Your ownership is changing.
A partner buying in, stepping back or being bought out reshapes the ownership, the tax position and the way decisions get made. Get the valuation, the agreement and the tax treatment right and the change is clean. Get them wrong and it can sour the relationship and the books for years.
Not sure this is your moment? Start here
What's happening
- A new partner or shareholder is buying in, or an existing one is leaving or being bought out.
- You need a fair value for the share of the business changing hands.
- There are capital gains tax consequences for whoever sells or transfers their interest.
- Loan accounts, retained profits and any Division 7A loans need to be untangled before anyone exits.
- The shareholder or partnership agreement, and possibly the structure itself, needs to reflect the new line up.
What to think about
- 01
Agree how the share is valued
Most disputes start with disagreement over what the business is worth. A defensible valuation, based on earnings, assets and any goodwill, gives everyone a fair starting point. We prepare or review the valuation so the buy-in or buy-out price reflects reality rather than optimism.
- 02
Work out the capital gains tax position
Selling or transferring an interest in a business is a CGT event for the person disposing of it. Depending on how long they have held it and the size of the business, the small business CGT concessions can reduce or defer the tax considerably. We check eligibility early because it shapes the deal.
- 03
Clear the loan accounts and Division 7A
Where a company is involved, unpaid loan accounts and Division 7A loans must be dealt with before someone exits, or the departing party can leave a tax problem behind. We reconcile the accounts and put any required loan agreements or repayments in place first.
- 04
Choose the right structure for the new line up
A change of owners is a natural point to ask whether the current structure still fits. The way the incoming or remaining owners hold their interest affects tax, asset protection and future sale options. Sometimes a restructure now saves a great deal later.
- 05
Document the agreement and the exit terms
A clear shareholder or partnership agreement covers how decisions are made, how profits are shared, and what happens if someone wants out or passes away. Buy-sell terms and funding for them prevent the next transition from becoming a fight.
How we help with the change
Business succession planning
We manage the buy-in or buy-out, value the interest, and put buy-sell and exit terms in place that protect everyone.
ExploreTax planning and structuring
We work through the CGT, the small business concessions, Division 7A and the right structure for the new ownership.
ExploreBusiness advisory
We help you think through the strategic side, from how the change affects control to how the business runs afterwards.
ExploreQuestions we hear most often.
Have a question that is not here? Call 07 3399 2300 or book a consultation and we will answer it directly.
How do we work out what a partner's share is worth?
A valuation usually weighs the business's earnings, net assets and goodwill, adjusted for any debt and for the size of the interest changing hands. Having an independent, defensible figure is what keeps a buy-in or buy-out fair and out of dispute. We prepare or review the valuation as part of the process.
Will the partner who leaves have to pay capital gains tax?
Selling or transferring a business interest is a CGT event for the departing owner. The small business CGT concessions can substantially reduce or defer that tax where the eligibility tests are met, including the turnover or net asset thresholds and how long the interest was held. We check this early because it affects how the deal is best done.
What is Division 7A and why does it matter when a partner exits?
Division 7A treats certain loans and payments from a private company to its shareholders or their associates as deemed dividends unless they are on complying terms. If a departing owner has an outstanding loan account, it needs to be repaid or put on a complying loan agreement before they exit, or it can create an unexpected tax bill.
Do we need a new shareholder or partnership agreement?
Almost always. A change of owners is the moment to set out how decisions are made, how profits are split, and what happens on a future exit, death or dispute. A clear agreement with funded buy-sell terms protects the remaining owners and makes the next transition far smoother.
Change owners cleanly, and protect what you have built.
Whether someone is joining or leaving, we value the interest, sort the tax, and document the deal so the transition is fair and final. Book a consultation before anything is signed.