[ESTABLISHING A BUSINESS ENTITY IN AUSTRALIA]
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Third Line Forcing: Where a business will only agree to supply goods or services to another party on the condition that the party who receives those goods or services also purchases goods or engages the services of a particular third party. Full Line Forcing: Where a supplier refuses to supply goods or services unless the receiving party agrees not to purchase certain other goods or services from the supplier’s competitors. Price Maintenance - Resale price maintenance occurs when a supplier prevents, or attempts to prevent, a business (such as an independent retailer or distributor) from advertising or selling products below a specified minimum price. Suppliers are permitted to specify a recommended retail price for their products, however the CCA prohibits suppliers from threatening not to supply goods if those goods are not sold at the recommended retail price, or from otherwise exerting pressure on retailers to sell the goods at a specified price. Prohibition on Resale Prohibition on Unconscionable Conduct – Unconscionable conduct is a very broad concept that does not have a precise legal definition in the CCA. Broadly speaking, the CCA prohibition on unconscionable conducts seeks to prohibit business conduct that is harsh or oppressive, and that extends beyond the ambit of commercial bargaining or negotiation tactics. and Deceptive Conduct – The CCA prohibits persons from, during trade or commerce, engaging in conduct that is Prohibition on Misleading
misleading or deceptive or that is likely to mislead or deceive. Australian Courts have historically taken a very broad approach in determining the types of conduct that may be misleading or deceptive, which can include activities such as advertising, oral representations, as well as representations in respect to contractual matters. Product Liability – Businesses that manufacture goods or import goods into Australia for the purposes of resale will be liable to consumers for any safety defects in respect of the goods. The CCA provides that consumers may seek compensation from a manufacturer in respect of goods which have safety defects, if it can be established that the defects have caused the consumer to suffer loss or damage.
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International Trading Considerations Individuals or entities that conduct businesses in Australia with the intention of trading internationally should also familiarise themselves with the following concepts: ● Transfer pricing – Australia’s transfer pricing regime requires that international related-party transactions must be made on arms’ length terms. The primary purposes of the transfer pricing rules are to ensure that the consideration exchanged by the relevant related parties has been agreed on the basis of an acceptable pricing methodology, to ensure an appropriate level of tax is paid.
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Customs duty - Customs duty is imposed on goods imported into Australia. The rate of customs duty is generally around 5% of the value of goods (when converted to Australian dollars), depending on the type of goods being imported and the country of origin. GST may also be applied
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ILN Corporate Group – Establishing a Business Entity Series
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