The right structure, before it costs you
Most businesses outgrow the structure they started with. We look at your business, family and plans, show you two or three options with the costs, and do the work.
✓ Partner-led✓ Tax costs worked out before you decide✓ Documents signed online
When to look at it
Six signs it is time to look at your structure
Any one of these is a good reason for a strategy call.
✓ Profit is growing fast
You are paying tax at the top personal rate on profit you leave in the business.
✓ Property and business in one name
A claim against the business could reach the building, the equipment or the family home.
✓ A partner or investor is joining
You need a clean way to bring someone in, and a way for them to leave later.
✓ You're opening a second site or business
Each new venture needs its own risk walls.
✓ You plan to sell in the next few years
The right structure now can decide how much of the sale price you keep.
✓ Loans from the company keep building up
Drawings from a company can be taxed as dividends (Division 7A) if not handled right.
What we set up
The building blocks
Company
Run the trading business with limited liability.
Why owners use it
- ✓ Profit kept in the company taxed at 25% (base rate entity) or 30%; more tax when it is paid out to you as dividends
- ✓ Easy to bring in shareholders and sell shares
- ✓ Limited liability for the owners, subject to personal guarantees and director penalties
Watch out for
- ⚠ Money taken out must be salary, dividends or a proper Division 7A loan
- ⚠ No 50% CGT discount when the company sells assets
Side by side
Sole trader, company or trust?
| Feature | Sole trader | Company | Family trust | Company + family trust |
|---|---|---|---|---|
| Protection from business debts | ✗ None | ✓ Limited liability* | ◐ Through a corporate trustee | ✓ Strong* |
| Tax on profit kept in the business | Your personal rate, up to 47% | 25% or 30%, more when paid out as dividends | Taxed to whoever receives it | Flexible; retained profit at the company rate |
| Share profit with family | ✗ | ◐ Through dividends | ✓ Each year | ✓ Each year |
| 50% CGT discount on sale (assets held 12+ months) | ✓ | ✗ | ✓ | ✓ On a share sale by the trust; ✗ on assets the company sells |
| Set-up and running cost | Lowest | Medium | Medium | Higher |
| Usually suits | Starting out, low risk | Growing, one owner group | Family business, investments | $1M+ businesses wanting growth and protection |
* Subject to personal guarantees, director penalties and family law. General information only. The right answer depends on your numbers, family and plans, which is what the strategy call is for.
How it works
From first call to fully set up
1
Strategy call
Your business, family, assets and plans for the next five years.
2
Review what you have
Entities, deeds, loans between them, who owns what.
3
Options with the costs
Two or three options, each with CGT, stamp duty and roll-over relief worked out.
4
We set it up
ASIC, deeds, ABN, TFN, GST, bank and transfers. You sign online.
5
Yearly check
Distributions, Division 7A and whether it still fits.
Example, not a real client
A $6M transport business run as one company, with the trucks and the depot in the owner's name
Before
One accident claim could reach the depot and the family home. Profit taxed with no flexibility. No clean way to sell.
After
Trading company owned by a family trust; depot and trucks held in a separate entity and leased in, with the CGT and stamp duty on the move worked out first. Risk walled off, profit shared tax-effectively, ready to sell.
One business, two very different outcomes
Every business is different, but the aim is the same: wall off the risk, share profit sensibly and be ready for whatever comes next.
Package
Know your options before you spend
A fixed fee for the review and plan. If you go ahead, the set-up is quoted in writing before we start.
Structure and protection review
One-off project, then a clear plan
Fixed feequoted in writing after your free call
- ✓ Review of your group and family structures
- ✓ Asset protection gaps and risks
- ✓ Tax-effective restructure options
- ✓ Succession and exit readiness
- ✓ Written report and partner meeting
Questions
Common questions
How much does a restructure cost?›
It depends on how many entities move and what they hold. The structure review is a fixed fee, and every option in our report shows the set-up cost and the tax cost before you decide.
Will restructuring trigger capital gains tax or stamp duty?›
It can. Roll-over relief can often defer the income tax, including the small business restructure roll-over (aggregated turnover under $10M, a genuine restructure, and no change in who ultimately owns the business). Stamp duty is a state tax and is not covered by that roll-over. We work out both before anything moves.
Company or trust: which is better?›
Neither on its own. Many $1M+ businesses use both: a company to trade and a family trust to own it. It depends on your profit, family and plans.
Can you restructure a business that is already running?›
Yes. Most of our structuring work is for established businesses. Contracts, staff, bank accounts and registrations are moved in a planned order.
Do I have to come into the office?›
No. We work with businesses across Australia by video and phone, and every document is signed online.
How long does it take?›
The review and options usually take two to three weeks. Setting up new entities takes a few days; moving a running business usually takes four to eight weeks.
A 30-minute call to find out where you stand
Confidential · No obligation · Registered tax agent 26173619