As most Queensland pharmacists should know by now the Pharmacy Business Ownership Act 2024 (“the Act”) has been passed. However, it has not yet commenced and there will be a two-year period of adjustment after it commences.
Currently, the main provisions of the Act are expected to commence late this year.
We will in the coming weeks have a number of articles coming out on the significant effects of the Act and the changes that will potentially have to be made by pharmacy owners in Queensland.
As a starting point however, we have set out below what steps should be taken now depending on how a pharmacy business is currently structured.
Potential new pharmacy owners
The one thing that has to be done is get legal advice on what structure to use when purchasing your new pharmacy. This goes beyond the usual advice on using a company or a trust or a partnership. Pharmacy lawyers can make sure any structure, and the legal documents used to set it up, comply with the detailed requirements of the Act which has strict requirements that need to be complied with.
Pharmacists owned by companies
The shareholding of the company will need to be reviewed along with the constitution. In most cases, adjustments will need to be made for voting shares at a minimum. In other cases, the shareholders will need to be changed (which may have significant tax consequences). Detailed legal and accounting advice will be needed in those instances.
Pharmacists owned by trusts
The trust deed will need to be reviewed and almost certainly amended so that it is compliant with the Act. Legal and accounting advice is required to consider the effects of the required changes to the trust only being able to distribute to pharmacists and their close relatives.
Pharmacists with Franchise Agreements or Services Agreements
These need to be reviewed to make sure they are compliant with the requirements of the Act.
Start early
Please note that for some pharmacy owners the steps outlined above will reveal that substantial work needs to be done to restructure their pharmacy operations. While the Act will not be in force for some time, starting early will give pharmacy owners the best chance of reducing the significant costs, particularly the tax consequences of these restructures.
The Pharmacy Council will have substantial powers to request further information and investigate and review pharmacy licences once the Act commences which can result in a pharmacy licence being suspended or cancelled. Acting well in advance of this Act is crucial to ensure that your pharmacy business can continue to operate.
If you need advice on this issue, please contact Andrew Lambros or Chris Lillie at Bennett & Philp Lawyers.
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