Questions regarding Setting Up a Business Entity

[Mr Bigglesworth]

Im looking at setting up a business entity in NSW for the purposes of buying a business off a person who is in serious financial strife at the moment that is unrelated to the business. The problem is that this person is a relation of mine.

I want to set up a business in such a way that if this person ever goes bankrupt, I can continue carrying on the business, but beyond the reach of liquidators. Does anyone know what can be done here to ensure the highest level of anonymity and to safeguard myself against any possible legal action on account of my relations actions?

I would take over and own this business in my name, so that he doesnt lose it to possible future liquidation (which is looking very likely). I already know that it would be sensible to set up a PO Box as opposed to a residential address, however I am not familiar with how PO box systems work.

Any advice would be awesome. I plan to consult with a lawyer, but I want an initial assessment to see if its even worth considering.

[dozer]

buying the business will mean you then become responsible for the debt.

[Mr Bigglesworth]

buying the business will mean you then become responsible for the debt.

theres no debt on the business itself, only on the premises.

[dozer]

i assume the business own the premesis or has a lease, therefore you will still be liable for the debt.

[Mr Bigglesworth]

i assume the business own the premesis or has a lease, therefore you will still be liable for the debt.

No, the property is in my relations name and not owned by the business. The business only operates from the property. I want to buy the business (stock, licence and equipment) off my relation, operate it under a new business name trading as the old one, and lease the premises off him.

The plan is, if the property is liquidated, I still maintain control of the business for as long as the premises are leased out to me.

Make sense?

[ShinymetalASS]

Why not just buy the business and move to new premises?

[Afta Image]

Why not just buy the business and move to new premises?

Why not touch yourself and drink booze....

[Sagacious]

Im looking at setting up a business entity in NSW for the purposes of buying a business off a person who is in serious financial strife at the moment that is unrelated to the business. The problem is that this person is a relation of mine.

I want to set up a business in such a way that if this person ever goes bankrupt, I can continue carrying on the business, but beyond the reach of liquidators. Does anyone know what can be done here to ensure the highest level of anonymity and to safeguard myself against any possible legal action on account of my relations actions?

I would take over and own this business in my name, so that he doesnt lose it to possible future liquidation (which is looking very likely). I already know that it would be sensible to set up a PO Box as opposed to a residential address, however I am not familiar with how PO box systems work.

Any advice would be awesome. I plan to consult with a lawyer, but I want an initial assessment to see if its even worth considering.

It appears to me like you are proposing to set up a phoenix company...

That is to use the assets and goodwill of an existing business to run a 'new' enterprise in ostensibly the same area and doing ostensibly the same thing using ostensibly the same management and control although not the same directors effectively sending the old business down (or deep sixing it as we like to call it) and it's debts with it whilst retaining all the assets and goodwill (most importantly the goodwill etc.) in a new enterprise.

Is this correct?

[stevecai]

this is a really complex question. i don't think i can do you justice answering it because the facts are far too vague.

there are mechanisms for reversing transactions made by people which are not at arms length before they become bankrupt.

now. i need to know is this business a company? if so, it will have shares. buy the shares. then you own the whole company.

if you buy only the assets you won't actually own the company. plus if you are keeping it doing what its doing, you can use the losses to offset future income (I assume it has losses otherwise your relation wouldn't be in such strife). this is called the same business test.

you'll have all sorts of CGT, balancing adjustment and trading stock issues if you buy the assets. plus you might need the landlords consent if you are leasing to change the owner. there are also guarantors you'll need to change. there is so much stuff to do.

Rather than go on - tell me what you can about its corporate structure.