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The Muster- Hilary Copland: Bannerman Cruickshank Pryde · The Muster on Hokonui

• 0:08
  Speaker 1: Gin Wigmore is the music this afternoon. That song there
• 0:11
  Speaker 1: is called Written in the Water. Well, a lot of
• 0:12
  Speaker 1: writing being done by our next guest, but talking in
• 0:16
  Speaker 1: more of a law sense than anything, of course, it
• 0:18
  Speaker 1: is Hilary Copeland of Bannerman Crookshank Pride, the lawyers who
• 0:22
  Speaker 1: we catch up with on a regular basis here on
• 0:24
  Speaker 1: the muster. Good afternoon. Hi, Andy.
• 0:27
  Speaker 2: How are you?
• 0:28
  Speaker 1: Yeah, going very well, thanks. September's gone, it's now October.
• 0:31
  Speaker 1: We're looking forward. That'd be the best way to say
• 0:34
  Speaker 1: it at the moment, I suppose.
• 0:35
  Speaker 2: Definitely want to look forward, not back, that's for sure.
• 0:38
  Speaker 1: Absolutely, and you might want to look forward as well.
• 0:41
  Speaker 1: You're talking about ownership structures today. Quite a bit to
• 0:44
  Speaker 1: entail with this, I'd imagine.
• 0:46
  Speaker 2: Yes, so I have recently advised a few clients in
• 0:50
  Speaker 2: relation to ownership structures, and that is not just a
• 0:54
  Speaker 2: job for a lawyer, but often the accountant has a
• 0:56
  Speaker 2: big part in that. But so that for me has
• 0:59
  Speaker 2: been advising farming clients, but also trade business, you know, electricians, builders.
• 1:05
  Speaker 1: Traders, yep. Yep.
• 1:07
  Speaker 2: And people invest a lot of time and money into
• 1:10
  Speaker 2: buying the land, the buildings, livestock, machinery, or whatever it is,
• 1:13
  Speaker 2: but equally need to put the time and effort into
• 1:16
  Speaker 2: the ownership structure sitting behind it and get it right.
• 1:22
  Speaker 2: So I guess lots of people ring me and say,
• 1:26
  Speaker 2: What should I do? Or I'm going to do this,
• 1:28
  Speaker 2: and I will say why. So there's lots of options.
• 1:33
  Speaker 2: For a business, obviously the most common is a company.
• 1:36
  Speaker 2: For farmers, there's probably more options than normal. You could
• 1:40
  Speaker 2: have a company, a trust, a partnership, or a combination,
• 1:43
  Speaker 2: and they can all work very well, but it's just
• 1:44
  Speaker 2: important to get it right from the outset.
• 1:47
  Speaker 1: Okay, we're talking about owning something outright. What is the
• 1:50
  Speaker 1: biggest pitfall that you've seen when it comes to the
• 1:53
  Speaker 1: structure of a company or just outright ownership?
• 1:56
  Speaker 2: I guess that's a common misconception is that if you
• 2:00
  Speaker 2: own shares in a company, you're automatically responsible for running it.
• 2:05
  Speaker 2: And there's actually a big difference, if we're talking company ownership,
• 2:08
  Speaker 2: there's a big difference between being an owner of the
• 2:10
  Speaker 2: shares and being a director. So the shareholders own the business,
• 2:15
  Speaker 2: but the directors are responsible for day-to-day governance and making
• 2:19
  Speaker 2: key decisions. And look, this is a bit of a,
• 2:23
  Speaker 2: a bit of a, moving feast and there's lots of
• 2:28
  Speaker 2: parts at play but um being a director for example
• 2:31
  Speaker 2: imposes legal duties and sometimes that can bring personal liability
• 2:35
  Speaker 2: so you just got to stop and think okay you
• 2:38
  Speaker 2: know that you might have mum dad husband wife all
• 2:41
  Speaker 2: of you in there as a director and is that
• 2:43
  Speaker 2: necessary like why are they there so again I guess
• 2:47
  Speaker 2: to be honest it's a common theme in everything that
• 2:50
  Speaker 2: I talk about it's getting the right advice early to
• 2:53
  Speaker 2: make sure um things are done right. And I guess
• 2:57
  Speaker 2: when I say it like that, that is always my
• 2:59
  Speaker 2: message probably when I talk to you, Andy.
• 3:02
  Speaker 1: It's interesting you bring up the word governance. It's relevant
• 3:05
  Speaker 1: in a lot of things.
• 3:07
  Speaker 2: Yes, and I think you did right. That's the thing.
• 3:09
  Speaker 2: And I guess that sounds a bit serious, doesn't it,
• 3:11
  Speaker 2: when you talk about governance? But it doesn't matter what
• 3:14
  Speaker 2: you're doing, what your business is. That is true. You've
• 3:19
  Speaker 2: got to have someone making those key decisions. So What's
• 3:22
  Speaker 2: particularly relevant in a family farming business, for example, is
• 3:26
  Speaker 2: that roles can become blurred. So you might have mum
• 3:28
  Speaker 2: and dad and they've stepped back, but they're still making decisions. Or,
• 3:34
  Speaker 2: you know, I have that conversation, it's a regular question
• 3:39
  Speaker 2: when we're doing a farm succession, what is your role,
• 3:42
  Speaker 2: day-to-day role, going to look like? And practically what is
• 3:46
  Speaker 2: happening and then getting it right legally. Yeah. And so
• 3:50
  Speaker 2: it's important to have clarity around, you know, who's doing what,
• 3:53
  Speaker 2: who controls the business, who owns it, who's, as I said,
• 3:57
  Speaker 2: the day-to-day decision-making. And it's also worth thinking about where
• 4:02
  Speaker 2: the business is headed. Like, can we structure it to
• 4:05
  Speaker 2: future-proof it? And that might be a farm, but it
• 4:09
  Speaker 2: could be a tradie business. You know, if you've got, like,
• 4:12
  Speaker 2: that's what I'm seeing, obviously, I do a lot of
• 4:13
  Speaker 2: farm succession, but with businesses, bringing employees in is becoming
• 4:18
  Speaker 2: quite a common thing So again, getting good clarity early
• 4:23
  Speaker 2: on about that and how that will look and the
• 4:26
  Speaker 2: legals around that.
• 4:27
  Speaker 1: You can see a distinct correlation between ownership structure and
• 4:31
  Speaker 1: farm succession and the way they just interrelate.
• 4:34
  Speaker 2: Yeah, 100%. And I think that I always think when
• 4:39
  Speaker 2: I'm talking on here what's relevant. And as I've just said,
• 4:42
  Speaker 2: so much... There's so many, or my message is always that,
• 4:46
  Speaker 2: get good advice early, but also so much of what
• 4:50
  Speaker 2: I do in my job dealing with farming clients or
• 4:53
  Speaker 2: other clients, it's all, you know, it's all analogous and
• 4:57
  Speaker 2: it's just that we're dealing with a different beast depending on,
• 5:01
  Speaker 2: you know, where we're at. So I guess good ownership
• 5:06
  Speaker 2: structures aren't just about tax or asset protection, like that's
• 5:09
  Speaker 2: obviously a key thing, and that's sort of the knee-jerk
• 5:12
  Speaker 2: reaction to get right, but it's also about making sure
• 5:15
  Speaker 2: everyone knows their roles, that decisions are being made by
• 5:19
  Speaker 2: the right people, and the business can hum along like
• 5:22
  Speaker 2: we want it to. With farm succession, that's obviously a
• 5:27
  Speaker 2: transition from one generation to the next. As I just mentioned,
• 5:31
  Speaker 2: in a business, it's often about bringing in employees as
• 5:35
  Speaker 2: that succession plan. So... And it's not just one-size-fits-all, and
• 5:40
  Speaker 2: that's where your professional advisors are the key people to
• 5:45
  Speaker 2: have those conversations with early on.
• 5:47
  Speaker 1: How often have you seen ownership structures go wrong?
• 5:51
  Speaker 2: I'd like to say they don't go wrong, but you
• 5:56
  Speaker 2: might have some road bumps along the way. But a
• 6:00
  Speaker 2: big part of that is you're dealing with people. You're
• 6:02
  Speaker 2: dealing with real people, real lives. So that's why I
• 6:07
  Speaker 2: think those... practical questions, and that's probably my big piece
• 6:12
  Speaker 2: is I'd like to take the practical and the legal
• 6:16
  Speaker 2: and accounting and other stuff should back up what you're
• 6:19
  Speaker 2: doing practically. So, again, it's trying to make sure that
• 6:24
  Speaker 2: doesn't happen. I guess farming families or business owners spend
• 6:28
  Speaker 2: generations building their valuable businesses, so making sure the ownership
• 6:33
  Speaker 2: and governance structure is right is just as important as
• 6:36
  Speaker 2: looking after the the farm or business itself. And hopefully
• 6:39
  Speaker 2: it becomes a bit of a non-issue. If you put
• 6:43
  Speaker 2: in that time early at the start, it should just
• 6:46
  Speaker 2: tick along.
• 6:48
  Speaker 1: I'd imagine in your profession, Hilary, the C word, communication,
• 6:52
  Speaker 1: is probably one of the terms that is used the most.
• 6:54
  Speaker 2: 100%, and that's what I say so often to my clients.
• 7:00
  Speaker 2: It doesn't matter, you know, you could be doing a
• 7:03
  Speaker 2: relationship property, farm succession business, restructure whatever it is and
• 7:10
  Speaker 2: yeah I'm a big and I'm sure I've said this
• 7:13
  Speaker 2: before with you too Andy I'm a massive advocate for
• 7:15
  Speaker 2: transparency and open communication because yeah then you just everyone
• 7:23
  Speaker 2: knows where they're at.
• 7:24
  Speaker 1: Absolutely stay on the same plate now Bannerman Crookshank Pride
• 7:28
  Speaker 1: the lawyers Hilary where do people get in touch with
• 7:30
  Speaker 1: the team?
• 7:32
  Speaker 2: Check out our website, bplaw.co.nz, or pop in and see
• 7:37
  Speaker 2: us opposite New World in the new building.
• 7:40
  Speaker 1: Good on you, Hilary. Always good to catch up.
• 7:43
  Speaker 2: Awesome. Thanks, Andy.
• 7:46
  Speaker 1: Hilary Copeland of Bannerman Crookshank Pride, the lawyers. Always good
• 7:50
  Speaker 1: to catch up with the team as we do. As
• 7:53
  Speaker 1: is our next guest, Don Moore, farming down at Kennington.
• 7:56
  Speaker 1: You're listening to The Muster.