1. LEGAL WORKSHOP
MedTech’s Got Talent
17 December 2016
CARE RESPONSIBILITY PROTECTION HONESTY

2. AGENDA
1. Introductions
2. Companies and Incorporation
3. Shareholders Agreements and Shareholdings
4. Founders & Directors Agreements
5. IP Protection
6. Non-Disclosure Agreements
7. Joint Ventures
8. Questions/End

3. FORGET EVERYTHING YOU KNOW ABOUT LAW
FIRMS
“Australia’s
most
innovative law
firm, working
with the best entrepreneurial minds in
the country” – Huffington
Post

4. COMPANIES & INCORPORATION

5. BUSINESS STRUCTURE
Sole Trader
(ABN)
Company Limited by Guarantee
(Not for Profit/Charity Organisation)
Company
(Pty Ltd)
Trust
Partnership
1
2
3
4
5

6. Registration
• ACN
• Directors
• Shareholders
• Constitution
WHAT ARE THE BENEFITS
Pre-Registration
• Check name
• Understand
and agree
structure
• Fee $469 (ASIC)
Post-Registration
• Corporate Key
• ABN/TFN
• Bank Account
• Company
Records

7. WHAT TO DECIDE BEFORE STARTING
A COMPANY
Who are the directors
and who is the Secretary
of the company?
Remember Shareholder
doesn’t mean Director
Who are the
equity/shareholders and
in what %?
How many shares do you
issue?
Do you have (or wish to
establish) a
discretionary trust to
hold your shares?

8. SHAREHOLDERS
AGREEMENTS
Understanding your
Shareholdings & Equity
options …

9. SHAREHOLDERS AGREEMENT
Voting Rights
A shareholders agreement sets out
the types of decisions that must be
made by 50% of Directors, and
others which are to be made by
75%. Voting rights are related to
Shareholding held rather than
Director
Rights to Appoint and remove
Directors
Shareholders agreements will dictate
how and when to appoint directors
and will also assign either 1 or 2
directors per Shareholder, or outline
which Shareholder has the right to
appoint a director/s
…is a contract which sets out the basic control structure of the company with
specific agreed rules (EQUITY NOT MANAGEMENT)
Payment of Dividends
We are in business to generate a
profit. Dividends and distributions
can be paid from surplus funds in
the company. You can restrict
payments and outline how

10. SHAREHOLDERS AGREEMENT
Accession Procedure
This is the process of either issuing
new shares or bringing new
Shareholders into the company. A
Deed of Accession removes the need
to create a new Shareholders
Agreement each time
Transfer of Shares
Pre-emptive right provisions ought
to exist in all Shareholders
Agreements. This outlines how
Shares are to be sold, or transferred
including buy-back provisions.
Shareholders need to decide on
“Drag” or “Tag” along options.
Deadlock Provisions &
Dispute Resolution
Deadlock provisions occur in
circumstances where Shareholders
cannot agree and particularly where
shares are held equally. Deadlock
and Dispute Resolution provide
some options in this event.

11. BE CLEAR
What rights does
that Shareholder
have
Who holds the
Shares and how
Management
and Equity are to
different things

12. FOUNDERS AND
DIRECTORS
AGREEMENTS

13. WHAT IS IT?
It is essential to get everyone on “same page” early
Clear description of the business and its aims
Exact roles and responsibilities of each founder
Expectations including salary, meetings, commitment and non-
performanc
1
2
3
4
… a contract between co-founders or directors relating to the management of the
company including their roles and responsibilities.

14. WHY DO YOU NEED ONE?
Keeping each other accountable is critical
What happens in the event someone looses interest?
How do you deal with a founder who invested time and money for 2
years then wants to leave yet keep their shares after that?
How do you agree to resolve disputes and move the company forward?
2
3
4
5
The company/business is “beyond” you1

15. INTELLECTUAL PROPERTY
PROTECTION

16. IP HOLDING COMPANY
Setting up an IP holding company has many advantages. Keeping the
IP company separate from the operations of the business means you
can:
- Protecting valuable assets from insolvency – by placing your business’ IP in a
non-trading holding company, the IP (a valuable asset) is protected from the hands
of creditors if the operating entity enters insolvency;
- IP held separately from other assets can more easily be used as security or sold;
- You can attract investment by virtue of having in place a sophisticated corporate
structure;
- Taxation/finance – to enable revenue to be generated in low income jurisdictions
or to obtain research and development grants or deductions in jurisdiction with
favourable rules/tax advantages in selling the IP from an IP company rather than
the operating company.
Capturing IP is one thing … how do you commercialise that and keep it safe

17. Franchise Agreement
- Beyond IP you can replicate
your business by offering
“franchises” to be created
COMMERCIALISATION OPTIONS
When employing members to your team, it is important to ensure that:
Assignment Agreement
- Selling your IP to another
person or company
License Agreement
- Grant a license to a third
party to use your IP in a
certain way without granting
proprietary (ownership)
rights

18. TERMS OF SERVICE
Understands the service that is being offered
Understands what is and what is not allowed or permissible on the
website and any related portal
agrees to waive any and all claims s/he might have as a result of their
participation, or involvement in the website, service or portal
Gives up the right to access the website, service or portal in the event of
any breach
1
2
3
4
Clear indication that by signing up to the website or service that the
client/customer….

19. REGARDLESS OF SIZE, PROFIT, NOT FOR
PROFIT OR SOCIAL ENTERPRISE ….
• The Corporations Act and common law duties apply equally to all
directors and do not differentiate between FP and NFP
• Directors obligations are onerous and are being enforced in both
sectors
• Being a NFP director predominantly for “charitable purpose” is no
longer enough
• All directors assets, reputation and livelihood are exposed
The law, the regulators and the Courts, do not treat you differently,

20. NON
DISCLOSURE
AGREEMENTS

21. DO IT RIGHT – PROTECT YOURSELF
Confidentiality
This protects you and your business
from the receipt of or giving of
confidential information to another
party be it an investor, interested
party or potential employees.
Non-Disclosure Statement
This protects you and your business
against the potential risk of someone
you share your vision, idea or
intellectual property with disclosing
to anther party or using the
information for their own benefit.
Protecting your ideas and intellectual property is an integral part of any business
in assessing any risk exposures your business may have.
Intellectual Property
Trademarks, Patents and other forms
of legal protection of your
intellectual property is the smartest
(and most expensive) way to protect
your brand, identity and intellectual
property.

22. NON-DISCLOSURE AGREEMENTS
An NDA should, at a minimum, include the following :
• identify the parties to the agreement and include their personal
representatives/successors and permitted assigns
• a comprehensive definition of the confidential information the subject of the agreement
• the purpose of the disclosure
• the obligations of each party
• The consequences of any breach or disclosure
• Effect of termination (e.g. return of confidential information)
NDA and Start Ups

23. JOINT
VENTURES
Protection is key for your idea,
business and future

24. JOINT VENTURES
A joint venture is a vehicle through which businesses, investors or individuals enter into an
agreement to exploit a business opportunity with the aim of profit. While the parties enter into
the agreement together, each party brings their own assets, finances and skills to the venture.
What are they ?
Characteristics of a JV
Every JV is different however, most share the following characteristics:
• JVs are usually one-off enterprise projects
• The venturers to a JV manage their own finances
• The venturers to a JV remain separate legal entities
• The assets of the JV are usually owend by the joint venturers separately
• Unlike a company, a joint venture is not legally recognised as a separate legal entity, although parties can
create a company vehicle to manage the joint venture

25. KEY PROVISIONS IN A JOINT VENTURE
AGREEMENT
• At a minimum a JV Agreement must set out:
• Details of the JV including structure and purpose of the JV
• Term of the JV
• Financial contributions and share of profits/losses
• Funding for the JV
• Obligations of the venturers and warranties
• Intellectual property created by the joint venture
• Confidentiality
• Management of the JV project
• Termination (i.e. exit strategy)
• Dispute resolution procedure

26. Melbourne:
Level 13, 114 William Street,
Melbourne, Victoria, 3000
Melbourne:
Level 13, 114 William Street,
Melbourne, Victoria, 3000
Sydney:
Level 13, 50 Carrington Street,
Sydney,
New South Wales, 2000
Sydney:
Level 13, 50 Carrington Street,
Sydney,
New South Wales, 2000
Changing the way that lawyers engage with clients
and the way they provide legal services
(03) 9008 5954
(03) 8678 1269
0417 679 007
dzema@lawsquared.co

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