Disputes between the shareholders of companies of all sizes are common although it is particularly common in smaller private companies with multiple shareholders. Basically, the idea of shareholder oppression is that the dominant shareholder or shareholders are acting in a manner that is oppressive to the interests of the minority shareholders. This may manifest itself through the denial of directorships or other management positions in the company. It may be because the company fails to allocate dividends fairly or organises a company buy back of shares in a manner that disregards the interests of the minority shareholders. Shareholder oppression suits can exist in relation to public companies as well although these dealings are on a much larger scale than what is normally seen in smaller private companies.

In common law countries, there is an extensive body of case law which deals with the concept of shareholder oppression. However, the action in its most basic form is derived from the Part 2F.1 of the Corporations Act 2001(Cth). Sections 232 and 234 of the legislation allow shareholders to make oppression applications or former shareholders or even persons determined by ASIC to be entitled to do so. If an application is made, the courts must find that the conduct of a companies affairs is oppressive by reason of it being contrary to the interests of the shareholders as a whole or oppressive, prejudicial or unfairly discriminatory against a shareholder or group of shareholders. The term company’s affairs is defined very broadly and basically refers to anything which involves the management and operation of the company and its affairs. Oppression could involve the diversion of corporate opportunities, excessive renumeration, manipulation of share issues, withholding information, boardroom tactics or misappropriation of company funds.

The courts have a broad discretion to deal with such activity. Courts may order that a company be wound up, one shareholder purchase the shares of another shareholder or that a receiver be appointed. It is not uncommon for shareholders to seek recompense from a company in which they own share where their interests have been overlooked by the management of the company. If you need to know more about shareholder oppression suits, please do not hesitate to contact us.

There is a perception that because of the unenforceable nature of mediation as a method of dispute resolution it is doomed to failure. However there is significant empirical evidence that indicates that mediation is a very effective method of dispute resolution. Across a wide of jurisdictions, in family law cases research indicates that mediation is effective in between 50% and 85% of cases with participants satisfied as to the procedure and outcomes involved.

In the context of family law, mediation is seen to be particularly effective because of the way in which mediation promotes the self-determination of the parties in a context where the discussions are confidential. It also has the marked advantage of giving the parties to the dispute the sense of being listened to in a way which simply cannot be achieved through formal litigation.

In relation to matters outside the realm of family law, mediation remains an effective dispute resolution mechanism although perhaps not at the same levels as is the case in family law. However, participants recognise the same advantages as in the case of family law participants. Parties recognise that mediators listen to the parties concerns and give them the opportunity to voice their concerns in front of a third independent party. Participants in the mediation process also report a greater sense of control over the mediation process than they have in relation to other types of dispute resolution, particularly, litigation which tends to be dominated by the procedural emphasis of courts.

Another type of dispute settlement is known as arbitration. Arbitrators decisions are binding on parties but are not arrived at using the same formal rules of evidence as in courts. In smaller civil claims jurisdictions, arbitration has a very good track record in terms of achieving dispute settlement when compared with traditional litigation. Research conducted on the claims records of the District Court in New South Wales, Australia clearly indicates this. Overall, the research indicates that mediation and arbitration are extremely effective methods of dispute resolution which achieve this outcomes by reducing average settlement times and increasing settlement rates whilst achieving the a substantially reduced caseload for the traditional court system. Many of the jurisdictions inundated by their case loads such as the family law jurisdiction and increasingly the estates jurisdiction are utilising mediation and arbitration as effective family law and estate litigation disputes settlement procedures, respectively.

If you are investing in a business or considering the formation of a new business there is a lot to consider. Aside from deciding what business structure your business or investment in a business is to have, one of the most important things to consider is a shareholder’s agreement. A shareholder’s agreement is a contract between the shareholders of a company which sets out their rights and obligations in relation to each other and the company. It would be helpful to consult an expert in corporate law to have better understanding about shareholder’s agreement and forming a business.

It gives the investors certainty on a number of issues like the appointment of directors and their terms of engagement, share buy back and/or ‘drag along’ or ‘tag along’ provisions. Other issues which might be addressed include insurance for directors, the terms on which new subscriptions of shares can be made, the quorum for board meetings, the payment of dividends, the sale of shares, how loan accounts with the company are to operate, confidentiality issues and the jurisdiction of law in which the company is to operate.

You will also often need to look at the company constitution in order to verify that there is not a conflict with the constitution of the company. Many companies have simply adopted the replaceable rules of the Corporations Act 2001 (Cth) but others haven’t and in the case where the constitution is non-standard it is necessary to review both the shareholder’s agreement(s) and the company constitution to adequately understand what the rights and obligations of shareholders are in relation to the company and the other shareholders.

We have fixed fee shareholder agreements available which we can draft for you when you are in the process of setting up a business or if you need to amend a shareholder agreement can assist with the process of drafting a deed of amendment to a shareholder agreement. Please do not hesitate to contact us if you would like more information about shareholder agreements.

Assisted Reproductive Technologies are becoming more and more common treatments. It extends the ability of human beings to create families in later life and where medical issues prevent a traditional pregnancy. Surrogacy is the result of a medical procedure which can take three different forms. Full surrogacy (also known as Host or Gestational) involves the implantation of an embryo created using either:

– the eggs and sperm of the intended parents
– a donated egg fertilised with sperm from the intended father
– an embryo created using donor eggs and sperm.

Partial surrogacy (also known Straight or Traditional) – Partial surrogacy involves sperm from the intended father and an egg from the surrogate. Here fertilisation is (usually) done by artificial insemination or intrauterine insemination (IUI).

There can be a variety of medical reasons and conditions that create the need for a surrogacy arrangement but in legal terms, the upshot is that surrogacy is a sensitive area which must be handled carefully to avoid implications for the genetic parents, birth parents and the children concerned. In New South Wales and most states around Australia, commercial surrogacy is illegal meaning that any person in these states must not engage in a commercial surrogacy arrangement. However, altruistic surrogacy arrangements are legal although there are a series of requirements that include:

(1) The surrogacy arrangement be in writing;
(2) Each of the parties obtain independent legal advice on the terms of the arrangement;
(3) The surrogate must be over 25 years old at the time of making the agreement;
(4) Each of the affected parties must have received counselling from a qualified counsellor about the surrogacy arrangement and its social and psychological implications before entering into the surrogacy arrangement.
(5) The birth mother and the birth mother’s partner (if any) must have received further counselling from a qualified counsellor about the surrogacy arrangement and its social and psychological implications after the birth of the child and before consenting to the parentage order.

International surrogacy is an area involving a whole new level of complexity. If an expatriate goes overseas and adopts a child according to the laws of a foreign country, that adoption will generally not be recognised in Australia. It can only be recognised where it conforms to the requirements of the International Convention on Intercountry Adoption which Australia is a signatory to.

Immigration requirements must also be considered for international surrogacy arrangements. Lincoln Goldfinch Law is a reputable immigration law firm you can reach out to for guidance and assistance. Unless a biological link with a citizen can be proven by DNA test, the child will need to pass the necessary immigration requirements to enter without the benefit of citizenship by descent which is available to children where it can be proven that a child has been born to a citizen. This makes it very rare for children born to an international surrogacy agreement without a biological link to an citizen to be eligible for entry  on a permanent basis or for them to become a citizen by descent. As for those entering the country on the basis of employment, there are legal experts that can assist in acquiring an h1b visa in order to do so legally. Contact migration agent in perth your trusted visa experts.

If you have a question about international surrogacy arrangements, we are more than happy to help. Please do not hesitate to contact us.