SUPERCentral legal services are provided by TOWNSENDS BUSINESS & CORPORATE LAWYERS
$660.00 - $990.00
Buy/sell arrangements set the ground rules between co-owners of a business (shareholders in a company, partners in a firm or unitholders in a unit trust) as to what is to happen if a co-owner dies, becomes totally and permanently disabled or suffers some illness or trauma that will likely require them to leave the business. Fundamentally buy/sell arrangements deal with when and how the other co-owners will acquire the interests of the outgoing or disabled co-owner in the business.
There are two key aspects to a buy/sell arrangement: the transfer agreement, which sets out how the business interest will be transferred to the continuing co-owner(s), and the funding agreement, which details how the continuing co-owner(s) will obtain the money necessary to buy out the outgoing co-owner’s share. There are various ways to structure a buy/sell arrangement and the trick is to choose the method that best suits the co-owners' circumstances.
In particular, co-owners should consider whether to hold the insurance that supports the buy/sell arrangements inside their self managed superannuation fund.
There are some material benefits of holding insurance inside a SMSF including:
- concessional contributions can be made to the fund and premiums may be tax deductible to the fund, meaning effectively nil contributions tax on the pre-tax contributions;
- proceeds are available in low tax and ultimately no tax environment;
- proceeds are quarantined from the outgoing co-owner’s debts and other legal liabilities; and
- even if excess contributions tax is paid, the benefits of the proceeds inside super may still be worthwhile.
TOWNSENDS BUSINESS & CORPORATE LAWYERS have developed specific advice and tailored documentation suitable for the implementation of buy/sell arrangements to ensure the future of your business
- Fill in online order form or download instruction sheet
- Choose your payment option
- Townsends Lawyers will contact you to discuss your requirements