[EP 310] Restructuring Before a Sale: What Most Businesses Get Wrong

Joanna Oakey (0:25): Hi, it’s Joanna Oakey here, and welcome back to the Deal Room Podcast, a podcast proudly brought to you about commercial legal practice, aspect legal. Now, in this episode, part one of a two-part series, we’re sharing insights from a webinar I joined with Brett from Business Valuations Online, where we focus on one of the most overlooked areas in business sales: restructuring and exit readiness.

Joanna Oakey (0:25): Now, Brett is a business valuation and forensic accounting expert with more than 30 years of experience. And he helps business owners and advisors turn complex financial data into clear, practical insights. Not only that, but he is also a regular presenter to accountants and lawyers and has seen firsthand what happens when businesses aren’t set up properly before a transaction. Now, in this episode today, we are talking about.

Joanna Oakey (0:25): Why business structured decisions made early can have major consequences later. The role of proactive advice and why waiting until a sale is underway is often too late. And how advisors can help clients become exit ready well before a transaction is on the table. So let’s jump in to part one of our two-part series in our discussion with Brett Goodyer from

Joanna Oakey (0:25): Business valuations online. Okay, so two things we’re talking about today, now that we’re live, is restructuring and employee buyouts. And then we’ll have a bit of a QA. Actually, I I’ve gotta say, Brett, the your idea of talking about war stories as well may be way more interesting than some of the scuff I’m talking about. So please throw in along the way. We all know everyone loves to hear war stories and things that go well as well.

Joanna Oakey (0:25): so I we’ve divided this into two halves. I’m talking about restructure first, and then the second bit I’m talking about employ employee buy-ins. but starting with restructure. So why am I talking about this with you? The issue is when we deal with sellers at exit, the issue that we come against or up against time and time again is that the structure of their business.

Joanna Oakey (2:48): Is creating some sort of issues with the sale process. So it might be an issue with the sale process in terms of complexity structure, assets a little bit messy, buyer comes in, and the process itself is a bit confusing or scares off buyers. So that’s one of the first areas. The second area, which is perhaps even bigger than the first, is the tax issues for sellers. Not issues, but the the fact

Joanna Oakey (2:48): That so many sellers we see are not optimized for exit. Now, we’re not tax experts. we leave that to you guys as the accountants or your specialist at parts of your accounting division or the third party specialist that you bring in. But we see the issues at exit when suddenly accountants become aware of the fact that their clients are selling and they had no idea that they were about to sell.

Joanna Oakey (2:48): And realise that the structure of their sale is putting them in a situation that is not highly advantageous from a tax perspective at exit. I’ll talk to you about to Yeah, sorry, go please give us an example.

Brett Goodyer (3:57): An example on that one. I was nearly six or seven minutes without hearing my voice. It was very

Joanna Oakey (4:04): I missed it too. I missed it too.

Brett Goodyer (4:06): Absolutely. So for in a a great example of that was that I had a business reasonably recently, that it was an NDIS business and you know, it they they need to be registered and it’s not necessar the registration is not necessarily transferable. And so the structure ordinarily you would see in those kind of businesses would be a corporate structure, so that you’re just selling the shares in the entity that holds the business that holds the registrations, for instance. And it was held in a

Brett Goodyer (4:06): a discretionary trust, which meant that essentially that became an extraordinarily complex process to be able to try to get those registrations out of that entity. And so it you can’t sell the the discretionary trust across across, of course. And so there was a a lot of implications because it w they just didn’t get the right structuring advice from the beginning. So example number one.

Joanna Oakey (4:58): Such a great example because actually we deal with a lot of RTOs, a lot of NDIS businesses. So both of those types of businesses are examples of where there can be a real issue in the transfer of the assets. So the value of the business transferring out at exit if you if they’re not structured correctly for exit. actually we’ll talk about the employee buy-in side as well, is a is another classic example of where you’re having a buyer buy part.

Joanna Oakey (4:58): Of the entity, because when you have a buyer who’s coming in and not buying 100%, it is very difficult for them to do if the structure is a discretionary trust that they’re running the trading entity out of. And so in in these ways, you know, just being aware of the lack of flexibility in in the future plans of the business owner is actually critical, I think, in considering.

Joanna Oakey (4:58): structure for a business for what it is now and what it should be moved to. But I a few other it’s so I think they’re great examples. Brett, thank you for pointing to those. And a couple of others that I’ll point to here. So these are we actually have so many examples it’s it’s sort of hard to pick exactly which ones to to tell you about. But I’ll tell about this one. This was fairly recently so our client was tapped this is Peter, Peter our client.

Joanna Oakey (4:58): was tapped on the shoulder by a supplier who wanted to buy their business. So this is an example of a seller who hadn’t realized they were about to be on the market. And this can happen in so many instances of sale where one of your clients may not think they’re about to sell their business, but they’re tapped on the shoulder. So the lesson from this is you need to be ready.

Joanna Oakey (4:58): for even if your clients aren’t saying that they are planning to exit in the short the next short period of time. Anyway, what happened in Peter’s business was that he had their business had been r restructured by their accountant years ago, but it had been really messy. So what had happened was they didn’t have a clear, I mean, I I think they did have a checklist that they were working through, but they didn’t actually do all the things on the checklist.

Joanna Oakey (7:12): So they had assets in all different locations. They had customer contracts. They had large customer contracts that were sitting in multiple entities. And when their their buyer was a corporate and and w and you know, in many instances, a corporate is a very attractive purchaser for a business because they quite often, particularly if they’re a strategic buyer, will pay a higher price than if if the business was just on the market. But here in the

Joanna Oakey (7:12): In in this instance, the issue was the buyer was corporate, they knew what they were doing, they had top tier lawyers acting for them, and that meant detail. They started due diligence, they started looking into the business, they saw the mess with the restructure that hadn’t been f properly implemented all those years ago. And the th the second overlay was that the structure was not optimized for exit. and so the tax outcomes were looking rather grim.

Joanna Oakey (7:12): So the the accountant said, No worries, we’ll do a quick restructure now before sale. But the corporate was already in there looking with their top-tier lawyers, as I said before, very detailed. And so what happened was we did the restructure at that time, but we had to do the restructuring the way that the that the buyer wanted, which meant it was a much more laborious and difficult process, and particularly because it’d been quite messy in the background. So the result was.

Joanna Oakey (7:12): Number one, there was risk from a tax perspective because of the timing. and the accountant essentially provided advice in that situation that that that that that really this wasn’t a risk. but he then was by the provision of that advice, I think was putting himself in a position of risk, should there be a tax issue that comes up later in the piece. So that’s the first thing. I think.

Joanna Oakey (7:12): Not only was the client at risk, but now the accountant is at risk because of the late stage of this restructure and some of the issues that occurred during it. It was messy, it took time, and it cost and it cost a lot more and was more complex than it would have been if we had been able to get in before the buyer had been introduced. So I think things like this can be so easily watered off if you just have a bit of advanced planning. One more story: story of Ted.

Joanna Oakey (9:33): it’s a slightly different story here, but it also relates to a failure to restructure in time. So with Ted, he was planning for his sale, and he’d actually mentioned that to his accountants in just in passing, years in advance. So here’s a different situation to Peter. Peter got tapped on the shoulder, it was a bit of a last-minute thing. Ted knew in advance, but he hadn’t sat down when he mentioned it to his accountants.

Joanna Oakey (9:33): His accountant didn’t react with, okay, let’s sit down and forward plan. and so what what happened was he went to a so because he mentioned it to his accountant and his accountant hadn’t raised the issue of structure, he then went to a business broker, put the business on the market, found a buyer, arrived at a commercial deal. And at that point, we were brought in and we said, okay, you’ve got to bring your accountants in. And when the accountants were brought in, they at that point clicked on to the fact.

Joanna Oakey (9:33): That actually the business should have been restructured well in advance because what had happened was that Ted had bought out some of his business partners year and years in advance. We had a few interposed entities, and that essentially was creating a tax issue for Ted in the way the sale happened. so the I I think the answer to both of these problems.

Joanna Oakey (9:33): these issues that had come to us is the same as so many matters we see. They’re just sort of like they’re they’re actual examples, but we see these over and over again. The thing is if you get ahead in a restructure, it can be really pretty easy from relative perspecti perspective, as long as you’ve got the process right. The closer you leave it to sale, the harder it can be because you’ll have a buyer’s eyes on the process as well. Okay.

Joanna Oakey (9:33): So poll, can we throw a poll in here? So my question is, do you have a process that helps your clients review and reconsider their structure in a regular perspective? So I don’t know if we’re is anyone seeing this poll?

Brett Goodyer (11:51): So the poll is up, we’re getting some answers. Why don’t you tell me to I’ll I’ll press end poll and we’ll

Joanna Oakey (11:53): And fill it out.

Joanna Oakey (11:57): All right. Well, let’s see how that’s going. And someone’s asked the example of Peter doesn’t tell us anything except it wasn’t good. I’m sorry. I’m sorry that haven’t given you some insight. What I was trying to do is give you a flavor of the sort of problems that come to us. So the flavor of the problems really is just that restructures either A haven’t happened when they should have happened in the past, or B, they happened too close to exit, or C, they haven’t been executed.

Joanna Oakey (11:57): in a way or way that all of the assets, like the actual structure has transitioned and been completed in the way that it’s meant to. So I think like that’s the and it’s that issue that repeats again and again. And Umesh, if you have like some particular questions about what you’re thinking what you would more you’d like to understand about the example, I’m very happy to give you more you you know more detail. But it really it’s just about that. It’s about the fact that timing’s been missed or

Joanna Oakey (11:57): and and that creates tax issues or that the it’s it’s done in a very messy way or that we have this issue when we try and get the value out of the business because the way we’re trying to di where we left from a structured perspective at exit doesn’t allow us to get the value out cleanly. Okay, so why don’t we end the poll? Yeah, why not? Tell us the results.

Brett Goodyer (13:19): Okay. So if you go to polls over on your right hand side, it will tell you. But fifty percent of people say we’d like to, but in reality we only do it when the client asks. Yeah. Forty two percent say yes, we ask the client as a part of an annual review, and seven percent say yes, we ask the client all the time.

Joanna Oakey (13:37): Yeah, yeah. And part of that annual review, I just want to note something about that annual review process. because one of the things that I get sellers say to us regularly is when I say, Have you spoken to your accountant in detail? Have you had clear tax advice so you understand what tax looks like at sale here? They’ll w when I ask the first question, have you spoken to your accountant about this? The answer is they say yes, almost always. Then the second part of the

Joanna Oakey (13:37): question, do you clearly understand what structure is best for you at sale now? And we’re talking business sale, share sale, whatever the other elements might be, and what from a tax perspective and what tax looks like at the end. And they will almost always say no. And so I just like I invite you to have a deeper conversation with your clients. And if they sound like they’re about to go on the market, you have the opportunity here

Joanna Oakey (13:37): For a for a tax advice component, if that’s a service that you offer, you have and as they’re leading up to talking to you about what where they are in the business, what the business looks like at the moment. I think part of that annual review process should be a deep consideration of whether or not this is an i i are they in a structure that could

Joanna Oakey (13:37): create an issue for them at Exxon. What I mean by that is, are they an NDIS business? Are they an RTO where they’re not set up, for example, in a company where we can do a share sale? Might they be in a situation where they are looking where they could possibly exit where they might want to do a share sale, but the, for whatever reason, the entity at the moment isn’t appropriate to deal with a share sale. They’re the sort of things that, you know, I think are really

Joanna Oakey (13:37): important when we’re thinking about whether a restructure should occur. And and some of that might be accounting, some of that might have a legal overlay. And that’s where we like to say we can absolutely help. If you’ve got a question, you’ve got you you you’re not sure about things, we’re happy to be a soundboard and we’re happy to jump into calls with you and the client to work through things or with you in the background.

Brett Goodyer (15:52): I’ve I’ve got a perfect example of that, Joe. So yesterday I was in I was in meetings with regard to a merger. So two two businesses, both in sort of let’s call it allied health. one was sort of ten million dollar business, this is in value, and the other one say three and a half. and both of those businesses were very different, but each of them had different panels and tenders and things that they’d won. So they had these long term

Brett Goodyer (15:52): contracts with large insurers, with government entities and whatnot. They wanted to now have neuco, new company, set up for both of those entities to come together. But their difficulty arises from the fact that we we don’t know whether those those contracts are transferable or what kind of terms within those contracts might mean that it’s problematic to to simply try to combine the two businesses under a new entity. and so that structuring of that new entity was

Brett Goodyer (15:52): was a critical consideration and they had neither of them had spoken to their their accountants, or really a lawyer, about the appropriate structure that would fit their particular new business. Because they hadn’t even had a a detailed review of the contracts that they were going to try to bring together under the new co. And so it’s the perfect example of of looking ahead because

Brett Goodyer (15:52): I guess they they need to make sure that the the new structure was going to to fit their needs at transaction as well. So it’s not necessarily just what does the old company look like and what’s the tax benefits and and what other the I guess the the the issues you might find in a transaction, whether the owner is exiting or whatever they might be. Sometimes it’s it’s about how can we get the contracts or the the registrations or whatever it might be.

Brett Goodyer (15:52): to transfer smoothly into a new entity, whether that be a a merger, an acquisition or otherwise. So it’s you know, it’s it’s quite often the case that you don’t know what you don’t know if the right questions are being asked. And it’s often it’s it’s a better idea to ask the questions well in advance before a transaction is in the offing, just to ensure that that that trading business, that entity that may day w may one day want to exit and they will.

Brett Goodyer (18:15): ex exit at some point. But that being exit ready at all times is just something that most people don’t consider until often it’s too late.

Joanna Oakey (18:26): totally agree and I just feel like you know I mean I guess it’s overused this concept the you our our clients accountants sit as their trusted advisor but it’s it’s absolutely true though you know and if that’s you know you’re trying to prove value to your client to keep them sticky to you things like running through with them the way what they’re thinking about in the future whether they could be if someone tapped them on the shoulder

Joanna Oakey (18:26): might that be something that they could react to, helping them make sure the structure is right and working together with a lawyer if you need to, or whatever. that’s like that’s where you can add real value, like real value that clients really appreciate over and above the things that you may already be doing. So I just think it’s such an opportunity. and and just to your point, Brett, like we we talked about, you know, you great example you brought up there, because whilst we talked about

Joanna Oakey (18:26): RTOs and NDISs, I guess I didn’t call out the sorts of other businesses that really have to be share sales. And when when you have a business, well, when you have a sale, essentially the buyer wants the value out of the business. If you’ve got contracts with large customers, with government customers, with customers that are corporate, with suppliers that are key suppliers that may be only supplying this business and not others, you have a you have a stack of contracts that

Joanna Oakey (18:26): could be very difficult to transfer in a business sale. And in those sorts of instances, share sale becomes critical in keeping the value in the business. So it’s those sorts of things that are the overlay. As you say, it’s not just tax, but there is tax. There’s the tax opportunity, but there’s also all of these other elements about making sure you understand if they were to sell tomorrow, are they really in an entity in a structure that makes that?

Joanna Oakey (18:26): be able to happen in a way that doesn’t devalue them if they’re on the market.

Brett Goodyer (20:27): Absolutely. I also yeah, as a as a ex director in in you know insolvency businesses, I saw regularly that that having the correct structure in place early on was also an asset protection mechanism for the directors and and you know of of trading enterprises as well. When, you know, everything’s fantastic when everything’s going well, but the the moment that the the

Brett Goodyer (20:27): you know, shit hits the proverbial fan, the the structure that’s in place can either massively help or hinder the directors of a company as well.

Joanna Oakey (21:08): Yeah, yeah, totally agree. Like I literally was having this conversation with a client yesterday afternoon. And and and you know, it was just it was just one of those situations where where you you know you realize how important restructuring for them is to protect them into the future. So that absolutely should be part of that annual review process. okay, so we’ve talked about why, why restructure, when restructure comes up, and why, very important.

Joanna Oakey (21:08): Importantly, it’s important to do it in advance, not in a reactive way, once we know a client has a buyout. So let’s look at the mechanics of it. So very quickly, just high level, and you probably all know this. I’m not trying to teach you how to suck eggs, but just high level. Number one, target structure. We need to understand what the optimal structure is for the business if they were to exit.

Joanna Oakey (21:08): at any point and assume they may potentially exit tomorrow if they may react to a tap on the shoulder. So review the structure, work out what the optimal structure might be. The consideration of that might be just you as their accountant, but it might also involve bringing in, you know, other advisors like a lawyer or a tax advisor or whatever, if if you think appropriate depends on the size of the business and how complex it is.

Joanna Oakey (21:08): So we work out what the tr target structure is. We say, okay, well, the current structure isn’t the target structure. and so is it worth making the move? If we deem it’s worth making the move, then the next thing is to make sure we’ve got clear valuation and understanding of the tax and any other duty implications. of course, valuation is where Brett comes in. I don’t know if you had anything to throw in here about the valuation side, anything that you wanted to say, Brett.

Brett Goodyer (23:02): Well no, I know someone who’s really good at it, so just letting you know.

Joanna Oakey (23:07): Yeah. Great. Excellent. Wonderful. then the next one is obviously the documentation side. And I’ll t I’ll talk to you on the next slide about what that means, but it’s just about documenting it properly. and so it doesn’t have to be complex, but it does have to be it does have to cover all the bases. And then the fourth element is implementation, should seem obvious. isn’t that a fantastic cold turning on the screen, but it’s really about moving all the client contracts. and some moving the contracts are

Joanna Oakey (23:07): C client contracts, supplier contracts, those other sorts of contracts, they might be, it might be simple to do. It might be just starting up in a new entity and having clients sign on to two new terms, or it might have to be formal novations. So this depends on the business itself and the complexity of the contracts in the business. We need to clear PPSRs, we need to move employees, we need to move supplier accounts, we need to communicate with customers, we need to move the lease.

Joanna Oakey (23:07): These are all the sorts of things that have to be done in implementation. And it can be a really long list. Now, if we simply are going to say to clients, okay, we’ll restructure you, it’s pretty simple, you just need to make some, just move your contracts across and you’re good. I promise you the outcome will be the restructure is will simply just not be implemented in a way that cleans up all of the assets properly.

Joanna Oakey (23:07): So there needs to be far more structured approach to make sure it’s done. Done right. okay, so really high level overview. You the high level overview of this is the documents. So here’s some examples of the documents. We don’t use all of these, but these are the type of doc documents that we decide whether need to be used. So if we are if we’re transferring shares in the structure, obviously we need a share sell or share.

Joanna Oakey (23:07): restructure agreement, or if it’s an asset sale, we’re moving just the assets themselves. It will be an asset or business sale agreement or a restructure agreement dealing with assets. We might need an assignment of the lease. We might need a novation in a formal sense of key contracts. We might need an assignment rather than a novation. And the difference just very quickly between those two is that if

Joanna Oakey (25:30): the contract needs to be novated. It needs the customer to sign as well. We need a tripartite agreement, the the old co, new co and customer. And so there’s only obviously we don’t want to use a novation unless we absolutely have to. So that’s the sort of thing where we have to actually work out if that sort of formality is required. there might be an IP transfer agreement. We might have to have loan or debt assignments that are documented and

Joanna Oakey (25:30): We might need a new or amended shareholders’ agreement. We might need a trusteed or a variation, company constitution, resolution and minutes, PPSR registrations in the new entity. Looks overwhelming. I understand. Don’t worry. We will send you a list of all of this. But the so just scan this, or we’ll put a link in and we’ll send you all of this with all of the de detail behind it so that you have an overview. But the the thing to remember is

Joanna Oakey (25:30): there will be almost no restructure that requires all of those elements that I just talked about. and some restructures are very simple, some are more complex, but it just gives you a bit of an idea of the kinds of documents that may be needed in order to affect the restructure properly and to make sure the assets properly have been moved to the new entity. And this can be really important at exit if at exit a

Joanna Oakey (25:30): Buyer is doing deep review into chain of title of ownership of the assets in the business. okay, so what do you need to do to make sure it happens? So you need to ensure there is a clear restructuring plan. Once again, this doesn’t have to be you. This might sit on the legal side, but it it just it has to, this has to be in place. So the

Joanna Oakey (25:30): The outcome and where we’re getting to, and then where we’re moving from so that it’s clear what needs to happen as part of the restructure. We talked about valuation and tax position confirmed. legal overview. So this step is really important because we need it really before you restructure or have the business restructured, you should ensure that there has been a legal review of understanding.

Joanna Oakey (27:55): How the contracts are set up in the business and what will need to happen to get those into the new entity. The next step is getting it all drafted and executed. A coordinated sign-off between the lawyers and the accountants together. Here, the ideal is that lawyers and accountants aren’t working in silos. We’re working together as a partnership, and that’s the way I like to see it. But it’s it’s one of those things that I I really find often

Joanna Oakey (27:55): when I look at restructures that hadn’t been completed properly, the the issue has been that there hasn’t been a meshing, a partnership arrangement between the accountant and lawyer both working on it together with the client, you know? the someone has worked in a silo and and not been able to make sure everything’s been ticked off along the way. And then we’ve got impl implementation. Okay, so what can go wrong?

Joanna Oakey (27:55): I’d love to see I talk to you, of course, about things that can go wrong in in in looking at the perspective of restructures. but can everyone should throw up here what have you seen go wrong? What are issues that you’ve seen in restructures that have been tricky to deal with, if anyone wants to throw anything in here? and David’s asked about indemnities and warranties for continuing and incoming.

Joanna Oakey (27:55): Stakeholders. So one thing I’ll say about that. So here we’re talking about an internal restructure. And we have less focus on warranties and indemnities and internal restructure unless we’re restructuring at the point of exit and we’ve got a buyer looking over our shoulder at that point. And that’s when the warranties and indemnities can now really balloon because and and then that creates risk.

Joanna Oakey (27:55): Ongoing risk for the seller. So warranties and indemnities become particularly relevant when we’re dealing with a third party. But when we have a third party who’s overseeing our restructure, that’s when the restructure, when warranties and indemnities become particularly important for the restructure. Does that make sense? Okay, so Michael issues that you’ve seen an implementation plan based on asset value at settlement.

Joanna Oakey (30:22): So you’re saying Michael, that’s like that can be a tricky thing. and you know, and I mean, Brett, maybe you might even want to think about running a whole webinar on valuations in this area to talk about some of those, some of those sorts of issues. I I think look, we will not the you as an audience, not very chatty at the moment, but please throw up please throw up any qu any any issues, I guess.

Joanna Oakey (30:22): I I guess if you’ve had any along the way with restructures and maybe we’ll talk about them at the end. but really just high level, how do you make sure the process is smooth? Start early, at least one to two years before exit. you plus the lawyer need to be working together, not in silos. Make it easy for your clients. Don’t just say, okay, we’re, you know, we’re doing the asset forms to change something around, things around, but don’t

Joanna Oakey (30:22): but without giving them the guidance that’s needed. Now that guidance doesn’t need to come from you. We have lots of checklists and templates, or, you know, if you have other lawyers, they probably have checklists and templates too. But the point is, your clients need to be educated as to how what they need to be doing. And you need to be clear on what you’re doing and the lawyers need to be clear on how the process is being

Joanna Oakey (30:22): driven to ensure that is actually done and it’s not left messy at the end of the day with assets everywhere, like the examples of that I told you about. So where’s the opportunity? your opportunity is this. As I said earlier, this is an area where you can add value that makes a massive difference potentially to your clients at at at exit.

Joanna Oakey (30:22): the number one complaint that we hear talked about in relation to accountants is that they’re that you know, when we get complaints, it’s about that the c their accountants aren’t adding value, that their accountants aren’t proactive. This is the sort of way in which you can really show that you’re adding value when you’re having these future-paced conversations, looking at structure and assessing or helping them to assess the you know whether it’s appropriate for them.

Joanna Oakey (32:42): It’s an opportunity for additional revenue streams, because there’s accounting work, of course, that needs to happen in a restructure. But ultimately, after all of that, rather than you, you know, it’s not just about you adding value and being proactive rather than reactive. It’s not just about the revenue stream for you, but it’s just ultimately better for your clients. and I just because I deal with so many sellers at exit and see this repeat again and again and again, I just

Joanna Oakey (32:42): You know, I I sort of have this plea. You’re the people who see your clients every you know, every year or more regularly. You have this opportunity to have these discussions with them. Please help them identify these issues in advance and get onto them. because it really can make a difference. So very quickly, if you’re interested in restructured package, we’ve tried to make it super easy. our package starts from nineteen hundred plus GST and it’s just

Joanna Oakey (32:42): a a really structured approach too. We meet with the clients, we we do all the planning checklists and agreements. We do all the planning, the checklists for you, and we also run a legal health check for the client as well to make sure they’re in they’re well prepped to be exit ready at any time that they might be tapped on the shoulder. Okay.

Brett Goodyer (34:03): That’s that’s proactive proactive exit readiness part is something I’ve I’ve always been harping on about myself, so so I’m I’m gonna beat that drum too. some of the people that are in attendance today are also brokers and and I know that business brokers will will generally not provide any advice to to either the seller or the purchaser with regard to to structures. But I

Brett Goodyer (34:03): I know that most of them that are here today that I know will send them back to their accountant to get advice. But being proactive is the big, big, big key here is essentially creating a business that’s exit ready at any point is is essentially what you’re trying to do. And communicating clearly with your your clients what you’re trying to do and why you need to do it and the tax implications if you get it wrong is is critical and and coming from that position of I I guess education now.

Brett Goodyer (34:03): with the got the information in front of them, talk to their clients to say, look, look, it’s all fine and dandy right now. It’s what happens if this happens? What happens if that happens? It’s a it’s about trying to give them an understanding of the risks, the implications to personal wealth, to to asset protection, whatever it might be, and say, look, okay, yes, it’s going to cost a little bit of money to to restructure to get you into the optimum structure for your business and for your personal wealth. But it’s absolutely critical that

Brett Goodyer (34:03): you are prepared well before anything happens. Because, you know, for the the accountants that are here, you know, we all know that there’s there’s CGT implications, there’s some concessions that might be available. There’s various different things that can be applied to but they have to be done before the business is turning over more than two million or is worth more than six million or or whatever it might be. Only you know what the business is doing. You’re the trusted advisor. You have to let them know when those

Brett Goodyer (34:03): those windows might be closing to them so that you can act swiftly to give them the best advice at the best time to preserve wealth. So that’s my little my little bit. Now I’ll step back out.

Joanna Oakey (36:08): like that’s such a good point. I didn’t want to talk about that as they’re approaching the six million side. But I like I just think that is just su you know, things like that, that’s you know, that that’s your expertise, you know, as accountants. I’m I’m not gonna wade into that space, but it’s just such an opportunity for you, I think, to to show to like to provide that really, you know, that value, that really deep.

Joanna Oakey (36:08): value to your clients. You know, it really is. Well, that’s it for this episode of the Deal Room Podcast. If you’d like more information about this topic, then head over to our website at thedealroompodcast.com or our legal firm, aspectlegal.com.au. Or if you’d like to subscribe to get an update each time we launch a new episode, or if you would like to book a call in directly with our legal eagles at aspectle

Joanna Oakey (36:08): To discuss your own transactional legal needs, then check out the show notes for this show on your podcast player for a direct link. Well, that’s it. Thanks again for listening in. You’ve been listening to Joanna Oakey and the Deal Room Podcast, a podcast proudly brought to you by our commercial legal practice, Aspect Legal. See you next time.

Announcer (37:28): Ladies and gentlemen. That will conclude this evening’s entertainment. Thanks for listening to the Deal Room Podcast. To find out more about this episode and other episodes in the series, check out the show notes or head over to our website at thedealroompodcast.com.au.