Restructuring a partnership for an exit and fresh start

Key services

  • Company liquidation
  • Shareholder distributions
  • Business restructure

Business partnerships can be effective ways for small businesses to scale and grow. The partnerships can bring new capital, capabilities, resources, and so on. Withdrawing from or dissolving a partnership requires several legal steps and resolving outstanding financial obligations, including debts and / or redistributing assets.

The challenge
A client’s business partner in a manufacturing business wanted to exit the business. The company operating the business had many pre-capital gain assets, which affects how the sale proceeds are distributed and taxed. Additionally, the client wanted to continue the manufacturing business in their capacity, requiring a new business entity to be formed.

The solution
Our first step was assisting the client in placing the company under a Member’s Voluntary Liquidation. Next, we worked with third-party shareholders to manage the process and calculate expected distributions to each shareholder, including pre-CGT capital distributions and distributions of retained profits.

We assisted the client in transitioning to a new company to continue the business, which involved setting up the new company and reviewing the valuation of stock and assets the new company would be purchasing. We also oversaw the necessary legal and administrative work, such as registering a business name and stamp duty. The client was greatly appreciative of our assistance with the wind-up of the old company and the transition, allowing him to help continue to build the business for his family’s legacy.