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From: Colin Mills
Well I must say I was surprised at the number of replies to my (12% brain dead) post earlier this week. Perhaps I touched a raw nerve? I'd suggest a number of people on this site are a little too precious for their own good.
Fact is I started the post by saying it was all based on a conversation with a stranger who may have been simply embellishing the truth. As such I'm certainly not going to waste my hard earned money engaging my solicitor on here say. Nevertheless I have spoken to him on a number of occasions. His views prompt me to list the following:
1/ Wrapping would be construed by any court or magistrate as a business. Its a million miles removed from dear old mum and dad buying a passive IP for their retirement.
2/ ALL businesses require certain permits, licences and/or accreditation with the appropriate statutory authorities. There are LAWS to ensure compliance.
3/ It would be simplistic and naive not to comply with the requirements of point 2 above. Mugs with no business background or experience whatsoever suddenly starting a business involving relatively large sums of money and dealing unchecked and unfettered with members of the public would be unacceptable to most government authorities. Courts would look unfavorably in any legal tussle at these supposed business people.
4/ Wrapping is the primary business of borrowing and lending money. In actual fact it has little to do with real estate investment. You can wrap any asset,a car, truck, boat, virtually anything of value.
5/ Because wrappers do not accept deposits in the traditional sense they use a loophole to escape from the rules of the banking act. Should any wrapper have the audacity or stupidity to borrow money directly from the public they would be stamped on very quickly.
6/ The W.A. government is about to initiate a test cast against wrapping. Given item 3 above, my solicitors opinion is that this will be successful. As soon as that happens the entire industry (if that's the right word for it) will collapse like a deck of cards.
The quicker the better.
Well I must say I was surprised at the number of replies to my (12% brain dead) post earlier this week. Perhaps I touched a raw nerve? I'd suggest a number of people on this site are a little too precious for their own good.
Fact is I started the post by saying it was all based on a conversation with a stranger who may have been simply embellishing the truth. As such I'm certainly not going to waste my hard earned money engaging my solicitor on here say. Nevertheless I have spoken to him on a number of occasions. His views prompt me to list the following:
1/ Wrapping would be construed by any court or magistrate as a business. Its a million miles removed from dear old mum and dad buying a passive IP for their retirement.
2/ ALL businesses require certain permits, licences and/or accreditation with the appropriate statutory authorities. There are LAWS to ensure compliance.
3/ It would be simplistic and naive not to comply with the requirements of point 2 above. Mugs with no business background or experience whatsoever suddenly starting a business involving relatively large sums of money and dealing unchecked and unfettered with members of the public would be unacceptable to most government authorities. Courts would look unfavorably in any legal tussle at these supposed business people.
4/ Wrapping is the primary business of borrowing and lending money. In actual fact it has little to do with real estate investment. You can wrap any asset,a car, truck, boat, virtually anything of value.
5/ Because wrappers do not accept deposits in the traditional sense they use a loophole to escape from the rules of the banking act. Should any wrapper have the audacity or stupidity to borrow money directly from the public they would be stamped on very quickly.
6/ The W.A. government is about to initiate a test cast against wrapping. Given item 3 above, my solicitors opinion is that this will be successful. As soon as that happens the entire industry (if that's the right word for it) will collapse like a deck of cards.
The quicker the better.
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