future

Businesses affected by changes to stamp duty

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Deferred timetable for stamp duty abolition

In the most recent budget, the NSW Government announced that it was deferring the abolition of stamp duty on (1) the transfer of business assets other than land and (2) the transfer of unquoted marketable securities to 1 July 2013.

While this announcement may disappoint anyone looking to acquire a business, it is not the first time the NSW Government has changed the timetable for abolishing stamp duty. In 2006, it was ‘brought forward’ to 1 July 2011. In 2008 it was ‘pushed back’ to 1 July 2012. Now, it has been ‘pushed back’ again to 1 July 2013.

If you have been making your plans or preparing your budget around the abolition of this stamp duty on 1 July 2012, you may need to revisit those plans and revise your budget. Stamp duty is here to stay – for now (and who knows how long in the future).

Business Lawyer – Advice for Franchisees

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Providing independent legal advice to intended franchisees

Starting any new business can be a daunting experience without the right help, regardless of whether you’re inexperienced or a seasoned entrepreneurs. If you’re looking at buying into a franchise, you’ll need to pay special attention to the franchise agreement and disclosure documents to understand your rights and obligations under that franchise. After all, that’s what’s going to be controlling your franchising life.

To help you along this journey and aside from all other requirements determined by law, you must obtain independent legal advice before you enter into the franchise agreement. We assist many clients who have taken up franchises in various industries, especially the fast food business – but we’ve also consulted just as many clients who have had issues with their franchises and franchisors, or who have wanted to exit the franchise because it’s not as easy as they had initially thought.

They key is about choosing your franchise carefully. Understand what the franchise is offering to you and how they’re going to support you. What’s the value of the franchise? That’s what you’re paying them for, isn’t it? In most cases, your accountant will also be a good source of advice in relation to your future plans of being a franchisee and the business goals that you’re setting for yourself.

Where are your personal guarantees?

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Personal and Director’s Guarantees

In small business run through a trust or a company, it’s common for your various suppliers and credit providers to ask you as the business owner to provide personal guarantees in support of the business’ credit requirements. The nature of these guarantees are usually that they are unlimited and continuing, meaning that you’ll be personally liable for whatever the business may incur in relation to that creditor while that guarantee is effective.

If you’re not keeping track of where you’ve given these personal guarantees, you could be exposing yourself to unknown personal liabilities now and in the future. What happens if you sell the business or are replaced as a director of the company? The guarantee could still bind you regardless if you don’t take steps to have your obligations discharged in some way. Generally, the terms of the guarantee will advise you how this can be achieved, but in practical terms it might mean replacing your guarantee with another form of acceptable security.

Whatever the case may be, make sure you’re keeping track of your personal guarantees otherwise it might be something that will come back to haunt you in years to come.

Business Succession Planning

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One day you will have to leave your business – whether its because you retire, you pass the business on to your family, you sell it to an interested party, or because of health circumstances.

Whatever those circumstances are, you always should have a plan to deal with what happens when that day comes. A failure to do so will likely result in your business suddenly coming to an end if something happens to you.

A succession, or exit, plan outlines who will take over your business when you leave or if something happens to you.

A good succession plan puts into place a process that will enable a smooth transition from you to your successor, that minimises disruptions to your business resulting from that transition. A good succession plan also gives potential purchasers peace of mind that the business will not fail the moment you leave. Putting a succession plan in place can maximise the value of your business and enable it to meet future needs or deal with unexpected issues.

What an appropriate plan is will depend on the nature of your business as well as the structure of your business. Some of the questions that you will have to ask are:

  • How long do I want to be in business?
  • Do I want to sell the business eventually or do I want to hand it down to my children?
  • What business structure does my business operate in?
  • What are the assets and liabilities in my business? Who owns them?
  • What is the goodwill and intellectual property in my business? Who owns them?
  • How big is my business?
  • Who can run my business if I am not around?
  • Do I have any processes or procedures for my employees to follow, so that if something happens they can act “automatically”?
  • If I were to sell my business, do I have a handover strategy?

If anything, see your business coach, accountant, or lawyer – they can certainly help you out in relation to identifying these issues and assisting you with your business succession plan.

A good succession plan enables a smooth transition with less likelihood of disruption to operations. By planning your exit well in advance you can maximise the value of your business and enable it to meet future needs.

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6/83 George Street, Parramatta NSW 2150 AU
PO Box 1375, Parramatta NSW 2124 AU
T: +61 2 9687 8885