Australia’s investment regime is in a constant state of flux, introducing new changes to the financial framework that make equity investment complicated. This muddies the water for individuals and businesses new to equity law. Surviving as a business is tough enough without the added burden of navigating around these laws.
This is where equity lawyers come in. By helping you not only stay on top of these regulatory changes but also comply with them, equity lawyers make sure you stay on the right side of the law at all times.
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Equity Laws in Australia – At a Glance
Equity laws govern how individuals and companies can operate their funds, which are collected from investors. Private equity firms use this money to purchase other assets or companies, and sell them for a much higher price. Often times, the firm also takes a significant sum of credit from banks to make the purchase, also known as a leveraged buy-out (LBO).
Private equity can be an extremely reliable source of revenue for you. But there’s a caveat attached with it.
You must be aware of the legal risks involved in the transfer of equity. This will ensure you have years of profitability ahead of you – safe in the knowledge that no one can challenge your decisions in a court of law. This is extremely important because criminal and civil penalties have been escalating in recent years.
So what role do equity lawyers in Australia play?
Rather than represent yourself or your partners in the transaction, you can facilitate the process much quicker by hiring an equity lawyer. Your attorney can provide valuable advice on purchasing private equity legally and in a way that cannot be litigated, contested, or cancelled in court.
Lawyers who specialize in equity law can play two distinct roles:
i) they construct the legal framework that forms the fund in the first place and helps the firm properly negotiate the terms through which investors can use their funds.
ii) they represent the fund when it buys and sells investments.
Legal Purchases Done Within the Legal Framework
Experienced private equity lawyers will be well versed in the process of fund formation and regulatory compliance for businesses. Without the advice of an attorney who specializes in mergers and equity, your move could be misconstrued as hostile and even unlawful.
In the case of mergers, if the private company has a board of directors or stockholders, they are well within their right to challenge your purchase in court and argue that your purchase had no legal basis.
Your equity lawyers in Australia, however, can advise you on the legitimate way to purchase equity in accordance with the law. Think of it as insurance against liability in court. If anyone challenges your purchase in court, they won’t get very far.
Legal Reorganization of Company Done in 100% Regulatory Compliance
In case you want to remove stockholders from your company or want to recognize it, you can hire private equity lawyers to advise you about the best course of action. Your lawyer can act as your intermediate between your stockholders and communicate your plans to restructure the company.
Your attorney can also provide options to anyone who may want to cash out and leave the company before you restructure it.
They take you through a path of least legal resistance to ensure you can reorganize your company in compliance with regulatory requirements. You can also plan the future of your company to ensure it stays a lucrative source of income for you and your business partners for years to come.
Wrapping Up
There is a long range of technical fixes including treatment of equity transactions resulting in incidental increase in ownership as a result of share buybacks and capital reductions.
At Chamberlains, we have extensive experience in making sure your financial decisions are made in complete legal compliance. We have in-depth experience across a vast spectrum of accounts and have learnt to apply the right tactics to deliver your investment objectives.
Our team helps companies and individuals solve complex transactions in public and private domains. We bring disciplined, experienced, and highly trained equity lawyers to large corporate deals.
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