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.

Protecting Your Children’s Inheritance from Divorce with Testamentary Trust Wills: The Bernard v Bernard Case

November 9, 2025
At Crabtree Legal, we understand that protecting your children’s inheritance from potential relationship breakdowns is a crucial concern for many families. The landmark Family Court of Australia decision in Bernard and Bernard [2019] FamCA 421 confirmed that testamentary trust Wills can be an effective tool in safeguarding a beneficiary’s inheritance from being divided upon divorce. Background of the Case In Bernard v Bernard, the husband’s late father created two discretionary testamentary trusts through his Will — one for his son and one for his daughter. The trusts operated as “mirror trusts”: each sibling was the trustee of the other’s trust but had no control over their own trust. The husband was the primary beneficiary of his trust, but the assets were legally owned and controlled by his sister as trustee. When the husband and wife later separated and divorced, the wife sought to have the husband’s inheritance held in the testamentary trust included in the matrimonial property pool for division. However, the husband argued that since he did not legally own or control the trust assets, and his interest was solely as a beneficiary dependent on the trustee’s discretion, the inheritance should be excluded from the property pool. Court’s Decision and Key Findings The Family Court ruled in favor of the husband, finding that the assets in the testamentary trust were not part of the matrimonial pool. The court’s key reasoning was that: The husband was not the settlor of the trust—the deceased father was. The husband had no legal ownership or control over the trust assets. The trustee (the husband’s sister) had complete discretion over income and capital distributions. The husband’s interest was discretionary and not guaranteed, meaning he could not compel distributions. The trust assets were inherited and not acquired during the marriage. This decision confirmed that a properly structured testamentary trust can protect a beneficiary’s inheritance from being divided upon divorce by separating legal ownership and control from mere beneficial interest. Why This Matters for Your Estate Planning Bernard v Bernard highlights how testamentary trust Wills can be used to safeguard your children’s inheritance from future relationship breakdowns, ensuring that inherited assets remain protected within the family and are not treated as divisible property in the event of a divorce. At Crabtree Legal, we specialise in Wills incorporating testamentary trusts and can provide tailored advice and drafting services to help you protect your family’s wealth across generations. Contact Crabtree Legal Today If you want to ensure your children’s inheritance is protected from a future divorce or relationship breakdown, contact Crabtree Legal today. We will guide you through establishing testamentary trust Wills that provide peace of mind and strong asset protection tailored to your family’s needs.

Thank You to The Executive Centre and Attending Business Leaders

October 17, 2025
Crabtree Legal extends our sincere thanks to The Executive Centre for graciously hosting yesterday's Member Showcase lunch event, where our Director, Jonathan Crabtree, had the pleasure of presenting to fellow business owners. The session explored the limitations of Artificial Intelligence (AI) in drafting key legal documents for start-ups and Small to Medium Enterprises (SMEs). Together, we examined common pitfalls that arise when relying solely on automated drafting tools, including the risks of incomplete agreements, unenforceable clauses, and loss of commercial protection. We are particularly grateful to the business owners and entrepreneurs who attended and contributed to the discussion. Your questions, insights, and shared experiences sparked an engaging and practical conversation about balancing technological progress with the value of tailored legal advice. At Crabtree Legal, we remain committed to helping Perth’s business community make informed decisions as they grow and protect their ventures. Events like this highlight the strength of collaboration between local professionals and the importance of thoughtful, legally sound documentation in every stage of business development. To learn more about how we assist start-ups and SMEs with business structuring, shareholder agreements, and contract reviews, please contact us.

The Benefits of Testamentary Trust Wills Explained

September 9, 2025
Testamentary Trust Wills provide significant benefits for individuals and families planning the distribution of their estates in Western Australia, particularly in terms of asset protection, tax efficiency, and supporting vulnerable beneficiaries. These trusts are established within a Will and become effective upon death, offering tailored advantages for diverse family circumstances. Key Benefits of Testamentary Trust Wills Asset Protection Safeguards inheritance from creditors, bankruptcy, and family law disputes by holding assets within a trust rather than direct ownership by beneficiaries. Shields assets from potential misuse or waste by beneficiaries with high-risk behaviours such as gambling, financial instability, or poor money management. Protects funds from being included in divorce settlements, ensuring they remain accessible only to intended family members. Tax Advantages Optimises tax outcomes by enabling income splitting among beneficiaries, especially those on lower marginal tax rates. Allows income distributed to minor children (under 18) via a testamentary trust to receive the full adult tax-free threshold (around $19,000–$22,000 per child annually, tax-free), compared to only about $500 in a standard family trust. Provides flexibility to defer tax liabilities for overseas beneficiaries by controlling the timing and distribution of income. Support for Vulnerable and Young Beneficiaries Helps ensure responsible use of inherited assets by enabling trustees to set age thresholds (e.g., 21, 25, or older) for the release of funds to younger beneficiaries. Allows creation of specialised trusts for beneficiaries living with disabilities, including Social Security Act 1991 (Cth) compliant Special Disability Trusts. Can provide long-term security for those who require ongoing support, such as family members with health challenges or special needs. Estate Planning Flexibility Highly customisable trusts can be tailored for one person, an entire family, or multiple generations, addressing complex family or blended family situations. Enables control over how and when assets are distributed, including restricting access to certain beneficiaries or protecting inheritance lines within families. Trustees are chosen to ensure accountability, oversight, and alignment with the intentions of the Will-maker, often with recommendations for two trustees to reduce risks. Who Should Consider a Testamentary Trust Will? Individuals leaving substantial estates (often $2,000,000 or more) including superannuation or life insurance. Estates intended to support minor children, vulnerable adults, or those likely to face relationship or financial risks. Families wishing to maximise tax savings and asset protection across generations. Crabtree Legal: Expert Guidance for Your Estate Plan Crabtree Legal offers tailored advice on testamentary trust Wills to protect your legacy and secure your family’s future. Whether you need a simple Will or a complex estate plan, we support business owners, families, and individuals through every stage of estate planning, succession, and trust creation. Feel free to contact Crabtree Legal for a personalised consultation to explore how a testamentary trust Will could benefit your unique situation.