New Release: A Builder’s Guide to Resolving Disputes in NCAT, read here.
Having the right business structure will facilitate business growth and effective tax planning, and maximise protection of your business and personal assets in the event of insolvency.
Our experienced Business & Company Lawyers assist clients understand and manage the fine balance between asset protection, tax minimisation and commercial considerations to achieve the best structure for their business and commercial objectives initially and when circumstances change.
Advice in relation to business structuring options, considerations and best business structures
Incorporation of Companies and preparation of Shareholders Agreements
Establishing Partnerships and preparation of Partnership Agreements
Establishing Family Discretionary Trust and Unit Trusts
Advice in relation to restructuring of businesses and preparation of Restructuring Deeds, Asset Sale Deeds, Asset Licence Deeds and Intellectual Property Licence Deeds
Tax advice, including Small Business Rollover Relief, Capital Gains Tax, GST and Transfer Duty
Crowd-sourced Funding (crowdfunding) advice and related Agreements
Business structuring, at the highest level, relates to legal ownership of a business. Businesses can be carried on by:
When structures involve a Company or Unit Trust, further structuring considerations arise in relation to how the Shares or Units should be owned.
Structuring and restructuring considerations and asset protection strategies are also relevant for isolating assets from commercial risks when a business:
There is no standard structure correct for every business.
Asset protection and tax planning are typically the primary concerns when considering the best business structure for a business.
When establishing a business, the best structure will depend upon several factors, including:
Getting your structuring right (including associated structuring agreements) at the earliest possible stage can have major benefits especially if the business fails and becomes insolvent.
Business restructuring relates to the transition from one structure to one or more other structures.
While ideally a good business structure will be set up from the start, this does not always occur and, even when best structures are initially established, businesses’ circumstances can change such that the initial business structure is no longer suitable.
The primary considerations for business restructuring are again asset protection and tax planning; however, the restructure may also be prompted by a change of circumstances such as insolvency, a proposed transaction or merger, succession plan or other opportunity.
Legal and tax advice should always be obtained before effecting any restructure to ensure that transactions or agreements relating to the restructure:
If you suspect that your business is or may become insolvent, download our Safe Harbour Guide and contact us today to consider your options and to begin formulating a restricting plan.
The small business restructure rollover (SBRR) allows small businesses to transfer active assets to a new entity structure without incurring an income tax liability.
Both Public and Private Companies seeking to raise money from investors need to comply strictly with the capital raising rules set out in the Corporations Act 2001. Failure to comply can result in fines or even imprisonment in severe cases.
Why would you buy a company, and in particular an SME (small to medium enterprise) proprietary company?
Mergers and acquisitions are often done by way of joint venture.
In Australia you will see companies referenced by the letters ACN and businesses by the letters ABN. In this article we look at what they stand for and what they mean.
Follow our easy steps to ensure your business name does not infringe or potentially infringe on an existing business.
Revenue New South Wales is turning up the heat in the medical profession. This article offers practical advice on what Medical Practices should and shouldn’t include in their Service Agreements.
In this article we look at the two most common ways in which foreign companies establish and carry on business in Australia.
If you are a SME company owner and are considering the possibility of bringing on one or more employees as shareholders/owners, then this article is for you as we discuss the steps and planning that goes into this process.
To avoid having to pay GST on the purchase price in a sale of business, the sale must satisfy the ‘going concern’ exemption.
Prior to execution of a sale of business contract, and whether you are a vendor or a purchaser, your solicitor should undertake a search on the Personal Property Security Register (“PPSR”) for the vendor, as the normal agreement in a sale of business is that all assets of the business are to be sold free…
There are certain legislative requirements that need to be consider when deciding on whether to purchase, and what structure to use for the purchase of, a pharmacy business.
It is critical for all parties to a sale of business transaction to understand their legal rights and obligations in relation to existing employees of the business and the financial cost of termination and/or transferring of employment.
Most companies will adopt a document called a ‘Constitution’ upon registration. A Constitution is a contract between the company, its Directors and its shareholders that prescribes the governing rules and overall management of the company.
Do you own a private company? Have you received payments not accounted for as wages or salaries this financial year?
A Trust is an agreement where a person or entity holds property or assets for the benefit of beneficiaries.
Benefits of utilising a Trust in your business structure include:
Once you decide to set up a Company structure, you will first need to consider how to structure your shareholding in the Company. The shareholder(s) can be an individual, another company or a trust structure. Which structure you decide will depend upon your particular circumstances, having regard to the availability of asset protection and tax minimisation strategies.
Secondly, you will need to consider who will be the Director(s), and ultimately have the day-to-day management and control of the Company. Each Director will need to sign a consent to act as Director of the Company.
Your Solicitor can then register the Company with ASIC with your chosen shareholder(s) and Director(s). Upon registration of the Company, you will be provided with an Australian Company Number (ACN) and will need to register for a new ABN and for GST if applicable
After you incorporate a Company (see above), your business, including all licenses, assets and other agreements, including any lease, will need to be transferred to that Company. This should be documented by an Asset Sale Deed, or similar agreement.
You should then cancel your old ABN.
You should always seek advice from your Accountant and your Solicitor before proceeding with the incorporation of your small business to make sure the transaction will not be challenged in the future and that you will be entitled to the specific CGT concessions and relief available for this type of restructure.
The establishment of a Family Discretionary Trust (FDT) is done by way of Deed. Prior to the Deed being prepared, you will need to decide who will be the Trustee of the FDT (typically an individual or company), the named beneficiaries, the Appointor (the individual(s) who has the power to appoint and remove the Trustee) and the Settlor (typically your Solicitor, being the person responsible for setting up the trust).
Your Solicitor can then prepare the Deed establishing your FDT, and if acting as Settlor, establish the trust. The Deed will need to be executed by the Trustee and Settlor and nominal Duty of $500.00 paid to Revenue New South Wales.
If utilising the FDT to carry on a business, you will then need to register for an ABN and GST if applicable.
While you are not legally required to have a Shareholders Agreement, without this comprehensive document the Company (and its Shareholders and Directors) would be controlled by laws which are insufficient to assist with the operation and management of the Company, the protection of Shareholders and resolution of disputes.
We recommend all Companies with two (2) or more Shareholders have a Shareholders Agreement in place. See our article which provides a comprehensive summary of the benefits of having a Shareholders Agreement in place.
Crowd-sourced Funding (crowdfunding) enables eligible companies to raise capital from the general public by collecting a large number of small contributions, typically in exchange for shares in the company.
To be eligible for a crowdfunding campaign, a company must:
An offer to the public in a crowdfunding campaign must:
