Page 1
@business_DEPOT businessdepot businessdepot.com.au
HOUSING INDUSTRY ASSOCIATION – ASSET PROTECTION 17 June 2015 | businessdepot.com.au/buildingandconstruction
Page 2
SICK OF MISSING THE MARK?[Grow your building and construction business on solid foundations with help from our industry experts.]
Page 3
MICHAEL GARRONEHead of Building & Construction
- Contractors - QBCC- Small to medium [email protected] (07) 3193 30020404 869 255
@mgarrone
Page 4
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
Page 7
ASSET PROTECTION
• Why do it
• What are the risks
• What you can do about it
• How do you do it
Page 8
WHAT WE WON’T COVER TODAY
• Running your business
• Key customer risk
• Contract size
• Contractual risk
• Supplier risk
• Debtor risk
Page 9
WHAT WE WON’T COVER TODAY
• Business Succession
• Life insurances – tpd, trauma
• Wills & EPA’s
Page 11
WHY ASSET PROTECTION
Page 12
B & C Risk
low medium high?
Page 13
QBCC + Legislative
Change
Page 14
RECENT TRENDS – 764 CO’S -
SOURCEABLE.NET
Page 15
“DOR OF CAVALIER HOMES TO PAY $1.3M FOR 40 STRANDED HOME OWNERS”
- QBCC JULY 2014 ISSUE
Page 16
“DOR OF STANGLADE CONSTRUCTIONS ORDERED TO PAY $1.3M FOR DEFECTIVE WORKS”
- QBCC JULY 2014 ISSUE
Page 17
“CARMICHAEL BUILDERS IN VA”
- 12 JUN 2015 COURIER MAIL
Page 20
WHAT ARE THE RISKS
• QBCC
• Licence
• Deeds of Assurance
• QBCC Insurance
• Statutory Warranty – 12 month & 6 years
Page 21
WHAT ARE THE RISKS
• Directors liability
• Directors penalty notices – PAYG withholding & Superannuation
• Insolvency
• Workplace health & safety
• Personal guarantee’s
Page 24
ASSETS
[ LIABILITIES ][ SECURITY + GUARANTEES
]
Page 25
SECURITY + GUARANTEES
• Supplier accounts
• QBCC deeds
• QBCC insurance
• Bank debts – business / personal
Page 26
BUSINESS ASSETS
• QBCC Licence
• Cash
• Debtors / WIP / Stock
• Plant & Equipment
Page 28
IT WILL NEVER HAPPEN TO
ME
Page 29
BUSINESSMANAGEME
NT
Page 31
POOR STRUCTURING
UP-FRONT
Page 33
PROTECTED TO THE MAXIMUM EXTENT POSSIBLE
• It isn’t criminal to protect your assets
• But last minute transfers might be different
• Accept the risks
Page 35
IDENTIFY RISKS
ASSESS RISKS
TAKE ACTION
MONITORING
Page 37
EXAMPLES
• Solid Foundations
• Maintenance
• Renovations & Extensions
• Demolition & Rebuild
Page 38
SOLID FOUNDATIONS
Page 39
BEFORE
50%50%
Husband Wife
Company
50%50%
Husband Wife
Home
Home security & debt
QBCC Deed
Page 40
AFTER
100%
Company ATF Trust
Company
100%
Wife
New Home
Plan in Place to remove deed
QBCC Deed
Page 42
BEFORE
100% Share
Company ATF Trust
Company
Assets
Loan Husband & Wife $400,000Loan Trust $100,000
Page 43
AFTER
100%
Company ATF Trust
Company
Assets
Loan Husband & Wife $0Loan Trust $0
Page 44
RENO’s & EXTENSIONS
Page 45
BEFORE
100%
Company ATF Trust
Company
$2m Retained Profits$0.5m QBCC Net Assets Required
Page 46
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
Page 47
DEMOLITION & REBUILD
Page 48
BEFORE
100%
Company ATF Trust
Company Litigation
Page 49
BEFORE
100%
Company ATF Trust
Hold Company
New Company
Old Company
Plant Equipment
Page 50
What’s Important!
Page 51
“QBCC LICENCE”TIP 1
Stay financial
Page 52
“SOLE DIRECTOR COMPANIES”
TIP 2Constitution
Upgrade
Page 53
“DON’T OWN ASSETS IN YOUR OWN NAME” TIP 3
All Assets!
Page 54
“TRUSTS ARE ESSENTIAL”
TIP 4Shares &
Investments
Page 55
“TIMING”TIP 5
The sooner the better
Page 56
“IT’S A JOURNEY NOT A DESTINATION” TIP 6
Ongoing review
Page 58
COSTS
• Lose your home / retirement
• Spouse leaves you
Use picture
Page 59
INCOME TAX / CAPITAL GAINS TAX
STAMP DUTY
GST
IMPLEMENTATION COSTS
Page 61
HOW DO WE DO IT
• Financial health check
• Recommendations
• Implementation
Page 62
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
Page 63
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
Page 64
WHO ELSE
• Real Estate
• Property Developers
• Small to Medium businesses – start-up, growing, big, sale or succession
Page 66
THANK YOU!Let’s Get Social @business_DEPOT
businessdepot
businessdepot.com.au
Michael [email protected] (07) 3193 30020404 869 255
businessdepot.com.au/buildingandconstruction
Josh [email protected] (07) 3193 3051
Page 67
PLAIN TALKING, ENERGETIC & PROACTIVE[Some of us happen to be accountants too]
Page 68
YOU DON’T KNOW WHAT YOU DON’T KNOW[that’s where we come in]
Page 69
NO ROBOTIC MUMBO JUMBO[we take a human approach to you and your numbers]
Page 70
OUR BUSINESS IS ALL ABOUT IMPROVING YOURS
[unleash your potential]
Page 71
GREAT ACCOUNTING SHOULDN’T FEEL LIKE ROCKET SCIENCE
[but it can be an awesome launch pad]