Alternatives to a limited AFS licence: what issues should I consider?

Brett Walker, Managing Director of SMART Compliance

Many accountants are still yet to make a concrete decision about whether to obtain a limited Australian financial services (AFS) licence.

Right now I see 4 possible pathways for accountants in the SMSF space:

          1.       Stop operating altogether in the SMSF sector;

          2.       Re-structure your business to refer SMSF work “out” to a suitably qualified AFS licensee;

          3.       Become a representative of an established AFS licensee – institutional or otherwise; or

          4.       Become self-licensed by applying for a limited AFS licence

Let’s consider some of the practical issues involved:

Options 1 & 2: Stop operating in the SMSF space, or refer SMSF work out

The first two pathways are fraught if you want to still help clients with their retirement needs after 30 June 2016. If you plan to refer SMSF work out, you will need to make sure your business has clear policies for staff on what they can and can’t say to clients.

Incredibly, I am hearing that some accountants intend to just ignore the licensing regime and continue establishing SMSFs after July without a licence. I know how easy it would be for ASIC to get data from the ATO to confirm SMSFs established and the accountant who established them. ASIC will pursue unlicensed operators through the courts.

Option 3: Become an authorised representative of another licensee

The third pathway is really just a default choice, but the price of choosing this path is not just your independence (because dealers need to actively control what their representatives do), but also any dealer fee you must pay for the “safe harbour” of someone else’s AFS licence.

Anyone thinking they can simply “test the waters” with a dealer now and maybe opt to get their own limited AFS licence later should know this: “relevant experience” tests apply from July 2016. This means that each responsible manager will need to demonstrate 3 years’ experience in providing the relevant financial services. We simply don’t know yet if, after 30 June, ASIC will accept experience gained under the current accountants’ exemption.

So if you take this third pathway, you may have to wait until at least July 2019 to extract yourself from an unhappy marriage with a dealer. Therefore, those who are considering applying for a limited AFS licence of their own should consider applying by 30 June 2016 because the “experience” requirement is waived until that date.

Option 4: Obtain your own limited licence

The fourth choice – getting your own limited AFS licence – seems the logical pathway for anyone who wants to be able to dictate how they operate their SMSF business after 30 June.

Long term, I believe there will be a competitive advantage for any accounting practice that self-licenses because they will be able to adopt new ideas and adapt their business quicker than their dealer-controlled competitors. And the ongoing compliance obligations are simply not as brutal as some dealers would have you believe.

Don’t ignore the changes. Choose a pathway, choose carefully and choose now.

+Cleardocs Thomson Reuters

Accountants need to get RG 146-compliant now

Brett Walker, Managing Director of SMART Compliance

We are now only a month away from ASIC’s soft deadline (1 March 2016) for accountants to apply for their “limited AFS licence”. Those who don’t take action risk being (i) unable to operate their SMSF establishment business or (ii) forced to work under someone else’s banner from July when the “accountant’s exemption” ceases. You can read more about limited AFS licences on Cleardocs’ Limited AFS Licence Application page.

RG 146 compliance is the key

Accountants must complete an approved course in superannuation as a product class, plus have their generic skills assessed.

Critically, even if an accountant opts to work under someone else’s banner, they will still need to be RG 146- compliant in whatever financial product class they discuss with clients or they’ll be breaking the law.

Most accountants simply need to complete a course that covers (i) generic and (ii) superannuation product competence. This will permit them to provide general and personal advice about superannuation, including setting up SMSFs and arranging rollovers into them.

Optionally, if an accountant wishes to be authorised to also talk to clients about the various classes of financial products they can hold in an SMSF, the accountant should complete additional RG 146 training in:

•          Securities
•          Managed investments
•          Deposit products
•          Life insurance
•          General insurance

Given the fast-approaching March deadline to lodge a limited AFS licence application, I would suggest that accountants focus on completing the necessary training in generic and superannuation product competence, and complete training in the additional product areas if they feel they cannot refer this type of additional product advice out to a specialist.

RG 146 compliance training providers

By googling “RG 146 courses”, accountants will quickly discover the key players in the training sector for financial advisers (which now includes accountants).

Accountants should consider looking for online options that enable them to self-pace.

What is the deadline?

ASIC has repeatedly said that it will not extend the 30 June 2016 deadline when the “accountant’s exemption” ends, so accountants should assume that ASIC is serious when it says applications lodged after 1 March 2016 will probably not make it over the line by then.

Accountants can still apply after 1 March 2016, but they may not receive their licence in time for 1 July.

It’s time to get serious – and get RG 146-compliant.

Completing the ASIC application

The Cleardocs Limited AFS Licence Application package simplifies the process of applying for a limited AFS licence. Accountants receive the essential documents that ASIC requires, tailored to their practice, plus documentation of compliance policies and procedures and step-by-step guidance on completing the application process.

+Cleardocs Thomson Reuters

New - Limited AFS Licence Application

Sharmistha Bose, Product Marketing Specialist

Cleardocs is pleased to introduce the Limited AFS Licence Application document package. This simplifies the process of applying for an accountant's limited Australian financial services (AFS) licence.

Accountants who advise on SMSFs and need a limited licence receive the essential documents that ASIC requires, tailored to their practice. The package also includes documentation of compliance policies and procedures plus step-by-step guidance on completing the application process.

You can order the Cleardocs Limited AFS Licence Application document package online for $1,320 (inc GST).

Who needs to apply for a limited AFS licence?

Anyone who plans to give advice about SMSFs after 30 June 2016 and does not hold an AFS licence should consider applying for a limited AFS licence.

Currently, the "accountants' exemption" in the Corporations Regulations 2001 allows recognised accountants to give advice about SMSFs without holding an AFS licence. However, this exemption will be repealed from 1 July 2016. Those who wish to continue giving SMSF advice from that date will need to hold an AFS licence (full or limited) or become an authorised representative of an AFS licensee.

What documents are included in the Cleardocs Limited AFS Licence Application package?

The document package includes:

• "Core proofs" - these are the essential documents that all applicants must prepare as part of their application
• "Non-core proofs" (additional proofs) - this is additional documentation of compliance policies and procedures that you must provide if requested by ASIC
• Question-by-question guidance on completing the online ASIC application form
• An Establishment Kit explaining all the steps in the application process, and ASIC guidance on how to prepare the required cash flow projection.

The package does not include lodgement of the ASIC form - you must do this online via the ASIC website. However, the Cleardocs document package includes step-by-step guidance on how to complete and lodge this form.

Can someone check my documents before lodgement?

Users who would like a licensing expert to check their documents before lodgement can choose an optional review service from licensing expert SMART Compliance for an extra fee of $330 (inc GST).

Any questions?

If you have any questions about the Limited AFS Licence Application package then please contact Harin Wijenayake on 0415 227 533 or at harin.wijenayake@thomsonreuters.com. 

+Cleardocs Thomson Reuters

ASIC rejections due to an existing business name

Grant Stoddart, Customer Service Representative

As we approach one of the busiest times of year for company registrations at Cleardocs, I thought I would address a common query about ASIC rejections. Some of you might discover ASIC has rejected your company registration on the basis the name you want to register is identical to an existing business name.

It is ok for ASIC to register a company with a name identical to an already registered business name provided the business name holder is involved in the company and meets ASIC’s requirements in terms of the level of their involvement.

ASIC advises that in order to register a company using an existing business name,the following conditions must be met:

If the business name is held by a:	ASIC registration requirements for the company are:
Sole trader	The sole trader must be a director
Partnership	Each partner must be a director
Trust	Each trustees of the trust must be a shareholder, and a copy of the trust deed emailed to ASIC
Company	The company must be a shareholder in the new company

After you submit your application to ASIC, its system will flag the existence of the identical business name and ASIC will reject the application. All you need to do is call or email Cleardocs support and we will lodge the application manually for you, confirming with ASIC that the above conditions have been met. As this application will be manually reviewed by ASIC, it will take a bit longer to process, but in most instances the company will be registered on the same business day.

If the company has no connection to the existing business name, or does not agree to the ASIC requirements in the table above, then they will need to choose a different company name to register.

For further information about ASIC rejections or Cleardocs document packages, please call our helpline on 1300 307 343.

+Cleardocs Thomson Reuters

Is the Certificate of Registration for a company you order online through Cleardocs sufficient to give a bank?

Christopher Balmford, MD

The Certificate of Registration for a company that ASIC sends to Cleardocs electronically — and that Cleardocs provides to its customers electronically — is the original Certificate. The only way ASIC provides its standard Certificates is electronically.

The standard Certificate is enough to open a bank account and is what most companies use.

(Apart from the standard certificate, you can order a hardcopy printed “commemorative certificate” direct from ASIC. These commemorative certificates cost extra, $39.95 each or $34.95 each for 2 or more. There are 12 different designs, for example: Australian birds, Australian icons, Agriculture, Classic, Commerce, and Technology. But ASIC makes a commemorative certificate for you only if you specifically order one direct from ASIC after your company is registered. ASIC will then send the commemorative certificate to the company. It doesn’t send them to Cleardocs.)

Bank rejection? Occasionally when someone is trying to set up a bank account for a company, the bank rejects the Certificate. A bank that does this — or at least, the relevant branch that does this — is several years out of date with ASIC’s systems etc.

If a bank rejects your certificate and asks “for the original certificate”, then the thing to do is to get the person at the bank to check the above information with ASIC. They can do that by:

• calling ASIC on 1300 300 630;
• when listening to the options, they should press 1, then 1 again; and
• when they speak to the person at ASIC, they should explain that they registered the company through Cleardocs and the Certificate they have given the bank came electronically from Cleardocs.

ASIC will explain things to the bank.

You might like to call ASIC on the number etc. above to confirm all this for yourself.

You can order a company online through Cleardocs for $549.50

You can read an Overview of some things to consider when registering an Australian company

SMSF Borrowing: variable interest rates and interest only loans

By Christopher Balmford, MD

Several people have asked whether the Cleardocs documents for SMSF Limited Recourse Borrowing are suitable for either of:

• a loan with a variable interest rate; or
• an interest only loan.

The answers depend on whether the lender is a bank or a related party of the SMSF.

. . . and the answers — which our lawyers at Maddocks have given us — are . . .

SMSF Borrowing from a bank

If the lender is a bank, then the Cleardocs SMSF borrowing documents are suitable:

• for a loan with a fixed interest rate or a variable interest rate; and
• for an interest only loan.

The arrangements about the interest rate and about what is being repaid are in the loan documents — which the bank (not Cleardocs) provides.

SMSF Borrowing from a related party

Fixed/variable interest rate If the lender is a related party, then the Cleardocs SMSF borrowing documents are suitable for:

• a loan with a fixed interest rate. Although they are not suitable for a loan with a variable interest rate, we can arrange for you to contact our lawyers at Maddocks for a free quote for the firm to manually change your documents to allow for a variable interest rate.
• a loan in which both the interest and the capital will be repaid. Although they are not suitable for an interest only loan, we can arrange for you to contact our lawyers at Maddocks for a free quote for the firm to manually change your documents to allow for a variable interest rate. (Also we are discussing with Maddocks whether to modify our documents so that you can order directly from us a document package that is interest only. We’ll keep you posted.)

What to do? If you need a document package for a loan from a related party that is interest only or that has a variable interest rate, then call us on 1300 307 343. We will arrange for you to contact Maddocks for a free quote for the firm to manually change the Cleardocs documents to meet your needs.

If (after Maddocks has given you the quote) you decide to proceed, then here’s what to do:

• First you order the normal Cleardocs $599 SMSF Borrowing (related party) document package.
• After you order the documents from Cleardocs, you email them to Maddocks and instruct Maddocks to manually change the documents to allow for a variable interest rate or an interest only loan. You can discuss this with Maddocks when you order.
• Maddocks will manually change the documents you ordered through Cleardocs to suit your needs. Maddocks will then send those documents to you ready for signing.

More information

You can read more information about our SMSF Borrowing documents here — for example, what’s included in each package.

Reducing the risk of ASIC Rejecting your company registration order

As easy and streamlined as the Cleardocs’ process for registering companies online is, the convenience depends on ASIC’s ability to register your company application without any problems. Some of the issues which cause rejections can be prevented.  For example, as mentioned in previous blogs, the ASIC identical Names Check facility on the ASIC site is a good start to see what names you can and cannot choose for your company. (http://www.search.asic.gov.au/gns070.html).

There are a few other things to be aware of when answering the questions on the Company Registration interface. By better understanding them, you can increase the possibility of having ASIC accept your application. They are also further explained by clicking on the blue information icons found next to each question. 

Registered Business Names

The Cleardocs interface enables you to select an already Registered Business Name as your proposed company name — as long as there is a connection between the owners of the Business name and the Company. All you need to do is answer ‘Yes’ to the question ‘Is the proposed company name identical to an already Registered Business Name’. A list of states will appear with blank fields next to them, you then type in the entire Registered Business Name numbers (including any letters). When you lodge the company registration, ASIC will conduct a short manual review before it registers the company.

By the way, the company name you are applying for must be EXACTLY the same as the business name the directors or shareholders own.

Has the company name already been reserved with an ASIC 410?

Sometimes, before registering a company, a customer may reserve the company name they want to use. They do that with an ASIC 410 form. This form will ensure that the proposed company name is reserved for a maximum of two months — during which time no one else would be able to register a company with that name.

If a company name is reserved, ASIC will provide you with a reservation number so when you are answering the questions for the company registration, you type in that reservation number to help ensure that the your company registration application  will be registered.

It is important to keep track of who is responsible for submitting (that is, being the “applicant” for) the name reservation form. This is because if the individual completing the registration form is different to the applicant on the reservation form for the same company, then ASIC will be unable to register the company until the reservation has been withdrawn. You can withdraw the reservation by fax — but it causes a delay.

Read more here

Does the company need a Company Secretary?

Although you will be able to register a Pty. Ltd. Company without appointing a company secretary, you should be aware of certain implications of structuring your company this way. Specifically, if you are setting up a company with a sole director who is not also secretary, then that is likely to make things difficult when the company deals with banks. As Maddocks has written in our ClearLaw articles (click here), in section 127 of the Corporations Act (2001), it stipulates that a company with a sole director can execute documents in one or two ways:

•   by the sole director in their capacity as director and in their capacity as secretary ; or
•  by the sole director and by another person who is the company secretary — to enable the company to do that, you can appoint another person as the company secretary in the question "Will any non-directors be a secretary?"

What is an Ultimate Holding Company?

People sometimes struggle with the question about the ultimate holding company, you can rea d about that on the Cleardocs website  (read more about the role of ultimate holding companies here).

Shares held beneficially or on trust?

In the Cleardocs Company Registration interface, you will be asked if shares are to be held “on trust”.  If a person holds shares on trust, it means they are being held for the benefit of another person or entity, such as a family trust.  The ASIC form refers to shares being held “beneficially” — which (a bit confusingly) is really the opposite of “on trust”. That is,  if you hold shares “beneficially”, it means that you are holding them for your own benefit (not on trust for the benefit of another person or entity).

For more information, read our Frequently Asked Legal Questions (FALQ) for shares held on trust here

Smoother company registrations

Understanding key terms and questions such as the above:

• should reduce the possibility of your application being rejected (if it is you can correct your answers and lodge again); and
• therefore should reduce the time you need to spend on getting a company registered with ASIC.

If ever you are unsure of what a question may be asking or referring to on any of our interfaces, be sure to click on the information icon for a direct and helpful explanation.

Check out our ClearLaw News Bulletin ‘Overview of things to consider when registering an Australian Company’ by our team at Maddocks – click here

IS “IT” GOING WELL IN CLEARDOCS?

Thomas Lam, IT Manager

We have been using our “new” issues tracking system (JIRA) to track customers’ issues and  IT projects for many months. So far, this new issues tracking system is working really well for both our IT staff and non-IT staff.

Apart from helping us to manage our IT issues efficiently, our issue tracking system also collects crucial statistics about IT issues resolutions. For instance, I could check how quickly we complete IT tasks and issues as shown in the following chart:

I could also check how well our department in coping with ever-increasing workload from our customers and marketing department, as depicted in the following chart:

I think we are doing well so far and we (IT) could improve on this. In three months time I’ll post more updates on these two charts. So stay tune!

Benefits of a Family (Discretionary) Trust

Belinda Thalakada, Customer Service

Recently, the Australian Financial Review published a useful article on the benefits of establishing a Discretionary Trust — particularly in light of the pending restrictions on access to assets and capital in SMSFs.  

The upcoming restrictions include:

•          a further decrease in SMSF concessional contribution limits from $50,000 to $25,000 in July 2012 for people over 50 who have accumulated more than $500,000 in super;
•          the impending increase to the preservation age which prevents people from retrieving any super from their SMSF until they turn a certain age. This age will be bumped up from 55 to 60 by 2016.

So what does this mean for people with SMSFs? Currently, when you turn 50, you are able to begin a transition-to-retirement income stream. The stream can pay you 10 per cent of your total super each year until you retire.  But by 2016, most SMSF members will have to wait an extra  5 years before they can start their transition-to-retirement phase.

As a direct result of these changes, the article indicates that establishing Discretionary Trusts in conjunction with an SMSF is becoming more and more common. This is because the Discretionary Trust provides people with a tax beneficial option that offers more financial flexibility than superannuation funds. (Though the article is quick to point out that a Discretionary (Family) Trust is not as tax advantageous as an SMSF.) Having an additional trust allows people to access their savings if they want to enter into early retirement.

In the article, Tony Greco, Senior Tax Advisor with National Institute of Accounting, claims that Discretionary Trusts give people access to funds which have been accumulated in much the same way as super. He says, “if you can’t get access to your super until you are 60, then you will need to have some assets outside super”. Discretionary (Family) Trusts also have the added benefit of being able to develop your investment in a less complex and well planned structure — enabling you to spread the “tax burden” associated with the trust’s wealth over generations of beneficiaries.

For the full article, click here.

·         For more information on Cleardocs Discretionary Trusts click here.

·         For a 2 part guide to understanding the features and benefits of Cleardocs Discretionary (Family) you can read Part 1 and Part 2

·         Legal queries about our trusts? Check out the FALQ for Discretionary Trusts here

·         Establish a Cleardocs Discretionary Trust in just fifteen minutes here

The plain-language world has changed: new plain-language law in the US, the professionalisation of the field, 2 recent conferences

Christopher Balmford, MD

A changing world
The plain-language world is changing. Here are 2 highlights:
First, on 13 October 2010, the president of the United States of America, Barack Obama, signed a law that requires federal agencies to use plain language in most government documents. The new law is largely thanks to the efforts of the Center for Plain Language — in particular, its Chair, Annetta Cheek . You can read about the new law on the Center’s site. The Act requires US government agencies to create and fill senior positions with the task of ensuring, and reporting on, compliance with the new law.
Second, the 3 major plain-language organisations have combined to form an International Plain Language Working Group which is producing an Options Paper Professionalising plain language. The paper discusses systems for setting standards for plain-language documents and systems for accrediting plain-language practitioners. It also considers a range of related topics — namely: a definition of “plain language”, more research on what makes communications clear, more advocacy for plain language, and an international plain-language institution. (By the way, the major plain-language organisations are Clarity, which has a focus on clear legal communication, internationally, PLAIN, which is about plain language in all fields and internationally, and the Center, which is about plain language in all fields but has a focus on the US.)
The new US law is likely to lead to increase in plain language everywhere. The activities of the Working Group further confirm that the plain-language world:

• should no longer be seen as “the plain-language movement”;
• but rather should be seen as “the plain-language profession”.

Clarity’s conference in Lisbon, Portugal
All these topics were explored recently at Clarity’s 4^th international conference held in Lisbon, Portugal. For me, the highlights of the conference were:

• the various presentations about how design can help communication — the conference was supported by the International Institute for Information Design (IIID);
• the increased focus on testing documents on sample readers being a key part of rewriting documents.
• the government’s plain language initiatives that the conference triggered; and
• the public debate involving the legal profession that those initiatives generated.

By hosting our conference in Portugal, Clarity has dramatically promoted plain Portuguese ─ especially in the legal world.
As the President of Clarity, it was wonderful to see these developments. My deep thanks to all our sponsors and supporters — especially IIID and the Universidade Nova De Lisboa. Also, my congratulations and deepest thanks to our host Sandra Fisher-Martins and all at PortuguêsClaro.
Educaloi’s conference in Montreal, Canada
A week after the Clarity conference, I spoke at Educaloi’s conference to celebrate its 10^th anniversary. Educaloi is an independent, not for profit organisation providing information and education about the legal system in Quebec, Canada.

Educaloi has long promoted the benefits of plain language — especially for consumers. One of the conference aims was to bring attention to plain language — in the minds of decision-makers and writers, especially in the legal world — as something that is as relevant to business and government as it is to retail consumers. This is something that has happened to a large extent in Australia and is increasingly happening elsewhere in the world — especially in the English speaking world. It is exciting to see it spreading.

Exciting

These are exciting times in the plain-language world.

Enhancing the Cleardocs website

Lisa Galbraith, CEO

Many of you who are Cleardocs users will have noticed our updated website and navigated around the site to create new documents. The changes you see reflect many hours of discussion and feedback from our users, and what we believe will help our customers navigate our site quicker or more efficiently.

There are many experts available to assist in your web redesign and many studies to show you where people look first, and what colours people respond to. You can easily get caught up in the graphics and forget the people who visit your site to get work done. I thought it might be useful to share some of the thinking at Cleardocs on the redesign.

So what factors helped focus our redesign efforts?

Our first priority was to improve the accessibility to our resources and to tie them more closely to our products. You will now see many of our resources are listed alongside products in the product menu, and on the product pages.

Over the last 3 years the amount of information on our site has grown significantly. Our monthly ClearLaw bulletins contain legal information that is useful to our users on a daily basis. Our frequently asked legal questions have expanded. Calls to our helpline showed that not everyone understood how to find the answers to their questions.

Our next priority was to make it easier for you to get started. Some of our new callers found getting started harder than it should have been. You will have noticed the large green buttons “sign up now” and “start new documents here”.

Finally, for many of our customers the volume of documents created on Cleardocs numbers into the hundreds, and keeping track of those documents is not easy, particularly those documents that are frequently reviewed and updated – Like SMSF’s. Calls to our helpline indicated that management of the documents was at times difficult. The development of the MySMSF page and the filter tools are 2 ways of enhancing document management for our customers.

The Cleardocs website is a work place for people creating documents; any refresh of our website couldn’t slow things down. Large graphic files and music slow things down and so were rejected from any consideration.

Refreshing a website is a continual process. We will be shortly sending out a survey to see how the changes are working for our customers. Once we have that feedback we may implement further changes. So look out for the survey email and help make our website work better for you.

You can find the survey here: https://www.surveymonkey.com/s/8XNBJ8C

The Cleardocs Award for Next Generation HR – HR Leader Compass Awards 2010

Danni Kirwan, Marketing Executive

Last night Lisa (Cleardocs CEO) and I attended the 2010 HR Leader Compass Awards, of which Cleardocs was a sponsor.

As a recent entrant to the HR market, this is the first such event that Cleardocs has attended and it was great to see individuals and teams from a diverse range of industries recognised for their efforts in Human Resources.

Cleardocs was pleased to present Lauren Noonan from CB Richard Ellis with the Cleardocs Award for Next Generation HR whilst Scott Paton from Sabre Pacific was highly commended. The Next Generation Award recognises up-and-coming HR talent.

When Cleardocs launched earlier this decade we were the first company to provide online company registration with ASIC, and were seen as the next generation of “shelf company” and legal document provider. Launching our first HR document means that we again find ourselves in a new industry with many exciting opportunities for improving and advancing existing business practices.

This commitment to ongoing development and initiative is why we chose to sponsor the “Next Generation” award – because it’s a title that we are both familiar with and that we value.

The first HR document launched by Cleardocs was the HR Policies and Procedures Manual and a number of other HR documents are also in development. If you have any suggestions for HR or employment related documents, please let us know.

The Cleardocs “Form” factor

Thomas Lam, IT Manager

Apart from overall better quality of our legal documents, Cleardocs’s online ordering form is another “form factor” that distinguishes Cleardocs from its peer.

With our forms you can…

View and answer questions all in one page  Multi-pages forms in general provide less satisfactory user experiences, and the reasons are quite obvious too. Users need to jump through (sometimes back and forth as well) pages to check their answers, etc. Time is wasted between closing and opening pages.

To save user’s time, we put all questions of any form into just one page. This is fine for smaller forms such as Division 7a Loan Agreement and Company Name Reservation. However, larger forms like our Company Registration form (which has over 280 questions) would be too big for users to download and work with. To make these larger forms more usable, we:

1. hide irrelevant questions  For example, we show 37 questions instead of over 280 questions in a blank Company Registration form;
2. load relevant question blocks on demand  This reduces average form download size by up to two third of its original size;
3. load help text on demand  This further reduces average form download size of form by another 6 percent. Replacing paragraphs of help text with help buttons also reduces cluttering of our forms.
4. section bookmark buttons for quick navigation within the form  Users can go to any section by clicking any section bookmark buttons. These buttons are located before and after each section in our forms.

Do less typing with auto-fill and click & paste features  Duplicate data entries is not only annoying and tedious, it is also more error prone.

To save user’s time and improve data correctness, our forms have “smart” dropdowns and lists that are auto-filled when users answer relevant questions. For example, when user enters a director’s name in our Company Registration form, this name will automatically appear in a number of related dropdowns, such as the one under the “Who will chair the meeting?” question.

Recently we have also added “address picker” buttons next to address questions in our forms. These buttons allow users to click & paste an already entered address into another address question.

Fix errors quickly Apart from friendly and informative validation messages, we also added address preview boxes to our ASIC related products which helps people to identify address problems.

Recently we have reworked our ASIC validation message dialog to link errors directly to related questions on the Company Registration form.

What’s next

We’ve planned a series of form improvements after our site’s new look released on 6 Oct. So stay tune for more details.

My SMSF

Belinda Thalakada (Customer Service)

As Lisa’s blog touched on last week, the new site will feature a page entitled ‘My SMSFs’. This page helps organise and manage large volumes of SMSF documents created and amended by our professional users. By arranging the SMSF documents on a separate page (they are still on the My Documents page) we hope you will find it easier to find and manage your funds.

Document layout

In this section, the first thing to note is that the documents are arranged from a fund perspective. Trying to locate a client’s SMSF deed can be tedious especially if the exact date of the fund’s creation is not known. This is why, instead of listing SMSFs in chronological order (the date the document was created), they are listed by fund name in alphabetical order. So find the fund name and you find the complete document history.

How to check what law changes your deed has.

Frequently, I talk to customers about SMSF deed updates and whether one is necessary or not. Keeping track can be difficult. It’s for this reason Cleardocs allocates our SMSFs with deed ‘versions’ On the My SMSFS page, you will now be able to see a separate column which indicates the version of the Cleardocs deed your fund currently has.

Deed ‘versions’ are Cleardocs’ way of categorising what clauses your fund has in relation to the SIS Act. For example, up until July 09 2010, the latest version of a Cleardocs SMSF deed was Version 10. As superannuation law changed in regard to instalment warrants, any SMSF that was set up or updated on Cleardocs after July 9th would have a Version 11 deed and version 10 deeds would now appear as Version 10 of 11.

As on the current site, clicking on the version of the deed will open a new window detailing what your deed includes and the changes made to super law since your last update. So for the above example, a version 10 deed would refer to ‘instalment warrants’ as opposed to version 11 which refers to ‘limited recourse borrowing’. This is an extremely useful when deciding whether it is time to update the deed or not.

Ordering supplementary documents for your SMSF

Quite often our customers may need to order additional documents for their funds, such as setting up a Bare Trust or changing the trustee. Using the My SMSFs page, locate your Fund and simply click on the drop down menu next to the fund in question. Find the supplementary product you wish to order and press ‘Go’.

Tracking changes made to your deed since being with Cleardocs.

Finally, keeping track of various documents purchased for the deed through the life of the fund is often difficult for professional users who establish and manage a large number of SMSFs. The My SMSFs page makes it easier to track any changes made to their SMSFs on Cleardocs. For example, if you established a fund in 2005, updated the deed in 2007 and then did a change of trustee in 2010, all these amendments will be visible under this fund by click the green ‘More’ button found in the extreme right hand side column. Unlike the My Documents page, all the documents relate to the fund name as opposed to the product type which means if you want to know whether a certain fund has ever had an update or had a change of trustee, all you need to do is click ‘More’.

As always we are interested in finding out our customer’s feedback on any new features or products we have on our site. Either call us on 1300 307 343 or email us at support@cleardocs.com to let us know what you think!

The change is here (almost)

Lisa Galbraith, CEO

In mid August Danni Kirwan blogged about some upcoming changes to the Cleardocs website. I am now delighted to announce that the new Cleardocs website will be launched next week.

Over the last couple of years we have made a number of small incremental changes to our website – most of these changes have been to make it easier for you to navigate around the site and to find useful information. We feel that a complete refresh is needed and we hope that you love the changes we have made.

Firstly and most importantly we haven’t taken away any functionality from you. The “My Documents” page – where all your documents are stored is still there, the handy document filter tool is still there at the top of the “My Documents” section. You can still order additional printing and binding after you have completed your documents and we still have samples, frequently asked legal questions and ClearLaw.

So what will you notice?

The Cleardocs website is rich in useful information and we have found that this information is not as easily found as it should be. So we have added a search button at the top of the page – this enables you to search the entire site to locate the answer. This is also really helpful when searching ClearLaw articles.. We have also placed the additional information close to the product pages. For example the new product tabs will provide a list of the extra relevant information we have available such as checklists, sample docs, common legal questions and letters you can use for clients.

We have created a new SMSFmanagement page – My SMSFs. Many of our customers are now managing growing superannuation portfolios and we have noticed it can be hard to find all the changes you have made using the existing My Documents page. My SMSFs page manages your SMSF by the fund name - with one click you can see the full document history of the fund. For example you can see when you created the fund, when you last updated it and when you updated death benefit arrangements. All the document records will still be found under the “My Documents” page, but now you have a choice. For people with lots of SMSF trust deeds we hope this new page will help.

Launch process

When we launch the new website registered users will receive an announcement email the day before. When you go the website you will notice an “overlay” that will help you navigate the changes. The overlay will be available for you to refer back to – so don’t worry that it will disappear after the first viewing.

What remains the same?

Our phone number, the high quality documents and prices and of course the great Cleardocs service remains unchanged.

Look out for our announcement email and please let me know how you are finding the new website and what other changes you would like to see. I’d love to hear from you.

New to Cleardocs – Partnership Agreement

Danni Kirwan, Marketing Executive

Over the past few months the team at Cleardocs (with some help from Maddocks), have been working hard on our latest product launch – the Partnership Agreement. The Partnership Agreement costs $198.00 and includes the agreement and all relevant minutes.

The Partnership Agreement was developed based on customer feedback. Some of you may remember completing a short survey about the types of Partnerships you or your clients use earlier this year. Many Cleardocs products are the result of customer feedback and suggestions, so if you have any suggestions for new products we would love to hear them.

What is a Partnership Agreement?

A Partnership Agreement sets out the rules under which a partnership must act. Unless there is an agreement in place all Partners are equal, and must share profits and cover losses equally. An Agreement allows the partners to record, amongst other things:

· How profits will be shared

· How much money each Partner brings to the Partnership

· How new Partners can join the Partnership

· How partners can be removed from the Partnership; and

· The different roles and responsibilities of each partner

Why should I consider a Partnership Agreement?

As I mentioned above, unless you have a partnership agreement documenting the different roles and responsibilities of Partners, it is assumed that Partners are equal. In reality however, many Partnerships are unequal. Some Partners may be entitled to a larger share of profits because they have contributed more to the Partnership, and some Partnerships may have varying roles and levels of responsibility dependant on the expertise and involvement of the Partners.

Over time these factors or the nature of the Partnership may change, so it is wise to have a written agreement to avoid future disputes.

What’s the difference between a Partnership and a company?

First and foremost, a company is a separate legal entity that needs to be registered with ASIC. A Partnership is not a legal entity, but you will need to register the business name you wish to trade with and apply for an ABN and GST (if applicable).

A company is required to pay tax at the company rate of 30% and lodge a separate tax return, whereas Partners in a Partnership pay tax on their earnings individually and at their own tax rate.

Companies need to be registered with ASIC, and pay ongoing annual review fees. Acting as a Company Director brings with it legal responsibilities, but also offers limited liability protection (hence the term “Proprietary Limited”). In the case of a Partnership, the Partners may be held personally liable for liabilities.

Where can I find out more?

Cleardocs can establish both Partnership Agreements and Company Registrations. If you are considering starting a business, you may wish to get some advice to determine the right structure for you. To find out more about the Cleardocs Partnership Agreement click here to view the product page. If you would like to know more about registering a Pty Ltd Company, click here.

Clarity’s Plain Language Conference October 2010

Christopher Balmford MD

Plain-language conferences are uplifting and energising events.
Clarity’s conference is on in Lisbon, Portugal in October 2010. For all sessions, there will be simultaneous translation between English and Portuguese.
Have a look at the program on the conference website here: www.clarity2010.com/home_en.html
Do come along. Also please encourage others to attend.
Plain-language advocates and practitioners often find conferences are the perfect way:

• to be reminded why they do the work they do;
• to learn from others;
• to further develop their ideas in discussions between the sessions; and
• to connect — or reconnect — with others who share their purpose.

Wherever your energy is at, if you’re interested in plain-language and clear communication, then Clarity’s conference always gives you a lift.
Here’s the site: www.clarity2010.com/home_en.html
Upwards & onwards
Christopher Balmford, President of Clarity, & MD of Cleardocs

SMSF Borrowing to acquire multiple assets — reduced prices from Cleardocs

Christopher Balmford, MD

If an SMSF needs multiple SMSF borrowing document packages, Cleardocs has reduced prices for the second and later orders. The discount is useful for SMSF trustee(s) who are acquiring more than one asset through more than one SMSF borrowing — whether at the same time or over a period, . . . even a lengthy period.
We can also help those SMSF trustee(s) and their advisers by automating an “order-replication process” for multiple orders. How many? . . . Well:

• several of our customers have needed a dozen or so SMSF borrowing document packages for the one SMSF; and
• one of our customers needed more than 100 document packages for the one SMSF. And he needed them all on the same day . . . our automated “order-replication process” saved him and his staff a lot of repetitive typing.

The full stories are below.

Why is the multiple order price reduction required?

The price reduction is in response:

• to the 7 July 2010 law change about SMSF borrowing — which clarified that each SMSF borrowing can be used by the SMSF’s trustee(s) to acquire only one asset, see below; and
• to customers who — to comply with the law — need a separate document package for each borrowing.

What does the law require about acquiring only “one asset” — especially shares?
Although the law changes that came in on 7 July 2010 confirm that for each borrowing the SMSF’s Trustee(s) make they can acquire only a “single acquirable asset”, there is a useful clarification for shares etc. The clarification is that the concept of “single acquirable asset” covers:

• a holding of shares in a company, a holding of units in a trust, or a holding of stapled securities (that is, shares in a company that are stapled to units in a trust);
• as long as that holding is of shares, or units, or stapled securities of the same class with the same market value.

For example, if the SMSF’s trustee(s) borrow to buy 10,000 ordinary shares in company X at $1.00, then that holding is seen as one asset. If the SMSF trustee(s) want to borrow to acquire another 2,000 of those shares at $1.04, then that second holding is a separate asset — and it requires a separate borrowing and a separate set of SMSF borrowing documents.

Similarly if the SMSF trustee(s) were to acquire 2 properties at the same time — each on a separate title — then the trustee(s) would need a separate borrowing and a separate set of SMSF borrowing documents for each property.

What sort of SMSF needs a dozen or so SMSF borrowing packages?
One of our customers is arranging for his own SMSF to borrow a fair amount from one of his related entities. Over the next few months or so, his SMSF’s trustee wants to use the loan money to acquire shares in about 12 different companies.

The new law makes clear that each time the trustee of his SMSF acquires shares — of the one company, in the same class, and at the same price — the trustee is acquiring a separate asset. Therefore:

• each time the Cleardocs customer acquires a separate holding, he needs a separate borrowing; and
• each of those holdings must have a separate set of documents — including: a separate loan agreement, a separate security document, and a separate declaration of custody trust (under which the custodian holds the asset on trust for the SMSF).

. . . and what sort of SMSF needs more than 100 SMSF borrowing packages on the same day?
One of our accountant customers was acting for a client who was buying more than 100 car spaces (before the recent law change). As each car space had its own Certificate of Title his bank took the view that each of them was a separate asset. Therefore, each car space needed to be covered by a separate borrowing and so required a separate set of documents. (By the way, our customer’s client was borrowing the money from one of the big 4 banks — apparently, the bank manager was somewhat irritated at having to prepare so many sets of loan documents.)

How does Cleardocs automate the “order-replication process”?
For the customer ordering the document packages for the 100+ car spaces, each order was going to be identical — other than for the Folio number on the Certificate of Title. So our IT Manager, Thomas Lam, wrote a bit of code that:

• created each new order;
• gave each new order an identifying name (which included the Folio number); and
• pre-populated each set of answers for each of the other 100+ orders — even to the extent of automatically changing the Folio number for each order.

We reckon Thomas’ bit of code saved our customer at least 10 minutes for each order — that’s more than 1,000 minutes, or more than 16 hours, of repetitive typing saved.
To make sure the automation was working properly, we did the first 3 orders one-at-a-time for our customer to check. He checked and confirmed they were correct. Then in one click we did the other 100+ orders for him.
It’s fair to say our customer was delighted by the efficiency delivered by the Cleardocs IT, and by Thomas. And he appreciated the significant discount we gave him too.

What are the reduced Cleardocs prices for multiple orders?
Cleardocs has reduced prices for the second, third and so on (even the 100^th) of the same type of borrowing package for the same SMSF to a flat $99 a package.
Here’s how the discount works for the 2 customers mentioned above:

• the Cleardocs customer buying shares in a dozen companies through a borrowing from a “related party”, pays the full fee ($598) for the first related party document package. But pays only a flat $99 for each related party borrowing package they buy later for the same SMSF; and
• the Cleardocs customer buying 100+ car spaces through a borrowing from a “bank”, paid the full fee ($199) for the first related party document package. But paid only a flat $99 for each of the other bank borrowing packages they bought.

The fact that one of those customers will order their SMSF borrowing packages over a few months and the other did them all on the same day is irrelevant. The discount applies to all orders of the same type of document package for the same SMSF throughout that SMSF’s life.
(By the way, the main difference between the Cleardocs documents package for a “bank” lender and a “related party” lender is that the “related party” package includes a loan agreement and, if the asset being acquired is a holding of shares etc, it also includes a security document.)

Did the law changes on 7 July clarify anything else?
Yes, the 7 July law change also clarified that:

• The borrowed money can be used to meet expenses incurred in connection with the borrowing;
• If the original asset purchased is shares, units, or stapled securities, then the original asset can be replaced — but only with shares, or units, or stapled securities, in the same entity and in the same class and of the same market value; and
• The SMSF can refinance its borrowing.

More Cleardocs information on SMSFs
You can read other articles concerning superannuation and SMSFs here.

Order SMSF related document packages
Set up an SMSF
Update an SMSF deed
Set up an SMSF pension
Arrange SMSF borrowing lending docs:

• for when the lender is a bank
• for when the lender is a related party

Set up an SMSF corporate trustee
SMSF Death Benefit Nomination - binding or non binding
SMSF Death Benefit Agreement - binding or permanent

From the Helpdesk: Life on the line

Belinda Thalakada, Customer Service

Being new to the Cleardocs helpdesk was somewhat overwhelming — especially getting my head around all the different products, processes and generally how Cleardocs works. I guess it’s similar to how a first-time user might feel.

Thankfully, after touring the site, I found the Resources section to contain pearls of wisdom and gems of information about most customer queries for almost all our products. Those pearls and gems might not be all too obvious for the average Cleardocs user, so I thought in this post I’d explore the Resources section with you. I find extremely helpful for me and for customers time and time again.

From this section of the site you can access:

- Sample Documents

This resource allows you to download ‘dummy’ versions of particular products in a PDF reader so you can look at how a Cleardocs deed, constitution or any other document is set out and what it includes/excludes

- Checklists

This resource is particularly useful for customers who know what sort of product they want to purchase but who are unsure on how to get the proverbial ‘ball’ rolling to set up a company, trust or SMSF. The Checklists tell you the information you need to have with you help you answer the questions on our interface when ordering a document package.

- ClearLaw News Bulletin

When there are changes in the law that are likely to affect any of the Cleardocs products, the type change and its potential impact are reported in this regular monthly bulletin. As well as these updates, the bulletin includes articles that help deepen your understanding of existing products — for example: Understanding the Cleardocs trusts: Part 1 of 2 & Part 2 of 2.

- Blog

The blog provides useful information and helpful hints about our products or issues relating to our products and gives us an opportunity to provide further commentary on specific topics. The blogs themselves range from the more technical (for example, why we don’t provide Change of Trustee for a Discretionary Trust Blog Jan 2010) to commentary about the practical application of our products and general observations that may be helpful to our customers

- Links

As the title suggests, this resource lists links to external sites that may be useful in providing more information about ASIC, ATO, State Revenue Offices, Superannuation services etc. In this section, you are able to find links to useful sites such as the ASIC Identical Names Check, GST and ABN registration, stamp duty set by state revenue offices and so forth.

There’s a lot on the site

There’s lots of information on the Cleardocs site. It’s worth having a good wander around. But if you can’t find something, or you’re too busy for a wander, call us on 1300 307 343.

How does a trust own shares or units? . . . Who can own shares or units? Or maybe what can own shares or units? (Because “a trust” can’t own them . . . )

Christopher Balmford, MD

The only “things” that can own shares in a company — or units in a Unit Trust or a Hybrid Trust — are humans or companies. The humans or companies can own the shares or units by themselves or as part of a group. (When thinking about the word “company”, remember that it refers to any type of corporate entity — for example: a “Pty Ltd” company, a “Limited” company, and a corporate entity created by statute.)

So because only humans or companies can own shares or units, it means that:

• a dog, can’t own shares — nor can an elephant, a brick, a hockey stick, or a glass of wine; and
• if shares are going to be “owned on trust”, then they are to be owned by the trustee(s). The point is that the shares aren’t owned by the trust, they’re held (that is owned) on trust by the trustee(s).

This is true for any sort of trust, for example: a Discretionary (Family) Trust, a Hybrid Trust, a Unit Trust, a Bare Trust, a Declaration of Custody Trust (for SMSF Borrowing) and even for an SMSF.

Confusion around this issue troubles many people when they are ordering documents online from Cleardocs.

For example: Someone might be ordering a new company registration from us and they know that some of the shares are going to be held on trust. But on the Cleardocs interface, they can see that we offer them the choice of shares being owned:

• by one of the directors — who has to be a human;
• by a human who is not a director;
• by an organisation;
• by a joint holding — of humans or companies or both.

The customer is puzzled because they think the shares should be owned by the trust . . .

Solution The solution to this apparent puzzle is for the customer to remember that the shares are held by the trustee(s) — and the trustee(s) are always one or more humans or companies. The position is exactly the same if units in a Unit Trust or a Hybrid Trust are themselves held on trust for another trust.

When someone using Cleardocs remembers that the shares (or units) are held by the trustee(s), then they can make the appropriate choice from the list of types of shareholder the Cleardocs interface offers. When they’ve done that, the interface then asks if the shares are to be held by the trustee(s) on trust.

It’s easy really, as long as you remember the shares — or units — aren’t held by the trust, they’re held on trust by the trustee(s).