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HOUSING INDUSTRY ASSOCIATION – ASSET PROTECTION 17 June 2015 | businessdepot.com.au/buildingandconstruction

SICK OF MISSING THE MARK?[Grow your building and construction business on solid foundations with help from our industry experts.]

MICHAEL GARRONEHead of Building & Construction

- Contractors - QBCC- Small to medium businessm.garrone@businessdepot.com.au(07) 3193 30020404 869 255

@mgarrone

BUILDING & CONSTRUCTION

• The industry

• The good, bad and ugly

• Before & after 2007

• All types of businesses

• Start-up, growing, sale or succession

• One man contractor to big business

WAR STORIES

ASSET PROTECTION

• Why do it

• What are the risks

• What you can do about it

• How do you do it

WHAT WE WON’T COVER TODAY

• Running your business

• Key customer risk

• Contract size

• Contractual risk

• Supplier risk

• Debtor risk

WHAT WE WON’T COVER TODAY

• Business Succession

• Life insurances – tpd, trauma

• Wills & EPA’s

?

WHY ASSET PROTECTION

B & C Risk

low medium high?

QBCC + Legislative

Change

RECENT TRENDS – 764 CO’S -

SOURCEABLE.NET

“DOR OF CAVALIER HOMES TO PAY $1.3M FOR 40 STRANDED HOME OWNERS”

- QBCC JULY 2014 ISSUE

“DOR OF STANGLADE CONSTRUCTIONS ORDERED TO PAY $1.3M FOR DEFECTIVE WORKS”

- QBCC JULY 2014 ISSUE

“CARMICHAEL BUILDERS IN VA”

- 12 JUN 2015 COURIER MAIL

PEACE OF MIND

RISKS

WHAT ARE THE RISKS

• QBCC

• Licence

• Deeds of Assurance

• QBCC Insurance

• Statutory Warranty – 12 month & 6 years

WHAT ARE THE RISKS

• Directors liability

• Directors penalty notices – PAYG withholding & Superannuation

• Insolvency

• Workplace health & safety

• Personal guarantee’s

LOW MEDIUM HIGH?

EXERCISE

ASSETS

[ LIABILITIES ][ SECURITY + GUARANTEES

]

SECURITY + GUARANTEES

• Supplier accounts

• QBCC deeds

• QBCC insurance

• Bank debts – business / personal

BUSINESS ASSETS

• QBCC Licence

• Cash

• Debtors / WIP / Stock

• Plant & Equipment

Common Problems

IT WILL NEVER HAPPEN TO

ME

BUSINESSMANAGEME

NT

OVER EXTENDING

POOR STRUCTURING

UP-FRONT

Where

PROTECTED TO THE MAXIMUM EXTENT POSSIBLE

• It isn’t criminal to protect your assets

• But last minute transfers might be different

• Accept the risks

How

IDENTIFY RISKS

ASSESS RISKS

TAKE ACTION

MONITORING

EXAMPLES

EXAMPLES

• Solid Foundations

• Maintenance

• Renovations & Extensions

• Demolition & Rebuild

SOLID FOUNDATIONS

BEFORE

50%50%

Husband Wife

Company

50%50%

Husband Wife

Home

Home security & debt

QBCC Deed

AFTER

100%

Company ATF Trust

Company

100%

Wife

New Home

Plan in Place to remove deed

QBCC Deed

MAINTENANCE

BEFORE

100% Share

Company ATF Trust

Company

Assets

Loan Husband & Wife $400,000Loan Trust $100,000

AFTER

100%

Company ATF Trust

Company

Assets

Loan Husband & Wife $0Loan Trust $0

RENO’s & EXTENSIONS

BEFORE

100%

Company ATF Trust

Company

$2m Retained Profits$0.5m QBCC Net Assets Required

AFTER

$1.5m Dividend

Company ATF Trust

Company

Company$1.5m Distribution

$1.5m Loan - Secured

$0.5m Retained Profits$0.5m QBCC Net Assets

Company ATF Trust

$1.5m Retained Profits

DEMOLITION & REBUILD

BEFORE

100%

Company ATF Trust

Company Litigation

BEFORE

100%

Company ATF Trust

Hold Company

New Company

Old Company

Plant Equipment

What’s Important!

“QBCC LICENCE”TIP 1

Stay financial

“SOLE DIRECTOR COMPANIES”

TIP 2Constitution

Upgrade

“DON’T OWN ASSETS IN YOUR OWN NAME” TIP 3

All Assets!

“TRUSTS ARE ESSENTIAL”

TIP 4Shares &

Investments

“TIMING”TIP 5

The sooner the better

“IT’S A JOURNEY NOT A DESTINATION” TIP 6

Ongoing review

Costs?

COSTS

• Lose your home / retirement

• Spouse leaves you

Use picture

INCOME TAX / CAPITAL GAINS TAX

STAMP DUTY

GST

IMPLEMENTATION COSTS

Costs

Risks

HOW DO WE DO IT

• Financial health check

• Recommendations

• Implementation

HOW DO WE DO IT

• 30 minutes free catch up face to face or email

• Working jointly with Nick Stone @ Stone Group lawyers:

• Review

• Implementation

WHO WE HELP – BUILDING AND CONSTRUCTION

• Residential & Commercial builders

• Contractors – Tiling, Air-conditioning, Electrical, Plumbing, Fencing – you name it

• High-rise

• Franchise groups

• Other accountants & advisors

WHO ELSE

• Real Estate

• Property Developers

• Small to Medium businesses – start-up, growing, big, sale or succession

?

THANK YOU!Let’s Get Social @business_DEPOT

businessdepot

businessdepot.com.au

Michael Garronem.garrone@businessdepot.com.au(07) 3193 30020404 869 255

businessdepot.com.au/buildingandconstruction

Josh Smithj.smith@businessdepot.com.au(07) 3193 3051

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