A recent government initiative now allows parents to apply for an IRD number for their new baby at the time they register their baby’s birth. Parents simply tick a box on the birth registration form and supply a small amount of extra information. This will mean that once parents have received the IRD number they can immediately apply for Working for Families Tax Credits, KiwiSaver or open a bank account for their baby. It is also more cost effective for parents as they no longer have to purchase a birth certificate to apply for an IRD number and the process is generally more user friendly.
IRD has recently added video clips to their website. These video clips cover the following topics;
To which of your competitors do you think you could sell? Are there larger companies who would be interested in purchasing your business on a ‘trade sale basis’? Should you be considering an IPO (Initial Public Offer)? Could a staff team member or members be interested in buying your business? To get an understanding of what your business is worth, it is good management practice to have your business independently valued annually. This gives you a realistic appraisal of what the business is worth in the market place. Business valuations normally use multipliers based on Price Earnings Ratios for public companies, with appropriate adjustments being made for a business being operated as a private company. Public companies are normally valued at a higher multiplier because of the requirements for higher levels of corporate governance, accountability and the necessity to keep the public continually informed. However, many private companies have been able to significantly increase their valuation by adopting many of the attributes of a listed public company - audits, corporate governance, accountability, management team training, external directors etc., so that the business is able to be valued at a higher price earnings multiplier. This can be achieved by implementing systems and strategies to run the business efficiently, thus significantly contributing to an increased valuation for that business. Example: The All Ordinaries Price Earnings Ratio for public companies on ASX at 5th October 2010 was 16.15. An ‘average’ public company earning an after tax profit of $1M would be valued at $16,150,000. A company about to complete an Internal Public Offer is ‘normally’ valued at about 2/3 of the ‘all ordinaries index’ which would be 10.76. Such a company with an after tax profit of $1M would be valued at $10,760,000. A private company is normally valued at 1/3 of the public company ratio. In this example, a private company with an after tax profit of $1M would be valued at 5.38 (16.15 ÷ 3) X $1M = $5,380,000. A private company which has adopted many of the attributes of a public company (audits, higher corporate governance, management team training, external directors, regular board meetings etc.) might be able to argue that the valuation multiplier should be higher than 1/3 of ‘all ordinary price index’ and closer to the value of a company undertaking an IPO, say 8 times. The private company's valuation could then be after tax profit $1M x 8 = $8M. If you are planning to sell your business in the next 3 years, now is the time to start the planning process. If you would like to have a discussion with us regarding the development of a strategy to maximise the sale value of your business, please do not hesitate to contact us.