Merton Journal
At Merton, understanding starts by arming you with tools and resources to better navigate your next steps in law, business and life.
The ‘right to disconnect’ is coming to Australia: what employers need to know
New right to disconnect laws commenced on 26 August 2024 for non-small business employers. Small business employers – which are businesses with fewer than 15 employees – will be subject to the changes one year later from 26 August 2025.
Recent reform to unfair contract terms laws
Amendments to the Australian Consumer Law (ACL), contained in Schedule 2 of the Competition and Consumer Act 2010 (Cth) (CCA) and the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) were passed in October 2022 to the effect that making a standard form contract which contains unfair terms, or relying on an unfair term is now illegal.
Common Traps and Pitfalls for Early-Stage Startups to Avoid
Building and launching a startup is not for the faint of heart. Founders of startups face significant legal and business challenges. However, there are ways that founders can minimise (and in some cases, eliminate) these challenges.
SAFE Notes Explained
SAFE is an acronym for simple agreement for future equity. Like the name suggests, a SAFE Note is an equity financing instrument designed to accelerate the seed funding round for startups. It is a short, standard document used by entrepreneurs and investors as an alternative to convertible debt.
Cofounder Agreements: the most underrated document in the startup ecosystem
Cofounder agreements are perhaps the most underrated document in the startup ecosystem. It is not uncommon for a startup to be reluctant to spend money on lawyers in the early stages. Why spend money on drafting agreements when there isn’t any money coming in yet?
But antagonism between cofounders can be the difference between the failure or success of your startup. According to Noam Wassermann, author of The Founder’s Dilemma, 65% of startups fail due to founder conflict.
That’s where a cofounder agreement comes in.
Drag along and tag along rights in Shareholders’ Agreements
Drag along and tag along rights are important forms of investment realisation in shareholders’ agreements. Tag along rights protect minority shareholders in the event that a majority shareholder (or a group of shareholders representing a majority) exits the company. Drag along rights, on the other hand, favour majority shareholders (or group of shareholders representing a majority) who want to compel minority shareholders to join a sale.
Reserved matters in Shareholders’ Agreements
Reserved matters are key decision-making powers that are reserved in a shareholders’ agreement for the shareholders of a company. They ensure that certain matters or actions cannot be undertaken by the company or its subsidiaries without the approval or special majority of the shareholders.
Restraint clauses in Shareholders Agreements
A shareholders agreement may include restraint clauses which seek to prevent a shareholder from competing with the company, disclosing confidential information and/or soliciting the company’s clients or employees.
Exit mechanisms and options in Shareholders’ Agreements
Exit mechanisms and options refer to the provisions and processes included in shareholders’ agreements which enable shareholders to exit a company and/or dispose of their shares. Exit mechanisms and options are crucial components of shareholders’ agreements because they provide shareholders with a means of realising the value of their investment in the company and provide a mechanism for transferring ownership of the company to new investors and shareholders.
Employee or Independent Contractor?
As a founder, registering a trademark may not be your top priority, but it's critical to protecting your brand and intellectual property. A trademark is a symbol, logo, or word that distinguishes your company and its products or services from others. It’s essential to ensure the continuous success of your brand, and a registered trademark makes it much easier to protect your own properties and prevent others from duplicating them. However, there are several things to keep in mind before you register your trademark. Read on for our founder’s guide to registering a trademark.
The Importance of Registering a Trademark: A Founder's Guide
As a founder, registering a trademark may not be your top priority, but it's critical to protecting your brand and intellectual property. A trademark is a symbol, logo, or word that distinguishes your company and its products or services from others. It’s essential to ensure the continuous success of your brand, and a registered trademark makes it much easier to protect your own properties and prevent others from duplicating them. However, there are several things to keep in mind before you register your trademark. Read on for our founder’s guide to registering a trademark.
Understanding Product-Market Fit: What It Is and Why It’s Important
Creating a successful product or service requires more than just an innovative idea. It must also answer a fundamental question: does it fit the market? This is where product-market fit comes in. Product-market fit is the alignment of a product or service with the needs and preferences of the target market. It’s the ability of a product to meet customer demands and solve their pain points. In short, it’s the key to success for any startup. In this article, we'll explore what product-market fit is, why it’s so important, and some examples of successful and unsuccessful product-market fit.
Board composition clauses in shareholders’ agreements
A well drafted shareholders’ agreement will include provisions pertaining the composition of the board of directors. Board composition clauses are essential for determining the governance structure and management of a company and play a crucial role in protecting the interests of shareholders.
What types of deadlock clauses are used in Shareholders Agreements?
Deadlocks between shareholders can be costly, time-consuming and detrimental to the success of a business. A deadlock occurs when the shareholders of a company cannot agree on a decision and no side has the majority vote, leading to stalemate in the company’s operations and decision-making.
Understanding the Difference Between an Australian Company Constitution and a Shareholders Agreement
One of the most important things to consider when forming a company in Australia is the legal documentation that you use to govern the business. Many founders and investors make the mistake of relying solely on the Australian company constitution, failing to recognize that it may not provide the depth of protection that they need. If you want to ensure that your company is protected, then it is essential to understand the difference between an Australian company constitution and a shareholders agreement.
The Benefits and Disadvantages of Employing the Lean Startup Methodology in Business
The Lean Startup Methodology revolutionized the way startups are launched and sustained. This agile approach has been swiftly adopted by many businesses worldwide, resulting in significantly more efficient and cost-effective operations. However, despite its evident benefits, the Lean Startup Methodology may not be the perfect fit for every business. In this article, we will explore in detail what the Lean Startup Methodology is and weigh its pros and cons compared to other traditional business strategies.
Important Updates to Australian Employment Law
Australia’s employment law is ever-changing with minor and major updates each year. There have been some changes that affect all industries. It is important for employers to stay up to date with these changes to ensure employment agreements are current and enforceable.
What are pre-emptive rights in shareholders agreements?
Pre-emptive rights ensure fairness in the issuance of new shares by allowing existing shareholders to acquire shares prior to those shares being offered to third parties.