During the post maturity phase of the business, preparation of handover of the business becomes the most pressing issue. If this process is not handled well the value of the business may be reduced, meaning that the business owners retirement will not be as comfortable as expected. After what is often years of hard work this would be a very unsatisfactory outcome. You can enhance the probability of a successful handover by undertaking appropriate planning and actions.
Succession planning has two main components. These are the transfer of management succession and the transfer of ownership succession. At least during the maturity phase, potential management succession candidates need to be identified. The other key components are building and maintaining profits, retaining key people, and making yourself dispensable. The second component involves examination of the options, family, business employees or third parties. It also involves establishing finances and valuations, due diligence of potential buyers and minimising disruption through a managed handover.
Completion of statutory and compliance income tax returns remains an onerous and standard requirement during the post maturity stage
Advice on how to minimise the impact of taxation on trading profits through the year and particularly before the end of the financial year in the April to June period is essential to have some control over the incidence of year end tax liabilities.
The impact of a decision to sell or purchase capital assets that might incur a capital gain tax liability is of special importance. It is essential that you seek advice on these transactions. Also, income tax can give rise to unexpected consequences. Having timely and competent advice on such issues can make a significant difference to your income tax liability at the end of the financial year.
Assistance with the preparation of GST returns and advice on GST problems to ensure that you comply with the law and do not under or over pay your liabilities.
The form of legal entity through which you trade will have a significant impact on tax liabilities and the ability to share income with family members or other associated people or entities. It will also have an impact on what assets will be available to creditors in the case of adverse trading circumstances. The trading structure may be as sole trader, partnership, company, discretionary trust, unit trust, hybrid trust or limited partnership. Any of these entities may be used to hold asset, including the addition of a self managed super fund.
It is not unusual in business that a quick five minute telephone call may save you from the consequences of making a poor decision. Being able to speak with someone with over thirty years business experience may save time, stress and money.
Meetings with the owners on a quarterly or monthly basis to review the performance of the business as indicated by the actual profit and loss statements, to budgeted profit and loss statements, review of cash flow information, review of financial analysis information and proposed management actions resulting from these reviews.
Continue building assets outside the business to accumulate wealth for the owners of the business. This asset accumulation program may involve business property purchase, other property purchase, and establishment of a self managed superannuation fund or investment in other assets.
A self managed superannuation fund is an ideal tax sheltered vehicle to use to accumulate assets for retirement. The range of investments is limited only by the investment strategy devised by the member/trustees. There are restrictions on some investments owned by the members. There is considerable compliance required by the Australian Taxation Office but if these rules are adhered to, the tax savings can be substantial.
As part of the risk assessment, a business needs to consider acquiring insurance cover for workers compensation, fire and property, public liability, professional indemnity, product liability, plate glass, fidelity, machine breakdown, computer breakdown, water damage, cash in transit, goods in transit, inventory insurance, plant and equipment, building, motor vehicle comprehensive, motor vehicle third party property, loss of profits, tenants liability, key person, personal disability (sickness and accident), trauma, travel and life insurance.
Estate planning means developing a documented estate plan, treating family members with fairness, providing for those with special needs, minimisation of the taxation consequences and ensuring your objectives are achieved. Fundamentally, estate planning focuses on what happens after death, but should commence preparation well before then. The estate plan will encompass wills, powers of attorney, enduring guardianship, the Family Provision legislation, asset ownership including non estate assets, life insurance policies, testamentary trusts, business continuation issues, and superannuation issues.
The whole process of asset accumulation, portfolio management, risk management, succession planning and estate planning can be assessed and managed on an annual or more regular basis using the wealth management index assessment and reporting process. This report will indicate what areas require more attention and suggests the steps or strategies that need to be implemented to bring your plans back on track.
Financial statement preparation is a basic compliance issue for any business of substance. It is the document financial institutions require for lending purposes and purchasers requires when assessing the purchase of a business. Reliable, credible and accurate financial statements supported by well documented source records are an essential requirement for a business.
