This On Demand was recorded on 8 November 2022.

Whether it is the sale of a business, a transfer of a business as part of a relationship property settlement, or the execution of an estate, there are numerous pitfalls to be aware of when advising on transactions which lead to the sale of all, or part of, an interest in a business and which impact on the value of a business.

In this On Demand, the presenters will highlight matters to be aware of when advising on business restructures, sales, or the sale of an interest in a business. Although it does not cover valuation theory or how to undertake a valuation, the supporting materials will provide a brief summary of the theory behind valuations for background knowledge.

Fundamental points to consider include reliance on:

• Key customers and/or suppliers;
• Intellectual property;
• Lease arrangements; and
• Financiers (including amounts owed to owners via current accounts).

Then there is the issue of taxation pitfalls, including:

• Continuity of taxation losses and imputation credits; and
• Potential liability for past taxation issues.

And then there is the issue of how a new owner can get their investment back.

Who should view?

Legal professionals involved in business restructures, sales, or the sale of an interest in a business.

Learning Outcomes

In respect of valuations:

• Become better at identifying areas where the business has key reliance.
• Gain a sounder understanding of the difference between the business and those who finance it, including understanding current accounts, retained earnings, and how owners get funds out of the business.
• Develop a better understanding of the importance of imputation credits, carried-forward losses and the continuity thresholds where they are lost.
• Build a deeper understanding of how profits and value might be manipulated by one party, including through:
  • items in the profit and loss account;
  • items on the balance sheet; and
  • discount rates
• Expand your knowledge in respect of shareholder exits – reading the financial statements and advising a shareholder in relation to exit, what to watch out for and making sure that they get what is owed to them.
• Advance your knowledge of shareholder entry – understanding issues which face new shareholders.
• Bolster your understanding of goodwill.
• Improve your understanding of how the value of assets presented on the balance sheet will often not agree to the market value thereof.

Presenter Details

Presenter

Shane Hussey | Director and Principal, Hussey & Co.

Presenter

Sian Heppleston | Analyst, Hussey & Co.