  1. Intellectual Property – it is vital to ensure relevant trade marks, designs, and patents are all protected. Registered trade marks are one of the best ways to protect the valuable intellectual property of your business. It is imperative that trade mark applications are filed to better secure those IP rights.

We encourage you to reach out to your professional advisory team to help you navigate your way through your annual review process confidently.

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Government
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