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Business Succession & Asset Protection

The business structure of any small or medium enterprise (“SMEs”) plays a critical role in successful succession planning.  To the extent possible, the correct business structure should be chosen at the outset, taking into consideration factors such as:

  • implementation and administration costs;
  • governance and management issues;
  • taxation concerns;
  • asset protection;
  • sale achievability; and
  • succession.

Sole proprietorships and partnerships involve personal liability and are also likely to be subject to tax consequences in the event of the death of a sole proprietor or partner, where their share falls into the estate of the deceased. For these reasons, these types of business structures are, in modern times, not as common.

As an alternative, private companies or discretionary family trusts, are often selected as preferred structures in which to hold business interests.

For example, a structure (with asset protection elements) for a simple business could be as follows:

  • the business assets such as land, intellectual property are owned by a family trust, and a corporate trustee is appointed;
  • since a structure (say, a company) will be incorporated to trade and conduct the business, owning business assets in a different entity is often a prudent strategy to quarantine those assets from the trading (and often risky) activities of the business;
  • the shares of the trading company could be owned by a discretionary (family) trust and the dividends then pass to that trust where they can be distributed at the discretion of the trustee;
  • succession in the case of the corporate trustee takes place by gift of shares, while nomination provisions for successor appointers of the discretionary (family) trust can be inserted in the appointor’s will; and
  • the benefits of capital gains tax rollovers can be utilised in this type of business structure.

At Burke & Associates Lawyers, we, together with our partners, are qualified to provide legal advice and services relating to your business structures, asset protection and succession planning (particularly important during the current COVID-19 outbreak).  For more information, please contact Meghan Warren, Principal or Rosy Roberts on mwarren@burkelawyers.com.au, rroberts@burkelawyers.com.au, and  respectively, or by contacting our office on +61 3 9822 8588.

Contacts

Meghan Warren

Principal

Meghan Warren

Principal
LL.B GAICD B.Bus (FinPlan)
Meghan is one of the few lawyers in Australia admitted in the State (Victoria) and Federal jurisdictions of Australia, and as an Attorney at Law to the New York State Bar in the United States.

Kristy Muhlhan

Principal

Kristy Muhlhan

Principal
LL.B (HONS) GRAD DIP. L.P., GAICD.
Since 2014, she has been an owner and Principal of the firm and has mastered a broad range of essential commercial and business skills which go hand in hand with the work she does for...

Rosy Roberts

Principal

Rosy Roberts

Principal
LL.B (Hons) B.A GAICD
Rosy has extensive experience in Litigation & Alternative Dispute Resolution having represented clients in all Victorian State Courts and the High Court of Australia. She is also a VCAT appointed Administrator.

Anthony Burke

Consultant

Anthony Burke

Consultant
B.A LL.B DIP.FIN. MGT
Tony is an LIV accredited business law specialist and a VCAT appointed Administrator. In 2008 he was President of the Law Institute of Victoria and served for two years as a director of the Law...

Stewart Davis

Associate

Stewart Davis

Associate
As well as property law, Stewart has had exposure to VCAT administration matters and commercial law, particularly servicing developer clients.

George Hanger

Associate

George Hanger

Associate
LL.B BA
George was admitted to legal practice in May 2015 after completing a Bachelor of Arts at the University of Melbourne and a Bachelor of Laws at Monash University.

Antonela Graso

Paralegal

Antonela Graso

Paralegal
Whilst completing her professional business and law tertiary qualifications, Antonela provides efficient and effective legal support services to our valued teams and clients.

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