Q Solicitors

"A budget tells us what we can't afford, but it doesn't stop us from buying it."

William Feather

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This month we discuss the risks of being in business with a partner, and how to protect yourself and the business in a variety of situations.  We also ponder some myths concerning Family Law matters.

If you are in business then you most likely regard your business as an asset that at some stage will supplement your superannuation when you ultimately retire.

But what are the risks of that strategy? Have you adequately thought through the process?

Some questions to consider - very seriously!

If you are in business with someone else, what would be the impact if that person died or was incapable of continuing to be involved in the business as a result of disability or ill-health or divorce/separation?  It may be that the divorce of a partner causes disruption to the business.

• Would you be able to fund the "buy out" of their interest in the business?
• Do you have an agreed method of buyout calculation and payment
• What do you do about the shareholder/director loan accounts if any
• What about intellectual property rights. Do they pass to the "new Business"?
• Would the estate be willing (or even able within a suitable time frame) to sell?
• Would you end up in business with the deceased partner's spouse, doing all the work for half the profit?
• What extra influence would be exerted on you if that spouse remarried?
• What if the boot was on the other foot and it was you who had died?
• How would your spouse and family fare if they still owned your interest in the business?
• Could your business survive?

If you rely on someone else's unique skills or connections to make the business viable, what would happen if that person died or was incapable of continuing to be involved in the business as a result of disability or ill-health?

• Could you readily replace those skills or remake those contacts?
• Would revenue reduce and turnover drop off?
• Would customers take their business elsewhere?
• Would your product or service still be deliverable?
• Would the capital value of your business suffer?
• Could your business survive?

If you have borrowed money to fund equipment or working capital or given personal guarantees to a lender or supplier, what would happen if your business partner died or was incapable of continuing to be involved in the business as a result of disability or ill-health?

• Would your lender ask for the loan to be repaid?
• If you couldn't repay would your personal guarantee mean you lose your home?
• Would suppliers cut off your credit and close your accounts?
• Would you qualify to refinance the loan in your own right?
• Could your business survive?

The events we have described are threats to you, your family, and your financial and emotional wellbeing. And yet a sensible risk management strategy can help reduce them to manageable proportions.

Q Solicitors, in conjunction with Michael Bailey of The BKO Group will address these issues at a "Risky Business Briefing" at Vue Lounge, Merthyr Village, New Farm on Tuesday 31st May at 5.45pm for 6pm.  The duration of the briefing is 45 minutes, however, will be most beneficial to anyone in business or considering entering into business.

If you wish to attend, please click here to RSVP or phone Q Solicitors on 3358 2399.  Numbers are limited to 20, so you will need to get in quick.

After an electrician finished repairing some faulty wiring in a Solicitor's home he handed him the the bill. "Five hundred dollars! For an hour's work?" cried the Solicitor, "That's ridiculous! Why I'm a Solicitor and I don't make that much."

"Funny," replied the electrician, "when I was a Solicitor, I didn't either!"

There are so many stories and myths circulating about family law myths which can mislead or cause concern to those not "in the know".  Below we "bust" some of these myths.

All Family Law Disputes end up in Court?

False.  Of the 60,000* divorces and separations of de facto couples each year, only about 5% go to court and have a judge make decisions about their lives. (*approximately).

Property is divided up equally.

False.  Equal division may appear "fair", however, many factors such as care of children, assets prior to marriage and income potential may affect the division. 

The Mother always gains custody of the children.

False.  Judges of the Family Court are not biased in favour of mothers. Australian Mothers tend to be responsible for more overnight care of children each year than fathers.

Wives end up with more than husbands after a divorce. 

False.  In many cases, the husband financially recovers more quickly than the wife due to full time employment, higher wage, more accumulation of superannuation, etc.

I should leave it to the Court decide who gets what?

False. There are simpler and cheaper ways of reaching a property settlement than going to Court.  Your Solicitor can help you reach an agreement.  Only go to Court if there is no other choice.

If you would like any further information relating to Family Law matters click here.

For your chance to win two tickets to "Thrifty Threads Gala Ball" at Lightspace, 30 Light Street, Fortitude Valley for tomorrow night 14th May, 2011, be the third to email us at enquiries@qsolicitors.com.au with the subject line "Thrifty Threads Gala".  Tickets are valued at $95 pp and include fine cuisine, drinks on arrival and funky entertainment by "Groove Elements" .  More information on this event is available at: www.thriftythreads.com.au

Do you have any legal questions you would like to ask?  Perhaps you would like us to discuss a particular topic in our next newsletter.  Let us know how we can help by sending an email to:  enquiries@qsolicitors.com.au

Click here to catch up.

"Every leaf speaks bliss to me,
Fluttering from the autumn tree."
Emily Bronte

Regards,

Q Solicitors
9/14 Macquarie Street Teneriffe QLD 4005
Phone: 07 3358 2399
Email: enquiries@qsolicitors.com.au
Web: qsolicitors.com.au