The Start-Up Guide
So you’ve decided to start a new business. Some may call you brave, others crazy, but we should all agree on one thing – before you take the leap, take some advice.
The first piece of advice is this: don’t go it alone. Your lawyer and accountant should work together to structure the business appropriately and give you information about your obligations as a business owner.
Before you jump online to buy a shell company like thousands before you, ask yourself the following questions:
- Is a company the right kind of vehicle to run my business?Some of the things you will need to consider are: the tax and legal implications of each type of vehicle, the costs to set up the structure and annual compliance costs, whether asset protection is necessary, the purpose of the business, and the ability to add and remove owners.
- Should I set up a group structure?Instead of traditional single director/shareholder companies, increasingly businesses are a matrix of interconnected entities and trusts. There are a number of reasons that group structures are used, including asset protection and control, the sharing of resources and assets, and risk mitigation.Whether a group structure is appropriate will depend upon the type and purpose of the business and the needs and nature of its shareholders.
- Do I need to set up a trust?There are two main types of trust: a discretionary (or family) trust, and a unit trust.Whether you set up a trust, and if so which type of trust, will depend upon a number of factors including the identity of shareholders and their tax and asset protection needs.
- Who will act as director?And how many directors should you have? What does it mean to be a director?
- Who will own the shares?You may choose to own shares personally, through a company or a trust. The most appropriate vehicle for share ownership will vary from case to case.
- What kind of registrations does my entity need to comply with the law?You will require, at the very least, a tax file number and ABN. You may also be required to register for GST and PAYG, and ensure that you hold an appropriate WorkSafe insurance policy.
These are just a few of the matters you should consider before venturing into the unknown.
By getting the basics right from the beginning, you can focus on your business and leave the boring stuff to the experts.
If you would like further information about anything discussed in this article, please contact Alexandra Doig on (03) 8692 7520