7th Australia New Caledonia Business Forum Brisbane 8 July 2011

Know your partner Protect your assets Manage the relationship

Certificate of registration: –Type of entity –Management –Solvency Choose your structure: –Branch/ company

Advantages –Cheap to set up / run –Local knowledge –Confidence with clients and authorities –IP remains with Australian entity –Direct control by head office Disadvantages –Direct commercial and legal risk –Management of double taxation impact on local profits –No local partner other than as employee

Advantages –More permanent –More confidence with local clients and authorities –Local partner possible –Liability limited to local market Disadvantages –More expensive to run –Statutory regime to comply with –More complex contractual set-up with mother company

No limitation on nationality of shareholders No limit on foreign investment French particularities: –Share capital: Minimum amount, obligation to pay up at incorporation Contributions: cash / assets / labour –Company tax or shareholder taxation

SARLSASSA Full name Société à responsabilité limitée Société par actions simplifiée Société anonyme Equivalent in Australia Pty LtdSimplified LtdLtd Members Min.1 and max.100 Individuals Corporate entities Min. 1 Individuals Corporate entities Min. 7 Individuals Corporate entities Liability of members Limited Share capital requirement Min. $ 1 Min. $ 54,000 Contributions One or more managers Director(s) incl. “President” Choice of management structure Board of directors Chairman of Board General Director (executive) For convenience, amounts are converted into Australian dollars

Protecting your assets overseas Managing your overseas team Managing shareholders relations

Industrial/Intellectual property –Key asset –Register trademarks/ logo/ patents/ designs/ domain names etc. over the territory –Ascertain which entity is the owner of the IP –Set up a licence contract with local entity

No compete clause –Local joint venture partner: In a shareholders’ agreement In a management agreement –Local staff: In employment contracts –Must be reasonable and limited as to area, duration and type of activity

Retention of title clause: –Easier reclaim of unpaid goods or equipment –Must be express –Only applies to identifiable goods/equipment

Confidentiality clause No compete clause Reporting Scope and limits of authority –In employment contract –In constitution of local company Assumption of broadest authority with third parties Joint managers If exceeds authority: remedies

Key clauses –In shareholders’ agreement, constitution or in management agreement –Clauses: Duties, scope of authority Reporting Sale of shares, change of control No compete Confidentiality

Constitution Shareholders’ agreement Statutory regimeContractual Less flexibleVery flexible Easy to enforceMore difficult to enforce Damages / Injunction / Specific performance Damages Not confidentialConfidential Heavy process to amendEasy to amend or to join

Suppliers and clients Employment contracts Joint venture issues

Clients and suppliers –Term: fixed/ indefinite / auto renewal –Termination: notice –Default: insolvency etc –Force majeure –Hardship –Dispute resolution

Employees –Contract –The law prevails –Compliance with due process –Factor in the risk at the start: consultant or employee?

Joint venture –Default –Sole risk project –Pre-emption rights –Tag-along/drag-along

Application of Australian laws: –Consumer Law (formerly Trade Practices Act) –Jurisdiction clause –Restricted to cross-border relationships

Different legal system: Check the local environment and your partner Assets and goodwill: Protect your business Manage the relationship: Respect the local process and legal constraints

Véronique Morgan-Smith Director Solicitor – NSW Avocat – France NAATI Translator Practice areas Commercial and Corporate Corporate Governance Mergers & Acquisitions Resources and Energy IT  Sydney  +61 (0) Julie Miehe Managing Director Solicitor - NSW & QLD Juriste – France Practice areas Commercial and Corporate Mergers & Acquisitions Corporate Governance Resources and Energy Tourism Brisbane +61 (0)