“My business partner and I have no idea about tax. We have no idea about structuring, asset protection or capital gains. We do know about construction, project management and building. When someone needs a building job completed, they can call us and have the peace of mind they don’t have to worry about a thing. When we have queries about tax, structuring and our accounting systems we know that 542 Partners ensure we have the best possible solutions to suit our circumstances”
Unique Building Partners identified a growth opportunity with another builder interested in partnering as a 50% shareholder.
The existing business was set up as a sole trader. As a result of this new partnership opportunity, 542 Partners converted Unique Building Partners from a ‘sole trader’ to ‘company’.
A company is a separate legal entity, which means that it owns its own assets and debts. As a result, if the company has debts your personal assets generally won’t be used to pay them off. As two partners were coming into the business, a company structure was the best decision to protect each director’s personal possessions from being used to pay debts.
After reviewing the business agreement, 542 Partners needed to determine if the new partner was going to pay any capital or if the existing owner would be paid out all profit on all jobs to date and future profits would be split 50/50.
Once it was established the existing partner was entitled to profit on all jobs up to an agreed date, we then had to determine the work in progress and job profitability.
The solution + Result
The end result is a successful building company with two partners who are now able to focus on doing what they do best.
Our clients now know they are operating under the right structure with their personal possessions being protected.
Unique Building Partners have since referred two of their subcontractor businesses to 542 Partners, who have all had their structures and accounting systems established by us as well as trusting us to look after all of their business and personal ongoing compliance affairs.