Butlers Case Study: Advising a liquidator on the sale of a business
Due to a dispute between shareholders, a holding company was entering into liquidation. The company owned real property holdings and shares in two subsidiary companies. The liquidator sought our advice on three potential scenarios for the sale of the business:
- Selling the shares of two of shareholders to the four remaining shareholders equally; or
- Selling the group’s assets and business as a going concern and distributing proceeds to shareholders via a Members Voluntary Liquidation; or
- Selling the group’s assets on a piecemeal (not going concern) basis and distributing proceeds to shareholders via a Members Voluntary Liquidation.
We advised the liquidator of the taxation implications of each of these potential options, including GST, CGT, stamp duty, small business CGT rollover, and retirement concessions. We also advise on risks of penalties under the tax avoidance provisions under Part IVA of the Income Tax Assessment Act 1936. We estimated the tax positions for each of these options so that the liquidator could make an informed decision that was in the best interests of shareholders.
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