Key Legal Documents Start-Ups Should Engage Lawyers (Not AI) to Draft

June 11, 2025

Launching a start-up in Australia is an exciting venture, but it also involves navigating a complex legal landscape. Engaging a lawyer to draft and review your foundational legal documents is crucial for protecting your interests, ensuring compliance, and setting your business up for long-term success. Below is a guide to the key legal documents every Australian start-up should consider, and why professional legal drafting (and not AI) is essential.


1. Company Constitution


Sets out the rules for governing your company, including director powers, shareholder rights, and meeting procedures. A well-drafted constitution tailored to your business can prevent future disputes and ensure compliance with the Corporations Act.


2. Shareholders Agreement (or Partnership Agreement)


Defines the rights and responsibilities of founders and investors. Covers share transfers, dispute resolution, exit strategies, and decision-making processes. Essential for start-ups with multiple founders or external investors to avoid misunderstandings and future conflicts.


3. Employment Agreements and Contractor Agreements


Clearly set out roles, duties, remuneration, confidentiality, and intellectual property ownership for employees and contractors. These agreements must comply with Fair Work legislation and other employment laws. Proper agreements help prevent disputes and clarify expectations.


4. Confidentiality and Non-Disclosure Agreements (NDAs)


Protect sensitive business information, intellectual property, and trade secrets when dealing with third parties, potential investors, or collaborators. NDAs are critical in the early stages of product development and fundraising.


5. Intellectual Property (IP) Assignment Agreements


Ensure that any intellectual property created by founders, employees, or contractors is legally owned by the company. This is vital for protecting your brand, technology, and other intangible assets.


6. Website Terms & Conditions and Privacy Policy


Terms & Conditions set the rules for users interacting with your website or app, limiting liability and setting out acceptable use. A Privacy Policy is legally required if you collect personal information, ensuring compliance with the Australian Privacy Act. Both documents are essential for online businesses and e-commerce start-ups.


7. Supply, Service, and Client Agreements


Define the terms of business with suppliers, customers, and service providers. Include payment terms, delivery obligations, warranties, and dispute resolution mechanisms. Well-drafted contracts reduce the risk of costly disputes and ensure clarity in commercial relationships.


8. Employee Share Scheme (ESS) Documentation


If you plan to offer equity to employees, clear documentation is required to comply with tax and corporate regulations. Lawyers can help structure schemes that attract talent while protecting the company.


9. Fundraising and Investment Documents


Includes term sheets, share subscription agreements, convertible note deeds, and loan agreements. Proper documentation ensures compliance with fundraising laws and protects both the company and investors during capital raising rounds.


10. Company Registration and ASIC Filings


Lawyers can assist with registering your company, obtaining an Australian Company Number (ACN), and ensuring all ASIC filings are accurate and timely. This includes drafting documents required for company formation and ongoing compliance.


Why Engage a Lawyer and Not AI for These Documents?


Inaccurate or Incomplete Clauses or Drafting: AI can miss critical legal terms or misunderstand your business context, leading to unenforceable or non-compliant agreements or documents.


False Sense of Security: AI-generated contracts may look professional but can be legally flawed or outdated, increasing the risk of disputes.


Lack of Customisation: AI cannot account for your unique business model, industry, or risk tolerance, leading to generic agreements that don’t fit your needs.


Regulatory Compliance Risks: Australian laws are complex and change frequently. AI tools may not capture all compliance requirements, exposing your start-up to fines or litigation.


Poor Drafting from Bad Inputs: AI is only as good as the information provided. Vague or incomplete instructions can result in agreements that do not reflect your intentions.


Conclusion


While AI tools and templates can be helpful for simple, low-risk documents, start-ups in Australia should always engage an experienced lawyer to draft or review critical legal agreements and documents. This ensures your business is protected, compliant, and set up for long-term success. Investing in legal expertise at the outset can save your start-up from costly mistakes and disputes down the road.

How Getting Married or Divorced Can Revoke Your Will

September 3, 2025
A person's Will in Western Australia is generally revoked by marriage or divorce, unless it's made with their specific intention to marry or divorce clearly stated in the Will (or there is other evidence which establishes this intention). What Happens If You Get Married Under section 14 of the Wills Act 1970 (WA), marriage automatically invalidates your existing Will, unless your Will expressly states it was made "in contemplation of marriage" to your intended spouse. If your Will is invalid and you pass away, your assets will be divided according to WA's intestacy laws, which may not reflect your wishes. The best practice is to obtain a new Will after marriage to ensure all your assets and intentions for your loved ones are protected. What Happens If You Get Divorced Section 14A of the Wills Act 1970 (WA) outlines that divorce also cancels your Will unless your Will shows a clear intent for it to remain valid after divorce. Practically speaking, the automatic revocation in section 14A makes sense, as it is unlikely that you would still want to appoint your former spouse as the Executor of your Will, or provide for them from your estate, after you have divorced. However, if you do not update your Will after divorce, there may be unintended consequences, such as assets going to your ex-spouse or confusion and disputes among family members. Why Updating Your Will Matters Failing to update your Will after marriage or divorce can lead to estate mismanagement, litigation, or your wishes not being honored. If your relationship status has changed, make an appointment to create or update your Will so all provisions accurately reflect your current wishes and protect your loved ones. This is especially important for blended families, business succession planning, and unique asset structures. Get A Will That Reflects Your Changed Circumstances At Crabtree Legal, a veteran-owned and operated law firm in Perth, we pride ourselves on delivering expert, practical advice and drafting for Wills, estate, and succession matters. If you or anyone you know has recently married or divorced, please refer them to us—it may be time to get a new Will to ensure their wishes and family's future are protected.

Why Every Parent Should Nominate a Legal Guardian for their Minor Children in their Will

August 27, 2025
Nominating legal guardians for minor children in a Will is a critical act for every parent, providing clarity and security for children should the unimaginable occur. Without clear instructions, the law dictates who may look after minor children, often leading to uncertainty, potential family disputes, and complex legal proceedings. Why Appoint Legal Guardians in Your Will Putting a nomination for legal guardianship in your Will ensures that trusted people—whose values, beliefs, and care align with your wishes—can support and protect your children if both parents pass away. This appointment is a proactive step, sparing children from needless disruption and emotional harm during an already traumatic period. It also guides family and courts, minimising delays and potential disagreements. Who May Look After Children Without a Named Guardian If neither parent has nominated a legal guardian in their Will, Western Australian law applies. Usually, the closest surviving relatives, such as grandparents, aunts, uncles, or older siblings (if they are adults), might step forward to care for the children. However, these individuals do not gain automatic legal guardianship. Often, more than one person may seek this role, leading to possible disputes and, in some cases, involvement by the Department of Communities (Child Protection) if no suitable family members exist or agree. Legal Steps to Obtain Guardianship in WA Application to the Court : if a suitable person wishes to become a minor’s guardian, they must apply to the Court. Assessment by the Court : the Court will consider the child’s welfare and best interests above all else, assessing the applicant’s capacity, relationship with the child, and any competing claims from other relatives or interested parties. Possible Departmental Involvement : if no clear family candidate exists, or if there are concerns about the candidates, the Department of Communities may become involved, and the child may be placed in State care, at least temporarily. The absence of a Will nomination can lead to delays, uncertainty, and the risk that decisions are made by those unfamiliar with the family’s wishes. The surest path is to name trusted guardians in your Will, providing certainty for your children’s future care and stability. For tailored, practical succession planning advice—including the nomination of legal guardians—please contact Crabtree Legal.

What Happens to Your Estate If You Die without a Will in Western Australia (after 5 July 2025)

August 17, 2025
Making a Will is the best way to ensure your assets and wishes are respected after your passing. But what happens if you die without a Will in Western Australia? The law refers to this situation as “dying intestate”, and your Estate will be distributed according to strict rules set out by the Administration Act 1903 (WA) , specifically section 14. This can have unexpected consequences for your loved ones, and may not reflect your wishes. How Is Your Estate Distributed Under Section 14 of the Administration Act 1903 (WA)? When someone passes away without a valid Will in WA, their estate is distributed to eligible relatives in strict proportions prescribed by law. The following summarises how assets are distributed, depending on which family members survive you: Spouse/de facto partner only = all to spouse/de facto partner. Spouse/de facto and child(ren) of both = $546,000 ( as at 5 July 2025 ) plus one-third to spouse; remaining two-thirds equally between children. Spouse/de facto and child(ren) (not all shared) = $546,000 ( as at 5 July 2025 ) plus one-third to spouse; remaining two-thirds equally between children (including any from other relationships). Spouse/de facto and no children, but parents and siblings (or nieces and nephews) = $815,500 ( as at 5 July 2025 ) plus half to spouse; with the remaining half a first amount of $65,500 ( as at 5 July 2025 ) to the parents and the rest equally between parents and siblings (or nieces and nephews). Children and no spouse/de facto = all equally among children. No spouse, no children, but parents only = all to parents. No spouse, no children, but parents and siblings (or nieces and nephews) = first amount of $65,500 ( as at 5 July 2025 ) to the parents and the rest equally between parents and siblings (or nieces and nephews). No spouse, no children, no parents, but siblings (or nieces and nephews) only = all equally to siblings (or nieces and nephews). No spouse, no children, no parents, no siblings, but grandparents = all equally among grandparents. No spouse, no children, no parents, no siblings, no grandparents, but aunts and uncles (or cousins) = all equally among aunts and uncles (or cousins). No eligible relatives = your Estate goes to the State of Western Australia. Why Is Intestacy Often a Problem? If you die without a valid Will, you lose control over who receives your assets. For example: Your spouse might have to share your Estate with children from another relationship, causing stress and uncertainty. Children, parents or siblings might inherit more (or less) than you intended. People you care about may miss out completely—such as stepchildren, friends, or charities. Disputes and delays are far more likely. Secure Your Legacy—Plan Ahead If the default rules above are not what you want for your loved ones, the best solution is to prepare a legally valid Will that reflects your wishes. Contact Crabtree Legal Today As a veteran owned and operated law firm based in Perth, WA, Crabtree Legal is ready to help you: Draft a Will tailored to your unique circumstances. Advise on Estate Planning, including Superannuation and Trusts. Create Powers of Attorney and Guardianship documents.