Agribusiness

Succession Planning

Operating and growing a business takes hard work. Whether you are a farmer, franchisee or food processor, you build up a lot of wealth in your business as the years (or even decades) go by. This is why it is so important that you have a plan in place for how the business is to carry on, when it comes time for you to exit the business.

At Fox and Thomas, we can help you achieve this with a detailed succession plan which allows you to transition out of the business with financial security, minimise the tax and duty costs, and ensure the business can continue to grow and expand for the next generation.

Plan

To begin the transition out of your business, planning ahead is vital to make sure the right action is taken at the right time to get the best result for all involved. You need to know what your goals are for the future to prepare and include those goals in your plan. Things to keep in mind when starting to plan:

• Understanding the business in its current state
• Ongoing objectives of the business
• Existing contracts and foreseeing any risks involved with the transition
• Future events that need to be planned for after the transition

The transition of the ownership or control of a business can take months or even years. In our experience, the sooner you start, the easier the transition is.

Communication

Communication is important to make sure everyone involved feels they are part of a united team, to provide a positive impact and to ensure morale and engagement with current employees and your business contacts stays high.

We then need to discuss the matter of ‘family’ vs ‘non-family’. If you have a family business, it will help to start discussing your long-term plans with your children and educating them about your business.

Teamwork

The inclusion of your accountant, lawyer, banker and other financial advisers in your succession plan are key to ensuring you arrive at a succession plan which is financially viable and that all parties are happy with. Keeping parties that are important to the business informed will maintain trust and loyalty within the business.

Review

A successful succession plan is one that is flexible and can be revised to accommodate potential changes. First, we need to do an assessment of structural positions, things like current staff/family dynamics, current assets, existing business operating finances and asset holdings. Ensuring we have all areas covered allows for a smooth plan that is easy to alter when needed.

Document

Once you have the ideas, goals and position set out from your business review, we can start to document and clearly define the responsibilities needed for the transition. You need to take into consideration documents that set out the:

• transfer of control or ownership of assets
• debt of the business
• predicted timeframes
• restructuring of existing entities /creation of new entities
• the payment of money to certain parties
• superannuation of family members

Implementation

It is important that the succession plan is implemented, maintained and reviewed with regular meetings to ensure the transition is progressing. Regular meetings will promote communication, reduce uncertainty, identify issues, generate solutions and generally keep the succession plan on track.

Rural Conveyancing

QLD and NSW

The Fox and Thomas Conveyancing Team provide efficient and precise advice on rural property and water entitlement transactions within the whole of Queensland and New SouthWales.

We understand the complexities of a rural property transaction and strive to provide a no-fuss, efficient property transfer process.

How to get ready

Whether you are buying or selling, we recommend you have critical conversations with your lawyer, financier, accountant and any other advisors you may have to discuss any potential requirements prior to committing to a contract.Consideration should be given to what is included or not included in a contract.

Examples of items to be specifically addressed in a contract include:

• plant, equipment and vehicles
• water entitlements
• vegetation restrictions or approvals
• contamination issues
• employees and employee entitlements
• any agreements that may be in place such as agistment, leases, water usage, cluster fencing, timber cutting, mining or mining exploration, service contracts, technology or radio agreements, management or consultancy agreements and supply contract for items like seed or fuel.

Early and precise planning proves for a smooth transaction.

Leasing

Rural leasing

Rural leasing is a key component of Fox and Thomas’s property practice. We assist rural clients throughout Queensland and New South Wales with:

• leases of agricultural land
• share farming agreements
• agistment agreements
• leases of water allocations in QLD and water access licences in NSW
• temporary trades of water
• leases of state land, including road licences and enclosure permits

We understand the specific terms that need to addressed in the lease or agreement, such as:

• are there extras to be included in the lease in addition to the lease of land, such as lease of water entitlements or machinery?
• which party will be responsible for repairs and maintaining infrastructure on the land such as pumps, irrigation pivots?
• which party is responsible for soil health, fertiliser applications, and weed management maintenance?
• are there any restrictions on the use of the land, such as stocking rate, type of livestock, chemical use and crop exclusions?
• what is the agreement on ownership of capital improvements at the end of the lease or share farming, if any is undertaken, such as construction of silos by the lessee?