Trust Law Changes

Trust Law Changes

Family trusts are a practical structure for holding assets, particularly in New Zealand where there are approximately 300,000 to 500,000 trusts operating today. Currently, the Trustee Act 1956 and the Perpetuities Act 1964 contain provisions which need to be read in conjunction with case law regarding their operation, and do not keep up with present-day trust practices. Therefore, the updates regarding trust law under the current Trusts Bill (“Bill”) are long overdue, being the first significant reform for at least 60 years. The Bill will replace these Acts, clarify core trust concepts and create more practical trust legislation.

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Trading on Easter Sunday

Trading on Easter Sunday

Easter Sunday is not a public holiday, yet most businesses used to have to be closed on this particular day. However, changes to the Shop Trading Hours Act 1990 (the “Act”) that came into effect in August 2016 mean that all territorial authorities (city and district councils) now have the power to have a local Easter Sunday shop trading policy to permit shops to open on Easter Sunday in areas comprising the whole or part(s) of an authority's district. At least 25 of the 67 local councils in the country have already passed bylaws allowing shops to open on Easter Sunday.

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Mediation in Employment Disputes

Mediation in Employment Disputes

Alternative Dispute Resolution (“ADR”) methods are alternatives to going directly to court. Using ADR methods instead of pursuing the matter in court is usually more cost effective for all the parties involved, takes less time to resolve the dispute, and also relieves the court of cases they believe can be resolved between the parties without court assistance.  This particular article will focus on mediation in the context of employment law and form a part of our ADR article series which will include articles on formal/informal negotiation and arbitration over the next two newsletters.

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Anti-Money Laundering & Countering Finance of Terrorism

Anti-Money Laundering & Countering Finance of Terrorism

The New Zealand Government estimates the proceeds of fraud and illegal drugs totalling about $1.35 billion each year is laundered through New Zealand businesses.

In order to comply with its international obligations and to improve New Zealand’s ability to identify and prevent money laundering and terrorism financing, the Government has implemented changes to the law which affect various businesses and professions.

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Personal Guarantees

Personal Guarantees

A Guarantor is a person who gives a promise to repay the debt of a borrower.  By agreeing to pay a debt the Guarantor has made a guarantee to the institution or person lending the funds (“lender”). Frequently when someone gives a guarantee they are also giving an indemnity. An indemnity is a contractual promise to accept liability for any loss by the lender that is accumulated in the process of the recovery of a debt. 

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Domestic Violence

Domestic Violence

In 2016, the New Zealand (“NZ”) Police investigated 118,910 incidents of family violence, that equates to approximately one DV incident every five minutes. The most recent parliamentary debate on the issue has resulted in The Domestic Violence – Victims’ Protection Bill (“Bill”), originally proposed by the Green Party, which had its first reading in March 2017. This Bill aims to offer greater protection to victims of DV (“Victim/s”) in an employment context.

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The Corporate Veil

The Corporate Veil

Section 15 of the Companies Act 1993 (“Act”) states that a company has a legal personality in its own right and is separate from its shareholders. This is a principle known as the Salomon principle, originating from the case of Salomon v A Salomon & Co Ltd.  The Salomon principle provides that a company is essentially regarded as a legal person separate from its directors, shareholders, employees and agents. This means as a separate legal entity, a company can be sued in its own name and own assets separately from its shareholders.

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Cloud Storage

Cloud Storage

More businesses endeavour to have more ‘paper-less’ environments with the view to creating more efficient, not to mention tidier, storage systems. ‘Cloud storage’ or ‘cloud computing’ have been developed as a model for enabling convenient network access to a shared pool of resources, including networks, storage and applications, that can be accessed with minimal service provider contact.

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Employment Issues: Health and Safety at Work

Employment Issues:   Health and Safety at Work

Based on the 2011 Australian Model Work Health and Safety Act, New Zealand’s Health and Safety at Work Act 2015 (HSWA) passed into law on 4 April 2016. New Zealand’s historically high rate of workplace deaths and near misses (notably the 2010 Pike River Mine tragedy where 29 miners died due to substantial health and safety failures) was a key motivator for the overhaul of our health and safety laws.

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Protecting your business name

Protecting your business name

The reputation of your business may be its most valuable asset, so it makes sense that you also know how to protect it. In New Zealand you can call your business anything you like which is known as a Trading Name. Trading names are not registered, meaning it is quite possible that other businesses can use the same name, which may cost you customers. So, what can you do to prevent another business from using your trading name?

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Reckless Trading

Reckless Trading

The Companies Act 1993 (“the Act”) provides the framework that applies in respect of directors' duties and reckless trading. The Act prohibits a director from allowing the business to be carried on in a manner likely to create a substantial risk of serious loss to the company’s creditors. Any director who fails to exercise necessary care or prudence may be found personally liable for reckless trading.

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Bright-line Test

Bright-line Test

In 2015, the government introduced the “bright-line test”, a method which attempts to tighten the property investment rules. The bright-line test states that (subject to exemptions) any gain from disposing of residential land within two years of acquiring it will be taxable. The test only applies to residential land. Residential land is land that has a dwelling on it or could have a dwelling on it and does not include farms or business premises.

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