Question 1

Why is insurance needed?

Accepted Answer

If the Company does not have sufficient funds to buy back the shares of the outgoing shareholder it will need other means of financing which could include borrowing but common practice will see the Directors insuring for life, permanent incapacity and potentially trauma to provide funding for the share acquisition by continuing shareholders.

Question 2

I have an old Buy/Sell agreement, can it be updated?

Accepted Answer

Yes, provided all parties agree to any new terms and the lives of the shareholders remain insurable.

Question 3

How long does this document take to assemble?

Accepted Answer

Depending on the complexity of the data, this document should take approximately 10-25 secs to assemble. If you experience timing outside of this please contact Support via the Surge app, alternatively please read this article for troubleshooting tips https://info.lightyeardocs.com.au/supportcentre/troubleshooting-longer-assembly-times-timeouts .

Question 4

Do you have details on the LYD EPOA that I can give my clients?

Accepted Answer

We have a client newsletter that covers the use of an EPOA.

Question 5

As an accountant or financial planner can I complete this document on behalf of my business clients?

Accepted Answer

Yes. The documents have the legal sign off of LY Legal and the interview process is locked down ensuring only names and addresses of parties are inserted, thereby the adviser does not create a legal document. However the client has a legal document with the full force of contract law.

Question 6

Is it expensive?

Accepted Answer

No. Like all LYD the Buy/Sell Option agreement is only $99. It is a legal contract and provides an important exit strategy for outgoing shareholders and their family in the event of their death and permanent incapacity.

Question 7

My shares are held in a family trust, does that matter?

Accepted Answer

If shares are held in a trust then there is additional legal work to be completed and this agreement will not cater for that directly. Please contact Tony Anamourlis of LY Legal - tanamourlis@tgalegal.com.au for advice.

Question 8

We don’t have a shareholders agreement in place – does that matter?

Accepted Answer

You should put in place a comprehensive shareholder's agreement and this can be completed through LY Legal. Please contact Tony Anamourlis of LY Legal - tanamourlis@tgalegal.com.au for advice.

Question 9

Is this document a legal document?

Accepted Answer

All master documents have been signed off by LY Legal lawyers. Tony Anamourlis of LY Legal advises that “at no time, due to inbuilt legal protection and security measures can a user change or amend a document on the LYD platform that has been signed off by a practicing solicitor. To do so would result in the user drafting a document of a legal nature and engaging in the provision of legal services. In addition, it would be a breach of copyright. In our opinion when completing the form fields through the LYD platform, users and their employees are merely carrying out an administrative task which is not the provision of legal advice.”

However in some complex areas such as the insertion of a varied range of client instructions into a Will or other such documents the user must be mindful of the extent to which a document is being drafted by the user rather than merely the administrative task of completing a form where the relevant fields are inserted into the reviewed and signed legal document provided by LY Legal.

The above advice is born out of numerous cases dating back to Re Sanderson, Ex parte Law Institute of Victoria [1927] VLR 394, 397 where the Court held:

“if a person does a thing usually done by a solicitor, and does it in such a way as to lead to the reasonable inference that he is a solicitor – if he combines professing to be a solicitor with action usually taken by a solicitor – I think he then does act as a solicitor.”

Likewise in ACCC v Murray (2002) 121 FCR 428, 448 where Murray was building a franchise business that involved the legal writing and drafting of Wills from scratch based on the client’s personal circumstances. The Court held that this process was legal work.

Question 10

Is the document easy to read?

Accepted Answer

All LYD products are written in plain English and assessed for readability. If at any time you come across any errors, please contact support@lyd.com.au.

Question 11

What lawyers sign off on LYD documents?

Accepted Answer

All LYD documents are prepared and signed off by LY Legal.

Question 12

Are the LYD documents reviewed regularly?

Accepted Answer

All LYD documents form part of the LYD internal review process. We review all documents at least annually or when required to do so due to changes in legislation. Further details of this process and a review schedule is include on this website.

Buy/Sell Option Agreement