Business Structures
The needs and requirements of which structure to choose may depend on various factors, including:
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the type of business being conducted or acquired
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your objectives in acquiring or expanding the business
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stamp duty, capital gains tax, income tax position (see also Taxation)
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costs of registration or incorporation and annual administrative costs
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whether the business is or will be conducted in one State or more than one State
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asset holdings, whether in personal names or held by another entity (see also Asset Protection)
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whether you are acquiring appreciating assets
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who and how many people are involved in the business as owners and employees
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financing requirements of the business and any securities to be provided (see also Banking and Finance)
Each structure has its own advantage and disadvantage taking into consideration the above factors. Some forms of business structures are:
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Sole proprietorship - where a person operates a business in his/her own name with a business name registered in the relevant State where the business is operating
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Partnership (see also Partnerships) - where two or more individuals (or trusts) set up a business and share the profits (losses) of the business in accordance with the partnership agreement
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Joint Venture (see also Joint Venture Agreements) - where two or more individuals (or trusts/companies) wish to operate a business without necessarily forming a company and certainly do not wish to form a partnership.
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A Proprietary Company (see also Corporations/Companies and ASX Listing and Compliance) - where up to 50 shareholders (or individuals/companies/trusts) can set up a business with the protection of limited liability
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Trusts (see also Trusts) - where individuals do not wish to own the business in their own names for asset protection and also have the option to split the income with other family members
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Superannuation Funds - where individuals who have their own superannuation fund with money to invest or they do not wish to own the business in their own names
It is important to choose a structure carefully at the outset since where you have already started the business using one of the structures and later on wish to change the structure, you will have to consider stamp duty implications, impact of capital gains tax and possible loss of income tax benefits (such as tax losses).
You should consult your solicitor and tax advisor before setting up an entity to operate a business or restructuring an existing business or holding.
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Business Structures Articles
Business & Commercial Law - Franchising Law - Franchising Code of Conduct
Date: May 29, 2009
Author(s): LAC Lawyers
Franchising in Australia is governed by the Franchising Code of Conduct (“FCC”). This piece of legislation was design to protect potential franchisees from unscrupulous franchisors and requires the franchisor to disclose certain information to the franchisee so as to...
Business and Commercial Law - Do’s and Don’ts for Small Businesses
Date: September 24, 2005
Author(s): LAC Lawyers
Starting a new business can be a daunting operation. A remarkably high percentage of small businesses fail within the first five years of operation. Sometimes that is because the business itself is not sound. However, on other occasions the problem lies in a lack of planning or an ignorance of the many legal requirements that must be met by the small business operator.
Business Law - Business Structures - Companies
Date: April 22, 2009
Author(s): LAC Lawyers
A company is a form of business organisation made up of members or shareholders and managed by directors.
Business Law - Business Structures - Partnerships
Date: April 02, 2009
Author(s): LAC Lawyers
The term “Partnership” is defined in the Partnership Act 1892 (the “Act”) as the relationship that exists between persons carrying on business in common with a view of profit. From this...
Choosing a business structure - Which one is right for you?
Date: September 25, 2005
Author(s): LAC Lawyers
When starting out in business or changing the nature of your business you need to consider which method of operating the business is best for you.
Is it the beginning of the end for discretionary trusts and one-man companies - A change of view point
Date: September 01, 2010
Author(s): Michael Pickering B.A., LL.B. (Hons.), LL.M., M. A.
There are suggestions that Australian courts are now changing their approach to the interpretation of statutes with the effect that discretionary trusts are not as useful in avoiding statutory obligations. In other words, in the words of the Bob Dillon song “… the times, they are a-changin”!
Is it the beginning of the end for discretionary trusts and one-man companies - Centrelink, Bankruptcy and Taxation
Date: September 01, 2010
Author(s): Michael Pickering B.A., LL.B. (Hons.), LL.M., M. A.
Another example is Elliott v. The Secretary of the Department of Education, Employment and Workplace Relations decided in 2008 immediately before the High Court of Australia’s decision in Spry and was concerned with the means test for Centrelink pensions.
Is it the beginning of the end for discretionary trusts and one-man companies?
Date: September 01, 2010
Author(s): Michael Pickering B.A., LL.B. (Hons.), LL.M., M. A.
The traditional usefulness of discretionary trusts arises from the puzzling position they hold in the law. Property transferred to these entities is effectively ownerless until discretionary trustees determine to appoint the property to discretionary beneficiaries.
What to expect when you call LAC Lawyers
Date: December 13, 2006
Author(s): LAC Lawyers
LAC Lawyers is a full service firm dedicated to the provision of superior legal services in Australia. Our aim is to provide unrivalled client satisfaction coupled with high quality service and advice. When you call LAC Lawyers our friendly reception staff will spend time with you to identify the area of law your enquiry relates to then pass you on to one of our qualified solicitor's who can help you.