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Beauty product wholesaler & salon chain, Melbourne VIC
- Estimated Savings: Agreed net savings - $700,000
- Total Cost: Less than 10% of savings
- Case Type:ATO Debt
The directors of this firm became so involved in creating new profit channels, which brought about rapid growth and profit, that they overlooked their day-to-day business compliance. Distracted by their creative business ideas, the company accrued tax liabilities in excess of $600,000. The PAYG component would have bankrupted the directors (due to personal guarantees provided to their bank).
Through vendor finance, the assets were sold at realistic commercial valuations, and then reacquired by parties associated with the original owners. It was only the directors’ skills that gave the assets any value. No employees lost their jobs because of the financial distress. As a result of clear communication and understanding, customer relationships were undisturbed, 30 key employees were retained, and important suppliers continued to work with and support the business.