Trusts

A trust is a vehicle by which a person may hold property for the benefit of another.

A trust is basically money or property invested with and administered by a Trustee or Trust of Directors. Any income is then divided among the beneficiaries. A family trust is where beneficiaries are members of the same family. Although the trust is tax free, the beneficiaries themselves are liable for tax on income distributed by the trustee. Trusts allow beneficiaries to split their income among themselves and trade off profitable areas against loss making endeavours.

We have the facilities to provide you with the following trusts:

• Discretionary Trust
• Unit Trust
• Superannuation Fund

Bill of Sale

Many of our clients have been "burned" granting credit to companies with whom they trade. All the trade references and other information given to you by your prospective debtor is well enough but with the economic climate of today we feel it is more important to have a tangible item as security should your debtor not be in a position to pay your account when the time comes.

A Bill of Sale enables you to take security on anything from a car to a computer. Should the debtor not pay then you can take possession of the chattel and sell it and at least recover part of the monies owed to you.


Mortgage Debenture and Loan Agreements

We are further offering the service of drawing a Mortgage Debenture and Loan Agreement which documents are stamped and then filed against your Pty Ltd company. This causes a fixed and floating charge over your company in your name. Therefore, if for any unforseen circumstance any person or company tries to wind your company up you then have the first option and any monies available in the company are paid to the person holding the Loan Agreement and Charge, which in this case is you.

In any business a certain amount of capital from the owners own pocket is loaned to the company initially or perhaps through tough times and this is the amount of the Loan Agreement.


Insolvency

Corporate Insolvency is governed by the Corporations Law which enables company or other incorporated bodies to be wound up by one of its creditors for non-payment of debt.

The most usual method of achieving a winding up order is by a creditor issuing a Statutory Demand. To be able to issue a Statutory Demand a creditor must be owed in excess of $2,000. Should the company fail to comply with the Statutory Demand, then it is deemed insolvent and able to be wound up by the creditor. Of course, there are also many other specific grounds upon which a creditor may have a company wound up.

Shareholders of a company may also apply to have a company wound up in circumstances more commonly found where there is a dispute between the shareholders which renders the company unmanageable. The company itself may even apply to wind itself up in a situation where the directors or shareholders of a company believe it to be insolvent.

Personal (individual) Insolvency is governed by the Bankruptcy Act 1966. This legislation enables a person to be made bankrupt by a creditor if the creditor is owed in excess of $1,500 by a debtor or by the debtors own application.

The bankruptcy process is administered by the Federal Court. Bankruptcy basically applies a process similar to the winding up principles outlined above, although in this case individuals are involved rather than companies.

Should you require any assistance or advice in these areas we would only be too happy to assist you.


Part X and Voluntary Administration

There are many alternatives to a winding up/bankruptcy, such as placing a company into voluntary administration and in the case of an individual having them participate in a Part X Arrangement.

Part X Arrangements often provide a desirable alternative to bankruptcy for people who are heavily in debt and are being pursued by creditors. Frequently, the creditors of a person who is unable to pay his or her debts can be persuaded that it is more desirable to reach a compromise and allow the debtor to continue trading without being declared bankrupt.

Any decision as to the alternative arrangements would be made by the majority of creditors at a creditors meeting and since the decision binds all creditors, the immediate pressure of the Courts and debt collectors is removed.

Likewise, with respect to a company, placing a company into voluntary administration provides breathing space for the company. This time period then enables an administrator to take control of the business of the company and make recommendations about the company's future to creditors which will hopefully maximise the chances of the company continuing to trade and to repay the debts to creditors.