PONSONBY PROFESSIONALS

LOGAN GRANGER: What a year it has been!

We have all been impacted by the prolonged Auckland lockdown in our business and personal lives.

With the lead up to the Christmas season, it’s important to reflect, reconnect with our loved ones, recover and create a positive mind-set for 2022.

We hope you’re able to take some time for rest and relaxation this summer, whether it be in Auckland or outside our Auckland borders.

Below are a few updates to be aware of:

Regional Business Partner Network funding The Government announced that there is another $60m in the Covid-19 kitty for funding of business support services for Auckland businesses via the Regional Business Partner (RBP) network, in the vicinity of $3,000 to a maximum of $7,000 per business (the grants are not a loan and don’t have to be repaid).

Johnston Associates have three services available to you and your business(s) at this point, under the Covid-19 banner, they are:

1. Business Continuity Planning 2. Finance and Cashflow Management 3. Masterminding Financial Business Planning

If you are registered with RBP already, please log in and confirm your details www.regionalbusinesspartners.co.nz

If you or your business is not registered, please do one of the following:

1. Register online here at RBP web.regionalbusinesspartners.co.nz/business 2. Phone 0800287467 3. Email info@regionalbusinesspartners.co.nz

It is important to at least be registered, as funding is limited. If you require any assistance or have any questions please contact our team.

Voidable transactions: a summary of recent and upcoming legislative changes The regime surrounding voidable transactions has recently been amended, with further legislative changes anticipated to follow in the next year.

What are voidable transactions? If a business is placed in liquidation, the liquidator may require the creditor to repay all or some of the payments (or other monetary or non-monetary benefits) received by the creditor from the liquidated company. This is known as the liquidator’s power to clawback preferential transactions and is provided for under s292 of the Companies Act 1993.

Voidable transactions (or liquidator’s clawback) regime is designed to protect creditors against the tendency of the directors of troubled companies to pay themselves and their favourite or aggressive creditors before anyone else.

Voidable transactions are transactions which a liquidator is able to undo (or “void”). They are transactions which have led to an unequal distribution of an insolvent’s assets to its creditors. Where a transaction is undone, the resulting funds are put back into the insolvent estate to be shared between creditors equally and in accordance with the statutory framework.

Changes in summary: Are you a related party? You may not have been before these changes were introduced, but a new definition captures a much broader group of people as “related”, including step relations of directors and senior managers, and their more remote family members such as grandparents, cousins, nieces/nephews, aunts/uncles – and even their spouses.

The look-back periods which apply to voidable transactions have changed, and now depend on whether the counterparty is related to the company or not.

Depending on the types of corporate transactions that are unwound:

· The look-back period for transactions with unrelated parties decreases from two years to six months. · The look-back period for related party transactions will remain at two years prior to the commencement of liquidation, but that is expected to increase to four years when further legislation is passed into law.

Business health check Take a look at your cashflow forecast and tax obligations over December-January, especially if you are impacted by seasonal revenue (such as Christmas revenue as a retailer). Both November and December GST are due for payment in January as well as provisional tax. If you are concerned you may not be able to pay the tax due, please let us know and let’s look at your options.

From the team here at Johnston Associates, we wish you all a very Merry Christmas and a Happy New Year!

Disclaimer – While all care has been taken, Johnston Associates Chartered Accountants Ltd and its staff accept no liability for the content of this article; always see your professional advisor before taking any action that you are unsure about.

JOHNSTON ASSOCIATES, 202 Ponsonby Road, T: 09 361 6701, www.jacal.co.nz