Services
Taxation Law
Australia's business taxation laws are a constantly moving target and I expect that taxation and superannuation laws must now adapt to the new government as they grapple with the long-term structural deficits created by Covid-19.
The "tax-man" is a silent partner who shares your business profits. Something to think about: at the moment he can be asked to share in any losses (ask us how).
Tax is a major "expense" of doing business and should be managed as such. For very good policy reasons taxation laws are drafted on the understanding that a citizen need only pay the amount of tax that the law provides and not one cent more. This has given rise to loopholes that must be closed (eg: non-commercial loss rules), or concessions are allowed on public policy grounds (eg: accelerated depreciation). Australia also uses taxation law to deliver social security policies. Unfortunately, this makes tax law confusing and ever changing.
A business' after tax returns are constantly changing, often without your knowledge. You might be surprised at the changes that can follow from a fall in your gross profit margin forcing you to increase turnover. Perhaps you bring parts of your manufacturing process in-house and lose input tax credits and increase employee on-costs such as fringe benefits tax and payroll tax. Perhaps your business premises become more valuable and property taxes become payable. Upgrading your plant and equipment might crystallise a tax liability upon disposal of the old P&E. And, there are different GST and income tax considerations when deciding whether to pay for that P&E by way of hire purchase or lease.
Business Law
Taxation problems, business opportunities and threats can be managed by adopting the right business structure. I am not necessarily talking about whether you operate as a sole trader, trust or company. Your business structure extends to the way you enter into, and manage, contracts with key stakeholders such as suppliers, customers and employees.
Business transactions often appear to be complicated, but once broken down into their essential elements they always become easier to understand. When the relevant factors have been set out in a logical order, and irrelevant material discarded, the answer to a difficult question might become obvious to everyone.
Once you understand the individual elements of the transaction, negotiations with other parties becomes more straight forward and formerly intractable disputes can be turned into win-win transactions. My experience is that once you have "unbundled" a business transaction the simplest solution is usually the right one.
Insolvency & Reconstruction
When a business is in financial difficulty directors, shareholders, employees, suppliers and customers (and sometimes the families of these people) need no nonsense, pro-active and practical legal advice. Practical advice isn't found in legal or accounting text books. Practical advice is based on years of experience seeing what works and understanding why that solution achieves a favourable outcome.
In times of financial distress the best legal solution might not be the best practical solution. And sometimes the best commercial outcome is achieved by retreating to a firm base and ignoring opportunities that might eventuate if you decide to struggle through the crisis.
A distressed business is more likely to survive if they pro-actively engage with independent advisers as soon as they identify a potential problem.
An insolvency practitioner's obligation is to protect the business' creditors, not the business owners and the other stakeholders i mentioned in the first sentence. A lawyer's obligation is to assist the business recover from distress and return to being a positive contributor to the local economy.
Succession and Estate Planning
Pause ... and take time to plan for retirement and passing your life's work to the next generation. A good lawyer or accountant will have started planning for retirement or sale of your business at the time they design your business structure and each time they help you through the various stages of your business growth.
Your business structure, the vehicles used to hold short term savings and retirement assets, your stage in life, family dynamics (especially blended families), the age of your dependents and your personal objectives are just some of the issues to consider when developing your succession plan.
My experience is that the relatively complicated business structures required during our working life need to simplified in the years leading up to retirement and again when preparing your estate plan. For example, in my opinion, unless your super fund is holding negatively geared business real property, most families should consider winding up their self managed super fund and rolling over into a public offer fund in their 70's.