Succession planning, or walk off the farm empty handed!
Ultimately this is an important succession planning issue. If you are the last owner left think about the impact of not having another to replace you. Should you become ill or die what happens next….?
You or your estate will need to pay out your staff, sell the practice building your own (for a lesser value as it is no longer tenanted by you . Only doctors will pay a higher value for a purpose built property).
You may find yourself paying out the remainder of your property lease with your personal guarantees. These are problems you don’t want to face if you are ill or pass on to your next-of-kin to deal with.
For peace of mind encourage ownership and be PREPARED to sell down your interest and sleep better. We have sold well established part shares in practices from $100,000 to $500,000 with little haggling involved by either side. For more information contact us. Selling your practice is no different to selling your car. If you think it is a lemon people will believe you and offer very little for it.
If you do not present it properly with properly executed documentation and systems how can you expect somebody to pay a fair value for your practice? Many owners fail to understand the value of their practice and how to keep potential purchasers, partners in life, lawyers, bankers, and accountants happy. We provide a practice valuation service that will achieve this result for you.
To the contrary, are you worried about practice disputes or problems with the Tax Office? The most common pitfall is the wrong type of business model/structure is used for a practice. We have conducted many second opinions. We have helped many Practices guard against this type of problem.
When you come to us as a new client we provide a free initial assessment to determine if your practice has a serious flaw in its business structure or administration. We attach no obligation to this because we are confident we can address your critical needs and concerns. We have developed the optimum business structure that meets the commercial, succession planning and taxation requirements of our clients.
Despite the plethora of changes to tax and the commercial environment over the last 24 years we have not changed our advice and are more confident than ever our proposed structure(s) , templates and systems will meet your needs.
Most importantly they help you avoid disputes. A simple way to avoid disputes is to put everything in writing!
Unless you have all your arrangements in writing you will always be susceptible to challenge from your partners, contractors, deceased estates, staff and the Tax Office. Following are some recent court decisions:
- Contractor doctors being deemed to be employees for superannuation and payroll tax purposes. (The practice paid back seven years of superannuation to a contractor.)
- Owners unable to enforce a restraint of trade on an employee doctor who set up down the road.
- Associateships legally deemed to be partnerships. (Associates were co-joined in a negligence action.)
- Four doctors forced to buy out a deceased estate’s practice share for over $300,000.
- Owners arguing about profit sharing arrangements and unpaid practice work such as managing the practice.
How to avoid disputes – put it in writing!
The only solution is to put it in writing! See templates that we have produced with an independent law firm in the link below. We are not lawyers and you should seek a legal opinion on any templates. Clients use these templates to facilitate this process with their legal advisers.
For more information on the list of Template List. For more information read on…