Risky Business and Asset Protection

history marlborough

The situation

A family owned construction company, considerable family property, and directors with no asset protection.

Construction can be a risky business. Margins can be tight, cashflow can be up and down, and there’s legal exposure everywhere.

There was no reason this business would fail. They were strong financially and they had no claims against them. However, legal exposure can come out of the blue. While the directors always intended to meet their obligations, they wanted asset protection in place in case of the worst.

What they needed

A restructure of the ownership of their assets to ensure that even in the worst case scenario they would only lose certain assets.

They thought they needed multiple family trusts, multiple companies, and a complicated structure. We wanted to minimise the complexity of the structure, while giving maximum protection.

How we helped

Firstly, we discussed what assets the family owned. It turned out they owned more than they through they did. Some assets were obvious (family home, business premises, rental property). Some were less obvious (a loan to their daughter to buy help her buy a property, their scaffolding, and earth working equipment).

We then identified who should own what asset, and how to make it happen without any unintended tax consequences.

We ended up with the family trust holding the shares in the business, the loan to their daughter, the family home, the rental property and the business premises. A new company was then formed to own the scaffolding and earth working equipment. The existing company was then left to run the construction business.

We also helped them work through their terms of trade, to make sure their scaffolding equipment was protected when rented out to customers.

They ended up with a structure which is easy to use and protects them moving forward. We guided them through the transition with a specific and actionable plan – rather than giving them a to-do list for them to work through on their own.

 

 

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