QLD Commercial Law - Rights of a Minor Shareholder?

[StaceyKeat]

Many thanks for sharing your thoughts. I'll go back to them with some more questions about how they came to that figure as it seems low considering what the business is generating. I did get a quote for legal advice but it was way out of my budget.

The JV is with a legal firm and the major shareholder is an accountant, so I'm just trying to be as well prepared as I can. Many thanks again for your valuable insights and time.

 

[Rod]

Do you mind sharing what the quote size is? And type of law firm (Suburban, small business advisors, mid tier, top tier)? I'm interest in how much lawyers charge for this kind of advice.

 

[StaceyKeat]

It was a $1,700 mid tier. Included review of the shareholder agreement.

 

[Rod]

OK, ta.

 

[StaceyKeat]

Rod has given me some much-needed clarity from where I started.

Any other suggestions or insights are most welcome.

 

[Rob Legat - SBPL]

The form of the transaction will need to be carefully considered, depending on what it is that the JV will be doing.

In Queensland, for example, multi-disciplinary partnerships (MDPs) of legal and non-legal services are allowed - but not between corporations (because the laws haven't caught up yet, and there's a technical exclusion). You can have MDPs of persons, however. Or, you can create an incorporated legal practice with legal and non-legal directors; but this may involve one party giving up their existing structure.

The Queensland Law Society has some information books available on their website: Law practice structures — Queensland Law Society

Hard to tell without a solid consideration of the actual facts, but food for thought for you. Given that these can get very complicated, the quote you've received is not unreasonable. You may also want to consider independent financial and taxation advice.

 

[StaceyKeat]

The form of the transaction will need to be carefully considered, depending on what it is that the JV will be doing.

In Queensland, for example, multi-disciplinary partnerships (MDPs) of legal and non-legal services are allowed - but not between corporations (because the laws haven't caught up yet, and there's a technical exclusion). You can have MDPs of persons, however. Or, you can create an incorporated legal practice with legal and non-legal directors; but this may involve one party giving up their existing structure.

The Queensland Law Society has some information books available on their website: Law practice structures — Queensland Law Society

Hard to tell without a solid consideration of the actual facts, but food for thought for you. Given that these can get very complicated, the quote you've received is not unreasonable. You may also want to consider independent financial and taxation advice.

 

[StaceyKeat]

Thanks Rob. Great food for thought and I'll read up on MDPs.

 

[StaceyKeat]

Any thoughts on the options I've been asked to consider are greatly appreciated. I feel like I'm being strategically shafted.

I currently have a 15% shareholding. Capital injection spurred by a loose JV agreement with a law firm where each party provides technical and compliance support to joint clients. I've previously worked in the business and am not that keen go back. But if I don't, I lose half my shareholding.

1. Combo of reduced holding and time in leiu
Shareholder 1 - 80%
Shareholder 2 (new, has been working in the business) 10%
Shareholder 3 (me) 10% plus me providing 17 hours per month at a salary of $90,000

2. No time in leui but reduced shareholding
Me - 7% (offered an hourly rate if they need me to do any work).

 

[omedo]

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