Commercial Law FAQs

No. Under the Australian Consumer Law in Schedule 2 of the Competition and Consumer Act 2010 (Cth), a business acquiring software is deemed a consumer if the price does not exceed $100,000, or if the software is of a kind ordinarily acquired for personal use. The statutory consumer guarantees apply and cannot be excluded. A SaaS vendor must instead use s 64A to limit liability to the resupply of the services, and ensure their liability caps do not breach the strict unfair contract terms regime.

Under the Corporations Act 2001 (Cth), raising capital without a disclosure document is a criminal offence unless a statutory exemption applies. Startups typically rely on the small scale offering exemption under s 708(1), which permits raising up to $2 million from a maximum of 20 investors in any rolling 12-month period. The sophisticated investor exemption under s 708(8) allows unlimited offers to individuals who hold a qualified accountant’s certificate confirming net assets of at least $2.5 million or gross income of at least $250,000 for the past two years.

For high-growth technology startups, a dual-company structure is the industry standard. This involves a Holding Company (HoldCo) that owns all intellectual property, source code, and trade marks, and an Operating Company (OpCo) that conducts the day-to-day business, employs staff, and signs SaaS contracts. The HoldCo licenses the IP to the OpCo, quarantining the core software assets from the commercial liabilities and insolvency risks of the operating entity under the Corporations Act 2001 (Cth).

The Personal Property Securities Register (PPSR) records security interests in personal property under the Personal Property Securities Act 2009 (Cth). If your startup uses a HoldCo/OpCo structure, the HoldCo must register its security interest over the intercompany IP licence on the PPSR to protect it from the OpCo’s liquidator. If you supply physical goods on retention of title terms, failing to register a Purchase Money Security Interest (PMSI) on the PPSR means you will lose those goods if your customer enters liquidation.

Where a creditor is owed a liquidated debt of $4,000 or more by a company, they may serve a statutory demand under s 459E of the Corporations Act 2001 (Cth). If the debtor company fails to pay the debt or apply to set aside the demand within a strict 21-day period, the company is presumed insolvent. The creditor may then apply to the Supreme Court to wind up the company. It is a highly effective debt recovery tool, but requires precise drafting to avoid being set aside.

To succeed in a debt recovery claim under Queensland civil procedure, you must prove on the balance of probabilities, that is, that it is more likely than not (the required civil standard of proof of 51%), that money changed hands and that it was intended as a loan rather than a gift.

Written loan agreements are the strongest form of evidence, but Queensland courts and QCAT will accept any contemporaneous written record, including text messages, emails, bank transfer records with reference descriptions, and written acknowledgments of the debt.

The Personal Property Securities Register (PPSR), established under the Personal Property Securities Act 2009 (Cth), allows any person with a security interest in personal property, including a vehicle, to register that interest against the asset’s serial number.

To secure a private loan against a vehicle, you register your interest on the PPSR. Once registered, your security interest is visible to any person conducting a PPSR search, commonly known as a REVS check, and takes priority over later registered interests and unsecured creditors. If the borrower defaults or sells the vehicle, your registered security interest means the vehicle is sold subject to your interest, and the proceeds must satisfy your debt before any surplus passes to the seller or their creditors.