The Profit Pro’s
Having a hard time turning a profit? With our help, we can get you get your business on the road to profitability in 90 days.
Menu
Having a hard time turning a profit? With our help, we can get you get your business on the road to profitability in 90 days.
Want your tax minimized and your assets better protected? Getting your business structures right is an important step to take, especially for investors and early growth ventures.
The optimal structure could be made up of one or several entities including companies, trusts, sole trader (individual), partnerships and self managed super funds.
With the right structure, you can relax knowing that you’re set up perfectly for the future.
Clients served
since 2012
Refunds
Transferred
Businesses
Assisted
Clients served
since 2012
Refunds
Transferred
Businesses
Assisted
Get your structure right from the start and you’ll reap the rewards earlier and avoid risk. You can of course change your structure contingent on changes in the business (i.e. growth, strategy or if you look to sell)
An individual person is the owner of the business and operates on their own
Couples or groups running a business together as equals
A separate legal entity run by directors and owned by shareholders
People or companies running a business for the benefit of beneficiaries
Your business structure can have a significant impact on how much tax you pay. Growing sole traders should consider a change in structure earlier than later to lock in tax minimization. Here’s more on the primary business structures used by aussies.
Is the best place to start if you don’t plan on earning more than $100k in your first year (otherwise look at an alternative from the start) It’s simple and the least expensive option to set up. But if things go bad (i.e. divorce, lawsuits or even bankruptcy) your personal assets are likely to be more exposed than other options. You are responsible for the lot and you can’t share debts or losses with other parties.
Also a good place to start, easy to set up and relatively inexpensive (though you’ll usually have a lawyer draw up a personalised agreement). However, the partners have joint and several liabilities meaning that each partner is liable for all partners debt. You’d better know (and trust) your fellow partners well!
This very common legal entity is more expensive to set up and administer but most suitable for higher growth businesses due to the lower fixed tax rate. Also, shareholders (owners) can limit their personal liability and are usually not liable for any company debts. On the downside a company can’t access the general CGT (Capital Gains Tax) discount so it unsuitable for property investment for example.
A discretionary trust with trustee company is a structure we recommend often especially for families and related entities. It allows the 50% general capital gains discount and offers asset protection and income splitting. Beneficiaries (often family members) receive at the discretion of the trustees which could vary year on year.
A unit trust is similar to a discretionary trust but is more suited to unrelated parties’ or families that don’t get along ☺ . Beneficiaries have fixed entitlement (nondiscretionary) access to incomes year on year. It also allows the 50% general capital gains discount and offers asset protection and income splitting (but less flexibility compared to a discretionary trust ). Also stamp duty is payable on the sale/transfer of units (assets) in most aussie states though its generally easier to operate from a compliance perspective.
* There are potential legislative changes that may affect this structure in the near future
Its easy to find yourself in a structure with sub-optimal features.
Here’s some of the common mistakes we have encountered.
There’s many factors to consider when setting up the ideal structure, including your growth outlook, current wealth and income, the industry and regulatory environment and whether you are looking to sell anytime soon.
Each structure has its operational pros and cons. Set up and ongoing compliance costs vary greatly between options. It’s vital however that the optimal structure is set up as early as possible to avoid any unexpected fees such as capital gains or stamp duties.
Of course, we can assist and are happy to set up a free initial chat and longer structuring sessions online.
And being a registered ASIC agent, we can effect all necessary changes ourselves at low cost, quickly and effectively.
Just book in here and we will get things moving.
As Australia’s first specialist over-the-phone accountant, over time we’ve developed a unique system to allow the safe and convenient delivery of expert ‘live’ services to thousands of clients worldwide.
If you earn a high income in Australia, you’ll get taxed accordingly –between 30% to 38% is not uncommon for those on top salaries. It’s one of the highest rates in the world. Quite simply, choosing an optimal legal tax structure could save you a lot in tax – that is you’ll keep a lot of your own money.
There’s no one answer to this question. It very much depends on your current personal and financial situation, your future goals, your assets and if you own and operate a venture (or wish to). The optimal structure could be made up of several different structures and or entities. See above for further information or contact us today for a free initial chat.
Liability limited by a scheme approved under Professional Standards Legislation.
