BUSINESS ORGANISATIONS

If a business uses a trading name that is not the owner's or a company name, it must be registered at the Office of Consumer and Business Affairs. This allows a person dealing with the business to search and find who is responsible for the business.

The law seeks to protect consumer by requiring that certain services only be provided by qualified people.

The Office of Consumer and Business Affairs can advise on which trades require licences.

Sometimes an unqualified or unlicensed person may be promised a fee despite not having a licence or qualification. However, a person commits an offence and payment cannot be recovered (even if a good quality service is provided and the person was promised payment) if that person does not have the necessary qualification, licence or registration.

A business owner with an original idea, design or product may ensure that no one 'steals' it by obtaining protection under laws relating to intellectual property such as the Copyright Act 1968 (Cth) or the Designs Act 2003 (Cth). Advice may also be needed to ensure that the owner does not interfere with protection already given to another person, see: copyright.

In addition, a product may be patented at the Patents Office. This involves a specialised procedure requiring technical drawings and specifications of the product. Usually machines, manufacturing processes or drugs are patented.

An owner may also have to be careful not to breach the law of passing off. This area of common law allows a court to prohibit a person who either deliberately or innocently provides a product or service in such a way that consumer may mistake it for another supplier's product which already has an established market. This will depend on whether the similarity of the products (or services) and their presentation is likely to confuse potential buyers of the established product into buying the new product believing that new product is, or is related to, the product with which they are confident.

A major cause of business failure is lack of ready cash to pay for supplies and operating expenses. Many people choose to risk being in debt for the sake of a quick profit while others do not appreciate the costs involved in setting up a business. It is a good idea to prepare a business plan with anticipated sales and likely expenses. From this the net profit should be worked out. If the business is uneconomical this should become apparent. The financial and emotional cost of a failed business, especially on a family, can be high and every effort should be made to become acquainted with the current state of the market.

If customers and clients are likely to gather at your house in substantial numbers, you may well be in breach of planning regulations. Your council could order you to cease trading or fine you for every day that you continue to trade against their order. Similarly, if noise from your house becomes excessive, you face a similar fate. Under the Development Act 1993 'home activities' are usually allowed in a residential zone and it is possible that these home activities can be business activities if they use an area of less than thirty square metres and do not detract from the amenity or quality of the area. However it is best to check with your local council. If a house is used as an office and a home mortgage is being paid, it is possible to obtain tax deductions for a portion of the interest paid. Deductions can also be claimed for a portion of council rates, water rates, strata rates, telephone expenses and building insurance premiums. A tax agent should be consulted for advice on home tax deductions.

Most businesses occupy premises leased from a landlord. The lease is usually for a set number of years ending on a specific date. The tenant obtains the security of a long term lease but also an obligation to pay rent for all of that period even if the tenant leaves the premises. A lease cannot be 'broken' before its term expires, free of liability, unless both landlord and tenant agree. Often the tenant is given a right to renew the original term of the lease for a further set period. This renewal is at the sole discretion of the tenant.

Usually under a lease, rent must be paid each month and a rent review clause allows the rent to be reviewed each year or each time the lease is renewed. The lease will often state that interest is payable on any rent payment that is paid late.

The lease will place responsibility on the tenant for repairs to the premises caused during the term of the lease. An exception is usually made for structural repairs. At the end of the lease the tenant must usually leave the premises in the same condition they were in at the commencement of the lease, allowing for deterioration by ordinary wear and tear.

In addition to the rent, the tenant usually pays for council rates, water rates, building insurance, public risk insurance, plate glass insurance, stamp duty and half of the cost of preparing the lease documents. A lease may state that the landlord is to provide certain works in the premises before the tenant moves in. Those works and their completion date should be specified to avoid later disputes. A tenant must always obtain permission to alter the premises, even to nail holes in walls. It is best to obtain written consent from the landlord. A tenant who installs fixtures may be entitled to remove them at the end of the lease, but only if they are classified as trade fixtures (fixtures that the tenant must have to continue a particular business). If not, a tenant may well be adding fixtures to the premises that remain part of the landlord's premises. It is best to get written acknowledgment from the landlord that certain fixtures can be removed by the tenant before they are installed.

Sometimes a shopping centre lease requires a tenant to pay a contribution for promotions, building improvements, management costs and security costs. Also, the rent maybe a percentage of the tenant's takings, with rigorous requirements for book keeping placed on the tenant.

Most landlords will require the directors of a company leasing premises to guarantee the company's obligations as lessee. If a director agrees to this, the usual protection given by the creation of a company is lost on that lease. Alternatively, the landlord may ask that some other person guarantee the lease. There is no obligation on the company to give its financial details to a prospective guarantor, but if it does, this information must not be misleading. The guarantor is expected to ascertain whether the company is keeping up its lease payments.

An individual person can own and operate a business. There is no special procedure to set up a sole business. The person is responsible for any debts and obligations arising from the business. All of the income from the business and expenses are, for tax purposes, assessed in the name of that owner.

A partnership is formed when between two and twenty people agree in writing or verbally to jointly own and carry on a venture seeking to make a profit. Each partner is liable for the actions of the other partners. The Partnership Act, 1891 sets out the circumstances where the law assumes that people are in 'partnership'. Even if there is no intention to form a partnership, a number of people co-operating in a venture may be legally regarded as partners.

The Partnership Act also specifies various rights and duties of partners. These include:

Some of the above assumptions can be altered by written, verbal or implied agreement between the partners. It is therefore advisable to have a written partnership agreement prepared by a lawyer. An agreementshould state who the partners are and what share they each own of the partnership's capital as well as how much income each partner can draw and how much of the debts each will pay. The agreement may also specify that a particular partner is a 'silent partner' who contributes capital and shares in the income but does not otherwise assist in operating the business, although having the same responsibilities as the other partners.

A partnership may be used to distribute the income of the business to the members of a family to minimise income tax. However, the Australian Taxation Office can require partners to prove they exercise real and effective control over the assets and profits of the partnership. The presence of a partnership agreement prepared by a lawyer and signed at the commencement of the partnership may assist as evidence of a genuine partnership.

A trust is formed when a person (trustee) holds property as the legal owner for the benefit of someone else beneficiary. The trustee controls the property and is its legal owner. However, the trustee is obliged to use the trust property to benefit the beneficiary. A beneficiary can demand that the trustee explain her or his or actions and show that the trustee has been acting in the best interests of the beneficiary.

A formal declaration of trust should be prepared by a lawyer saying that the capital of a business is owned by a trustee. Any person or company may be a trustee and is usually the controlling interest of the business. The declaration of trust will also explain that the trustee will use the income of the business to benefit the beneficiaries of the trust. The beneficiaries of a trust must be able to be identified.

A trust allows the trustee to distribute the income of a business in any way to minimise the income tax liability of beneficiaries. The trust must submit a tax return every year. The trust must pay a high rate of tax on any income that is not distributed before the end of a financial year. The trust does not pay income tax on income it distributes to beneficiaries who must lodge their own tax returns.

A company may be formed under the Corporations Act 2001 (which replaced the Corporations Law on 15 July 2001). On incorporation it becomes a separate, independent legal entity. A company is capable of suing and being sued in its own name, it can hold property and earn income in its own name.

A company must have at least one member (shareholder). The company's members own the company's capital. Members may receive a dividend on their shares but are not responsible for the company's debts. A dividend is a form of income paid to a member from the net trading profit (if any) of a company. If the company is wound up and the debts have been paid, the members are entitled to any capital that is left in proportion to their share holdings. Members can call general meetings on a specific issue and a majority vote will usually bind the company. In addition to having at least one member, the common form of family company must also have at least one director (who can be the same person as the member). A public company must have at least three directors and at least two of them must ordinarily reside in Australia [s.201A], see company directors.

A company must have a Constitution (formerly known as the Memorandum and Articles of Association) that sets out the rules by which the company must be run. Unless a company makes its own Constitution, the Corporations Act 2001 contains sections setting out the rules that the company must obey. These are known as Replaceable Rules. It is possible to adopt rules that control or abolish members' voting powers or that give certain members preferential rights to take shares issued by the company.

A company is incorporated by lodging the necessary documents with the Australian Securities and Investments Commission ("ASIC"). The fee for registering a company is $720. Companies pay company income tax currently at a flat rate of 30%. Members pay personal income tax on any dividends received. If the dividends are franked, the member does not pay tax on the dividend as the company has paid the tax already.

The advantage of conducting business via a company is that the liability of members, unlike in a partnership, is limited to the amount, if any, which remains unpaid on the shares of the company which they own although in the case of a proprietary or family company, most financial institutions will require personal guarantee from the directors before they will lend money. The other main advantage is the tax benefits as the company tax rate is considerably less than the personal income tax rate for people in the higher tax brackets.

It is a criminal offence for any person to contravene a provision of the Corporations Law [s.1311]. See also CORPORATE CRIME.

Anyone who is involved in the management of a company may be regarded as a director, even if that person has not formally been appointed as such [Corporations Act 2001 s.9 — definition of "director")]. If the directors of a company are accustomed to act in accordance with the instructions or wishes of a particular person, that person is also a director. However, a person does not become a director simply because the directors act on her or his professional advice.

A director automatically ceases to be a director if the person becomes disqualified from managing corporation under Part 2D.6 Corporations Act 2001 unless ASIC or the Court allows them to manage [s203B]. S206B Corporations Act 2001 sets out the circumstances in which a person becomes automatically disqualified which includes being convicted of certain types of offence involving fraud or the management of a company or contraventions of the Corporations Act 2001 (and its predecessors). A person who is bankrupt or subject to an arrangement under Part X of the Bankruptcy Act 1966 may also be disqualified from managing a corporation [s206B(3), s206B(4)]. In addition ASIC or the Court can make an order disqualifying a person from being a director [Corporations Act 2001 s206C — s206F].

The Corporations Act 2001 requires that a company director or other officer exercise their powers and discharge their duties with care and diligence [s180]. This duty is subject to a business judgment rule that requires a director making a business judgment to:

In addition, directors and other officers of companies must exercise their powers and discharge their duties in good faith in the best interests of the corporation and for a proper purpose [s.181]. They are prohibited from improperly using their position to gain an advantage for themselves or someone else or to cause detriment to the corporation [s182] and are prohibited from using information obtained as a consequence of their role with the company to gain an advantage for themselves or someone else or to cause detriment to the corporation. [s183]. These last two provisions also apply to employees of the company. All of the provisions give rise to civil obligations. They are also civil penalty provisions. In a case where a court determines that a civil penalty provision has been contravened, it must make a declaration to that effect and may order the person pay the Commonwealth a pecuniary penalty of up to $200,000 and may order the person compensate the company for any loss as a result of the contravention [Part 9.4B]. The court may also disqualify the person from managing corporations for a period the court considers appropriate [s206C].

The Corporations Act 2001 also sets out criminal offence where a director or other officer acts recklessly or is intentionally dishonestly in their failure to exercise their powers and discharge their duties in good faith and in the best interests of the company or for a proper person. Similarly, criminal offences are created where a person recklessly or intentionally dishonestly misuses their position or information they have gained through their position with the company [s184].

Directors have a duty to make full and frank disclosure of information within their knowledge to enable shareholders to make properly informed judgments on any matter [s191].

Each decision of a director can be scrutinised against what could have been done to most benefit the company by that director. Breaches of this duty allow a company to sue the director for damages suffered. This general duty includes the following specific duties.

Directors are under a duty to exercise discretion. This means they must use their independent, informed judgment in managing a company. Directors can delegate their discretion on certain matters and delegation can be valid if done carefully in the best interest of the company.

Directors are under a duty, and have a right, to deliberate. This means they must make a positive effort to be involved in, discuss, consider and use their discretion in acting on company matters.

Directors are under a duty to exercise power for proper purposes. A power that is exercised for a wrongful purpose is invalid. For example, a director may be acting with an improper purpose if new shares are issued, the company is restructured or gifts are made from the company's resources, to increase the power of that director. Acts performed for an improper purpose may be declared invalid, for example, issuing shares to defeat a takeover or to retain control of the company.

Directors are under a duty to avoid conflict of interest. A director usually cannot use an opportunity that arises in the course of business to profit personally at the expense of the company. In addition, a director cannot compete with the company, use the company's property for personal purposes or enter into contracts for the supply goods or services for the company unless making full disclosure to the company.

A director must also avoid any appearance, or mere potential, for a conflict to be perceived or to occur. Should a conflict of interest arise, a director must disclose the interest to the company. A director who does not declare a personal interest in an issue affecting the company commits an offence. If an interest is declared, the other directors may ask that person not to vote on the issue.

A director may be personally liable while acting on behalf of a company for any injuries suffered by people, see: accidents and injuries. Similarly a director may personally commit a crime even though acting for a company.

Directors have particular responsibilities in situations where the company is unable to pay its debts, when the company is placed in external administration, receivership, under official management or in liquidation or where a compromise or arrangement is entered into with its creditor. These include:

For further information on criminal offences committed by company directors, see : corporate crime.

Where appropriate, the purchaser should make the contract conditional upon obtaining finance or the sale of the purchaser's existing business or house. Then if the conditions are not fulfilled, the contract can be rescinded and the deposit refunded.

The contract will provide for a settlement date when both parties finalise their obligations as set out in the contract. The vendor must usually hand over all the books of accounts, receipts and employee records regarding leave, superannuation, wages and WorkCover records. Usually, the parties agree that the vendor will dismiss employees. The employees may be able to claim redundancy packages from the vendor. These might be substantial, especially if there are employees with long service leave entitlements. A purchaser may choose to re-employ the workers or employ new workers instead. However, if the employees retain continuity of employment with the new owner, the sale price should be adjusted accordingly. The purchaser has no obligation to re-employ the workers, unless this is specified in the sale contract.

The contract will usually state that the stock will be valued on a day before settlement. The vendor and purchaser can either agree on the value or a licensed valuer may be employed. A purchaser should ensure before settlement that they have the relevant price lists to check the valuation. A purchaser is then obliged to pay for the stock at settlement. Accordingly, sufficient funds should be set aside, over and above the purchase price of the goodwill and plant of the business, to pay for the stock. Most contracts specify that the purchaser will also pay stamp duty that is assessed on the value of the business.

If the premises are leased the contract will usually provide that an assignment of the lease be signed before settlement. If so, both parties should notify the landlord immediately after signing the contract, if not beforehand. A contract should be made conditional upon the assignment being approved. The landlord may reject an assignment to a purchaser on reasonable grounds such as the purchaser's bad credit record, lack of business experience, dishonesty or lack of business references.

A purchaser must ensure that an assignment of lease or a new lease is signed by the vendor and the landlord and given to the purchaser at or prior to settlement. The purchaser should also obtain written confirmation from the landlord that the vendor is not in breach of the lease on the date of settlement. If the vendor is, the purchaser becomes responsible for the breaches. A landlord is not obliged to release the vendor from the lease and may demand that the vendor remain liable to the landlord if the purchaser defaults before the end of the original lease. If the purchaser does default, the vendor cannot move back into the premises unless both the purchaser and landlord agree.

Sometimes the plant of a business may be leased or obtained on hire purchase from a finance company. The contract will usually say that the plant will be assigned to the purchaser. The vendor should advise the finance company as soon as the purchaser agrees to buy so that they can check the purchaser's credit details before approving the assignment of lease. A purchaser should clarify whether the plant is leased with no right of purchase or whether the plant can be purchased after a certain period.

Where a business operates using a registered business name the contract will usually state that a transfer of the registered business name must be signed by the vendor and given to the purchaser at settlement. If this clause is not in the contract, the purchaser has no right to use the registered name and the vendor can continue to use the name or sell it to the purchaser or to anyone else.

Under the Land and Business (Sale and Conveyancing) Act 1994 anyone selling a business for less than $200 000 must give the purchaser a Form 2 [ss.5,7,8,10]. A Form 2 must be given even if the purchaser does not want it. However, a lawyer's certificate that the purchaser has declined a Form 2 after the consequences have been explained will avoid this requirement. A Form 2 states the gross income, purchases and operating expenses from which the net profit of the business for the last twelve months can be calculated. After receiving the Form 2, or from the time the last party executes the sale agreement (whichever is latest), the purchaser has five days to cool off. The maximum deposit that can be asked for is 10% of the purchase price. A purchaser wanting to cool off must give written notice to the vendor or the vendor's agent before the five days elapse. The contract is then rescinded and the deposit must be refunded. If after cooling off the purchaser reconsiders and wants to buy the business it is likely that the person selling the business must serve a new Form 2 and the five day cooling off period starts running again.

The sale contract may provide that after the cooling off period expires a more substantial deposit must be paid. There is then no limit on the amount of the deposit, as long as both parties agree.

When buying a franchise the purchaser (franchisee) pays for all the normal aspects of a business and also the right to use the name, trademark or logo used by the businesses in that franchise group for a certain period.

The franchise rights usually cost several thousand dollars. In addition, a portion of every months takings are paid to the franchisor as a royalty or commission. The franchisor may require all orders and customer payments be directed to the franchisor who will then deduct the agreed royalty and pay the balance to the franchisee. The franchisee may be required to conform to stringent rules on how to keep records, clothing, shop layout, vehicle displays, opening hours, personal appearance, price control, choice of suppliers and giving the franchisor monthly financial statements. Franchisors strictly enforce these rules and it is no excuse to say that they are petty.

If the franchise runs down from lack of promotion by the franchisor it may be difficult to sue for neglect. Usually the franchise agreement does not obligate a franchisor to maintain the standards and market share of the franchise. It is arguable that the franchisor may implicitly owe the franchisee a duty of care although a court is yet to decide this. Therefore a purchaser should consider that a franchisor may neglect the franchise after the purchaser's money has been received and there may be no claim.

To help avoid problems a purchaser may be able to insist on the franchisor accepting some obligations. A purchaser should ensure that the franchisor promises not to sell excessive numbers of franchises and maintains a specific market area for each franchise business purchased. Sometimes a franchisor will guarantee a minimum income for say the first six months and agree to pay the franchisee any shortfall of income. The franchisor does not have to provide this guarantee but may if asked. It is a good idea to obtain a guarantee for protection from exaggerated promises of the value of the franchise.

The franchisor should agree to continually ensure that other franchisees comply with their obligations and to provide regular training and assistance to franchisees. The franchisor should state what promotions will be undertaken and for what period, especially if the franchisee is paying a promotional levy.

A franchisee can assign the balance of the term of a franchise agreement to a new franchisee. The franchisor must consent to the new franchisee in much the same way as a landlord must consent to a new lessee. However a franchisor does not have to give reasonable grounds for refusing an assignment unless the franchise agreement states the franchisor must.

There is a Franchising Code of Conduct which is now the main source of regulation of franchises.

A business owner should consider taking out an insurance package covering damage to stock, plant and fittings, public risk liability, building, sickness and accident, faulty product liability, professional indemnity, interruption to business and commercial use motor vehicle insurance. As a business debt can be executed against the private assets of the business owner, and in view of the increasing number of people who take legal action if injured, it is wise to consider a full insurance package for a business, see insurance.

Sometimes there is pressure within an industry to provide credit to customers. That is, to supply the product or service prior to receiving payment. In some circumstances a licence is needed to act as a credit provider, see consumer credit. However, a business can legally demand payment in advance of delivery by either cash or bank cheque. Given the high level of debt, it may be advisable not to give credit as a matter of policy as debt recovery often fails to meet creditors' expectations.

In many areas a business can include a clause in a contract explaining that it will not be responsible for an inadequate service or defective product. This must be agreed to by the customer. This type of clause is often printed on the back of an order form signed by a customer. The law requires that a customer be given a reasonable opportunity to read the clause before agreeing to the order. Otherwise a court is likely to exclude the clause from the contract order. However, it is up to the customer to take the opportunity given to read the clause.

The exact wording of an exclusion clause is important. The courts will interpret any ambiguity against the supplier of the goods or service. It is not possible to exclude responsibility in some cases for defects as the law implies certain conditions and warranties that cannot be excluded, see consumer protection. However, it is usually allowable to exclude responsibility where there has been an innocent mistake or defect. If the business does not reasonably try to properly carry out its end of the bargain, the exclusion clause may not protect it.

Sometimes a business will sell products on behalf of another. The business does not own the products, they are consigned to it by the owner. The owner continues to own the products until they are sold to a customer. The owner is then paid an agreed portion of the sale price.

While the consigned products are in the possession of the business, that business is legally regarded as the 'bailee' of the products. As a consequence, the business has a duty to take reasonable care of the products. If the supplier can prove that the products were damaged, lost or stolen because of the carelessness of the business, then the business must pay damages to the owner.

Normally when products are sold, the purchaser becomes the owner when they are taken [Sale of Goods Act, 1895 ]. By including a Romalpa clause in a contract a product taken by a customer remains the property of the business until the customer pays the full price.

If the full price is not paid by the due date, the product may be taken back by the business. The business can then sell the product to another customer. A customer who does not return the goods can be sued for the amount that is not paid. The customer can also be prosecuted by the police for a criminal offence.

A Romalpa clause should be drafted by a lawyer. The correct phrasing can be difficult and some Romalpa clauses have been held to be invalid. In all cases the Romalpa clause must be brought to the attention of each customer before the product is purchased and should as a matter of policy be in writing and signed by the customer. It should also include permission to enter premises to recover goods.

Many businesses have difficulty collecting debts. Whenever you are owed a debt you should always retain proof that the debt exists and proof of the debt’s value. You should keep copies of any agreements, invoices or other document which show how much money is owed or the time date or circumstances of the debt.

Using debt collectors may be an attractive option if you do not have time to focus on debt collection. Debt collectors will generally charge a fee plus a commission of the debt recovered. Subscriptions are also offered for regular debt collection. Debt collectors will usually find out information such as the debtor’s or company’s registered address and will lodge a claim if the matter needs to go to court. The extra cost of debt collection cannot be claimed debt unless there was an express agreement that the debtor will be liable for the cost of debt collection.

Debts can also be assigned or sold to a third person who can then enforce these debts as though they were owed to that person initially. The assignment must be in writing.

A person operating a business through a company will often be asked to personally guarantee the company's lease, credit and loan obligations, as may the spouse, parents or any other person with financial means that knows the business owner.

A guarantee does not have to be in writing but normally is. A guarantor is in a similar position to the principal debtor. The guarantor is expected to find out if the debt is being paid, but the creditor does not have to tell the guarantor if the debtor is in arrears.

Little protection is given to business guarantors outside the common law. In particular, company directors who guarantee their company are given little protection. A guarantee cannot be avoided simply because the guarantor did not think carefully about implications of the guarantee or signed the guarantee on the say so of a spouse or child or because the guarantee was never explained to the guarantor or no time was taken by the guarantor to think before signing the guarantee. Even if a director resigns, she or he will still be liable.

A guarantee signed under 'undue influence' may be void. This occurs where the guarantor is urged to sign by a debtor who was in a position of strength in relation to the guarantor, who apparently did not have the mental capacity to reject the guarantee. It must be shown that the position of the person benefiting from the guarantee exerted substantial mental or emotional pressure on the guarantor who did not receive independent legal advice.

A guarantee may also be void if signed as a result of 'unconscionable conduct'. This may occur where the guarantor is under a disability such as illiteracy, old age, youth, lack of understanding or emotional vulnerability. If that disability is knowingly taken advantage of without the guarantor receiving independent legal advice the guarantee may not be enforced, see consumer protection.

Most credit providers will insist that guarantors get independent legal advice. It is rare for a guarantee to be declared invalid. Detailed evidence of the circumstances of the guarantee being signed and the life history of the guarantor must be given to a court. Legal costs will consequently be high if the matter is disputed.

It is possible to apply to a court for relief against forfeiture of a lease. This involves an application for an injunction supported by an affidavit seeking an order that the landlord allow the tenant to move back into the premises. It is usually necessary to prove that the landlord failed to give reasonable notice of the breach (except for arrears of rent), that there was no breach, that the breach is trivial or that the breach will be rectified promptly. Relief will not be given simply because the tenant will suffer undue hardship by losing the premises.

A lease of premises may include a clause allowing the landlord to recover arrears of rent by issuing a warrant to seize goods owned by the tenant which are in the premises. The procedure of seizing the goods are contained in sections 13-46 of the Landlord and Tenant Act 1936 . The landlord can issue the warrant without giving notice to the tenant. The warrant can only be for unpaid rent, not other charges owed by the tenant. The warrant can be written by the landlord or a lawyer. It must be served on the tenant or left in a prominent position in the premises. Once served, the tenant's goods can be seized immediately.

Usually a licensed process server will seize the goods for the landlord and prepare an inventory. The goods should be sold by auction and a reasonable attempt must be made to obtain a market price for the goods. It is not possible to challenge a warrant properly executed by a landlord. However, it may be possible to apply to a court for an urgent injunction to delay the warrant if it can be proved that arrears will be paid promptly, that there are no arrears or that there is a counter claim against the landlord. A warrant cannot be delayed for causing hardship to the tenant.

If a lease does not contain a clause allowing the landlord to seize goods, then the landlord cannot seize the tenant's goods and would be liable for any damage caused. If someone other than the tenant has goods in the premises and wants to recover them the person must complete a sworn declaration giving details of ownership and then serve this form on the landlord [Landlord and Tenant Act 1936 , s.22].

Partners wishing to resign from a partnership must comply with certain formalities. If they do not they can still be regarded by other people as a partner and therefore responsible for debts incurred after their 'resignation'.

To dissolve a partnership it is necessary to prepare a Notice of Resignation, an example of which is provided below.

The following procedure must be followed:

If the above procedure is complied with, the resigning partner is not liable for debts incurred after the resignation. The resigning partner is still liable for debts previously incurred, although the continuing partners will often agree to pay those debts and 'indemnify' the resigning partner if necessary. However, if the remaining partners can not pay a debt that they have indemnified, the creditor can still take action against the retiring partner. It is recommended that legal advice be sought prior to resigning from a partnership.

A director should resign by written notice. That can be effective immediately. The company must register the notice of resignation at the Australian Securities and Investments Commission within fourteen days or it commits an offence [Corporations Act 2001 s205B]. This notice should be signed by the resigning director.

A director who resigns is still liable for any guarantee signed as a director (director's guarantee). These documents are enforceable as contracts and are still enforceable against guarantors who are no longer directors. It is only because they are usually signed by company directors that they are called 'director's guarantees'.

A director remains personally responsible for any liability under the Corporations Act 2001 which was incurred by the company while that director was still acting as a director, see: corporate crime. However, that director is not responsible for any liabilities incurred after the resignation.