Business Structuring
Most businesses are great at delivering a product or service, but have no idea what to do when it comes to tax. (especially new or small businesses)
Minimising tax while protecting business assets can be downright complex, and most business owners end up years down the line with a whole lot of money left on the table. Don't be that person. Read below to find out how we can make your life much easier through an efficient business structure.
Business
Structuring.
Safeguarding Assets
Minimising Tax Liabilities
Facilitating Future Estate and Succession Plans
Whether you're embarking on a new business venture or already established, we evaluate the optimal business structure to ensure it aligns with your specific needs and objectives across various domains.
Restructuring typically entails tax and duty considerations. At Wryde, our specialised expertise enables us to assess all potential avenues and mitigate associated impacts during restructuring whenever feasible. Furthermore, we prioritise selecting the most suitable type and method of restructuring to diminish or eliminate initial tax obligations while maximising long-term tax and asset protection strategies.
Frequently Asked Questions.
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A private company in most cases is a business entity that offers personal liability protection to its owners, meaning their personal assets are protected in case of business debts or lawsuits. A sole trader, on the other hand, does not offer this separation; the owner's personal and business assets are considered the same, leading to unlimited liability. Choosing the right structure is crucial for tax implications and personal asset protection. Small business owners have the opportunity to go with either, although this decision should depend on their goals and vision for the future.
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Unlimited liability refers to the legal obligations of business owners to pay off all debts and claims against their business using personal assets if necessary. This is typically a concern for sole traders and partnerships. To protect against this, consider incorporating a company to limit your personal liability.
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For family investments, a trust structure is often recommended by our firm due to its flexibility in distributing income to family members. Trusts offer tax advantages via allowing discretionary distribution strategies to meet your family's financial goals and needs. Trusts provide a versatile framework for managing assets and ensuring wealth preservation for future generations.
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Australians owning a company may be concerned about double taxation, which refers to paying taxes at both the corporate and personal levels on the same income. In Australia, companies are subject to corporate tax rates on their profits. When these profits are distributed to shareholders as dividends, shareholders then pay income tax (only the difference) on these distributions, as Australia's tax system incorporates a 'franking credits' mechanism, at most times preventing double taxation. Simply put, business owners should almost never need to pay tax twice, although there are situations in which it is possible.
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Absolutely. The structure of your business (e.g. sole trader, partnership, trust and company) directly impacts your personal liability, how and how much you pay taxes. For instance, owners of company enjoy limited liability, meaning their personal assets are generally protected from business debts. This structure also affects tax and commercial implications, with different entities subject to varying tax rates and obligations.
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The frequency of paying income tax on business earnings varies depending on your business structure and preference. Typically, businesses pay estimated taxes in four quarters on a quarterly basis and the final payable or refundable amount when they lodge their income tax return.
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Changing your business entity can significantly alter your tax obligations. For example, transitioning from a sole trader to a company could have major effects - changing how you're taxed via business transfer and improving personal liability protection. It's important to consider these implications and consult with us before making changes.
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Protecting your personal assets starts with choosing the right business structure, like an company, which offers limited liability protection. This means your personal assets are generally not at risk if your business incurs debts or is sued. Additionally, ensure you keep personal and business finances separate and maintain proper insurance to further safeguard your personal assets.
Disclaimer: The information contained in this website is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs and where appropriate seek professional advice. Taxation, legal and other matters referred on this website are of general nature only, and are based on interpretation of laws existing at the time and should be not relied upon in place of appropriate professional advice. Those laws may change from time to time.