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Testimonials

Here are some secret survey comments we've received from our happy clients when we asked them why they'd refer us

Case Studies

Buying a business

Situation: A client had entered into an agreement to purchase an existing business before getting any advice. We thought the business price was too high, but it was too late to re-negotiate the sales price.

Solution: We looked at the assets that were being purchased, including the lease, to get the purchase price allocated over depreciable assets rather than classified as non-depreciable business goodwill. The vendor didn’t want to renew the lease but did agree to reduce the purchase price.

Result: Even though there was a signed sale & purchase agreement in place, the vendor reduced the price of the business by $60,000 (about 20 %!). That meant our client, the purchaser, didn’t have to borrow anywhere near as much and also had a much better chance of getting a decent return on their investment in the business.

Utilisation of Tax Losses

Situation:  The co-owners of a business decided to go their own ways, with each taking an agreed geographical area. This left behind the old company with significant tax losses that would be lost to the shareholders.

Solution:  We looked at the value of the business brand that had been built up over many years and identified a number of components of the brand and company history which would still be used by the two new companies. We put together contracts for the use of trademarks, and other intangible assets which would allow for the losses to be used effectively by the new companies. We also looked at how the final year trading activities could be structured in a more tax effective manner.

Result:  In addition to $30,000 in their hands immediately, future tax costs were reduced by $200,000 over the subsequent 5 years.

Poor Key Business Agreements

Situation: At the time of a business purchase only legal advice had been obtained and the Shareholders Agreement had conflicting clauses (from an accounting and tax perspective) that did not work and would not result in the desired outcome.

Solution: Make sure you take advice at the start and make sure you involve all your advisors in the process. Two (or more) heads approaching an issue for different perspectives always come up with a more robust solution.

Result: Unwinding a transaction cost incurred legal fees of $100,000 and because it took over 2 years to complete the profitability of the business suffered significantly.

Business Purchase

Situation:  The client had purchased a highly successful services business with a great customer base and products. Most of the purchase price was for intangible assets, with the only tangible assets being some office equipment.

Solution:  We undertook an assessment of what generated the revenue for the company, reviewed the agreements that were in place for the tools that were used in the delivery of services, and determined the value that could be ascribed to depreciable intangible assets.

Result:  A tax saving of $300,000 over 4 years.

Trust Management

Situation A husband & wife team who had physically separated some years earlier decided to formalise their arrangement, including the financial aspects. Since separation, she had been involved in some new successful ventures and had advanced funds from them into their joint ventures. Because she had not bothered at the time to document the advances that she made to the joint ventures from her own funds there were major debates about the amount that had been advanced and the ability to charge interest was disputed, leading to loss of interest on the advances made, significant legal fees and a whole lot of stress.

Solution:  Future risks cannot always be determined or quantified at the time, but really good documentation has the potential to save time, money and stress down the line. Many business owners are not good at managing the detail, so they need to make sure that they are working with people who understand both the big picture and the potential risks.

Result: The lack of the right documentation at the right time cost one shareholder $50,000 when the business was being wound up.