We're on the move!
Welcome to 2010. It's the world as you've never seen it before.
As a result of the rapid adoption of the latest technology, outsourcing opportunities and modern business techniques Sajen is now more mobile, more agile and more responsive than ever. We've been able to weather the storm of the GFC and now we are positively racing out the other side; we're leaner, we're meaner and, as ever, we're changing.
As part of that neverending and inevitable process of change, Sajen is proud to announce that we're redeploying to Mooloolaba. Yes, we're leaving the warzone that is Maroochydore's CBD and moving closer to where the action really is.
But that's not all, we're also moving to better serve our city clientelle with the opening of offices in the Brisbane CBD. This long awaited step in Sajen's ongoing expansion plans will enable us to have ready access to the superior courts of the land, the government agencies and offices where real decisions are made and a whole other level of commerce and competition. And the benefits that flow from all that will naturally be shared directly with our clients. Our clients will now have the added bonus of city representation for all their legal and business needs. It's just like having your cake and eating it too.
Stay tuned for more updates.
SIGNIFICANT CHANGES TO INSOLVENCY LAWS
The Federal Minister for Financial Services, Chris Bowen, has just announced proposals for key changes to Australia's corporate insolvency laws.
What exactly are these reforms?
The discussion paper published Monday, considers new ways to salvage distressed businesses through “informal work-outs”. The current regime focuses on external administration. However, the government suggests allowing companies to trade while insolvent under certain conditions as they internally resolve their financial difficulties.
Why have these changes been proposed?
The reasons are twofold.
First, this is a response to widespread concern with the current laws which effectively compel directors to wind up companies, even if possibly worth rescuing, in order to avoid personal liability for company debts.
Second, the aim is to reverse the effect of the High Court’s decision in Sons of Gwalia v Margaretic [2007] HCA 1. This case drastically altered the priority of unsecured creditors in certain circumstances. It provided that claims made by shareholders could rank in priority to those of unsecured creditors in certain circumstances.
Key changes
A few of the key changes have been aimed at reducing the costs and challenges of insolvency administrations. The hope is also to reduce the potential for abuse of corporate insolvency law by introducing new business judgment rules, for example.
'Informal work-outs’ are also being encouraged, it is suggested that conventional insolvency procedures are not always the best solution. The reforms will also remove irregularities in respect of 'relation-back' and 'commencement' dates for liquidations.
What can Sajen legal do to help you?
Sajen Legal is committed to ensuring our clients and business partners are capable of dealing with the issues that arise out of the often complex insolvency regime.
We are here to help you understand all the changes, particularly the ones that will impact you as an accountant or insolvency advisor. We will endeavour to help you and your clients make the most of these reforms in the event they become law, to keep you informed of relevant changes to the law and help you examine what measures you need to take and how you can prepare yourself in light of these changes.
Should you wish to discuss any aspect of this letter or ask us any questions, please do not hesitate to contact us.
| Builders and Bankruptcy |
| September, 2009 |
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The effects of bankruptcy or liquidation on a builder's future are long term and dire. We've had good success with the use of creditor's trusts to minimise or negate the effects on the long term future of builders and other trade professionals for whom retention of their BSA licence is mandatory.
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In an ideal world and a new decade, everyone would win the lottery and in this financial slowdown, all your money problems would disappear. While there isn’t much Sajen Legal can do about the first one, we can certainly offer you advice to help you protect your personal and professional financial portfolio, banishing those economic woes.
Individuals as well as companies, big and small, were hit by the Global Financial Crisis. Some have emerged stronger from the slowdown, substituting cynicism with a new hope. Others are still struggling. Bankruptcy, although no new phenomenon, became commonplace at the end of the previous decade. 2008-09 alone witnessed 32,909 insolvency activities as reported by the Insolvency and Trustee Service. Of course, it was one of the key factors which resulted in the global credit crunch but Global Crisis or not, bankruptcy can hit anyone, anytime, anywhere.
A debtor may become bankrupt voluntarily or involuntarily. The former occurs when an Official Receiver accepts a bankruptcy petition presented by the debtor himself. The latter occurs when the court upon the petition of a creditor, makes a sequestration order against the debtor’s estate.
Bankruptcy is usually synonymous with an individual, whereas, insolvency applies to a company. However, in both situations, control of property owned by the indebted person or company is vested with either a liquidator or trustee in Bankruptcy. While some are still awaiting their discharge, a combination of sound financial planning for your future, right choices and invaluable advice could help you not only avoid bankruptcy but also encourage you, your business and household to flourish this year and others to come.
Common financial questions posed in the New Year include, ‘Should I buy a car or a house?’ Global markets are improving, albeit sluggishly, but is it advisable to secure a loan for buying an asset which depreciates eventually or would it be wiser to invest in property?
Investment goals play an important role here. If the purpose is to gain returns on the appreciation of the value of the assets, then it is practical to invest in assets such as stocks, unit trusts, mutual funds or property. A car, on the other hand is a depreciating asset and unless it is being used as a minicab or transportation service, it is not going to attract any income.
Other questions include, ‘Can I start a business without any capital’? The new era injects fresh inspiration into entrepreneurs and enthusiasts but some worry about a lack of capital and their ability to secure loans. Accompanied with this worry is the bigger apprehension of failing to make repayments and the dreaded option of bankruptcy.
Of course these are a few of the many important questions when making new plans. However, a secure plan needs to cover all avenues, not just the obvious ones. Where does one start? How can a business revive itself?
Apart from cost cutting, lay offs, outsourcing, reduced luxury holidays or spa memberships, businesses and individuals in order to financially revive themselves at the office or home could adopt the following simple but prudent tips:
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Set personal and professional goals and then zero in on what matters
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Use a budget and stick to it
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Create an emergency fund
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Reconsider unaffordable assets
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Resist taking out too many loans
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Settle, manage or consolidate your debts
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Understand your target audience
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Exploit your competitive gaps
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Think beyond pricing
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Acquire new skills
These are a few simple ways in which an individual or company can consciously avoid bankruptcy. For instance, proper planning and continually revisiting your business plan can help maximize opportunities in an evolving marketplace. Flexibility is also the key here, both in planning and in your approach. Of course your financial and legal advisors will offer you more structured and detailed advice but relying on your own resources and judgment will go a long way in saving you several pennies. Hiring good people is one example. Investing in the right people can define the difference between success and failure. Better customer relationships will also be built if internal relations are healthy.
At Sajen Legal, we offer our clients advice in times of difficulty, when faced with a serious order such as bankruptcy. We also strive to offer advice in preempting and avoiding such situations. Looking ahead, there is no shortage of good ideas and good people, opportunities and challenges. Implementing, attracting and boldly facing them will mark the beginning of a new era for individuals, families and companies.