It feels like the end of the year has been overtaken by two fabulous world cups and an election. Some lovely weather has been a Godsend too.
Nonetheless there continues to be plenty of activity, most of it positive – not so if you are exposed to prevailing high interest rates, or having to compete in the supermarket business! As usual, what follows is a snapshot of items that have crossed my desk in the last 2 or 3 months (hence topical). I hope you find them of interest.
Aren’t political wavering fascinating. First, David Parker commissions the high net wealth information gathering request as a platform to support a capital gains tax. Then the Greens Party press for this to be extended to a wealth tax. Chris Hipkins evinces his concern at voter reaction by dismissing both a capital gains tax and a wealth tax. Grant Robertson and James Shaw are left fuming and David Parker asks to be removed as Minister of Revenue. Fascinating.
Yesterday, the Reserve Bank increased the official cash rate (OCR) by 75 points in what was a record individual rate hike. This pushes the OCR up to 4.25% and is a response to continued high inflation (7.3% in Q2 and 7.2% in Q3)…
The Trusts Act has now passed into law, the Court of Appeal decision in the Mainzeal (Jenny Shipley director’s liability case) is now imminent, the Supreme Court has granted leave to appeal for Frucor in its avoidance case and Eric Watson has announced his intention to write a book….
Motivation for company restructuring might be to survive, revive or thrive. The focus in this article is on restructuring in order to survive…
Suppliers to companies that fall into liquidation are exposed to a liquidator clawing back amounts paid to them…
Buying a business out of receivership involves vastly different features to customary business purchases. This article discusses the issues for a purchaser that are unique to a target company that is in receivership…
There are steps open to you as owner of a trading company to protect your investment in the company…
Capital raising for privately owned companies necessarily carries a tension between the amount of cash needed and the cost of obtaining it. The greater the equity in the company that is conceded, the greater the cost…
What should you do, as a supplier of goods or services where your customer is placed into receivership? How does the receivership affect a landlord which has granted a lease to a company that has gone into receivership…
The need to deal with creditors
The number one priority for companies with viable businesses that are unable to meet their debts is to deal with their creditors…
In my last newsletter I commented on proposed changes to the rules for look through companies (LTCs).
The requirements for New Zealand resident directors of all companies incorporated here have now come into force. so have the strengthened identification requirements that require directors to disclose their date and place of birth.
Share sale agreements invariably provide for an agreed price that presupposes a fixed working capital balance at settlement. That balance is often agreed to be zero which will require the purchaser itself to ensure funding of working capital is available immediately after settlement.
These are a commonly used vehicle for managing the respective interests and expectations of vendor and purchaser. Conceptually they are straight forward; practically they are anything but.
Groups of companies often strive for simplicity through the disposal of unwanted companies. How is that done?
Take a private company setting, say 3 individual sharheolders. One of the shareholders has begun to cause trouble. The other two shareholders want him or her gone. What can be done?
The starting point with any proposed joint venture is the choice of structure. The most common form of joint venture is an unincorporated joint venture (UJV). An alternative is to form a special purpose company for the purpose (or a limited partnership or trading trust might be used).
In the context of a business disposal, a top priority for the vendor is a clean exit free of concern about waranty claims.
Does this crystallise a tax liability?