In this episode of the Calm the Pharm podcast, host Sarah Stoddart discusses the critical decision of selecting the right business structure for pharmacists venturing into pharmacy ownership. She emphasises the importance of making this decision carefully as it can significantly impact taxation, personal liability, funding options, and the future sale of the business.
Stoddart outlines three primary business structures: sole trader, partnership, and company. Each structure has its advantages and trade-offs.
Key considerations for pharmacy owners include:
- Ownership Rules: Understanding state-specific legislation governing pharmacy ownership.
- Share Structure: Determining the distribution and rights associated with shares, especially important in pharmacy businesses due to regulatory constraints.
- Directors' Duties: Knowing the legal responsibilities, including care, diligence, and conflicts of interest.
- Exit Strategies: Planning for the future sale or transfer of the business, which is crucial for multi-shareholder companies and should be outlined in a shareholder's agreement.
- Financial Planning: Consulting accountants on profit distribution, salaries, and dividends, ensuring clarity on financial matters.
- Seeking Professional Assistance: Engaging a lawyer for legal setup and compliance, and possibly a business advisor to align structures with growth objectives.
In conclusion, Sarah states that selecting an appropriate structure can provide protection, flexibility, and credibility for pharmacy owners, laying a solid foundation for their business journey. She encourages entrepreneurs to seek the necessary support as they start their pharmacy ventures.
Calm The Pharm is brought to you by your host, Sarah Stoddart. Sarah is the founder and director of Vitality Law Australia, a boutique law firm which provides small business owners and healthcare professionals across Australia with clear legal pathways and peace of mind. She is recognised as a leader in the healthcare industry and is one of only a few lawyers in Australia with specialist experience working with pharmacy businesses.
In 2021, Sarah was named the Lawyers Weekly Women in Law Australian Sole Practitioner of the Year. She was also named as a finalist in the AusMumpreneur Business Awards. In 2022, she was named as a finalist in the Women in Business Awards for The Hills and Districts Chamber of Commerce, the Australian Law Awards and again in the Women in Law Awards.
Sarah is the co-author of business book, “Courage and Confidence”. The book is a collection of inspirational stories combined with practical tools, tips and advice written by a small group of Australian women in business. She is also a non-executive director of MS Queensland.
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