How you structure your business is an important consideration. In choosing the structure of your business, you should consider the legal implications of each option. Our business lawyers can advise you of the benefits and disadvantages of adopting different business structures to your company.

Simple is often best

Many small business operators choose the sole trader structure as their preferred choice of business vehicle. Legal and taxation compliance issues are often simpler, annual compliance, accounting and audit fees are usually less and initial set-up is a breeze. It’s usually when the big tax bills start to hit that successful sole traders sometimes regret their initial choice. Or when the business is doing so well that you can’t cope alone and choose to call in a “partner”. Swapping-over to a new entity such as a partnership, company or trust may seem easy and harmless enough, but be wary of the Capital Gains Tax and stamp duty stings that might follow.

Partnerships

Many small businesses operate as partnerships. Some do and some don’t have formal partnership agreements in place. The common law and the Partnership Act offer a basic regime for partnerships, but with a formal Partnership Agreement you get the added advantages of being able to regulate termination issues, notice periods, sale of partnership shares, holidays and business succession. Prime Lawyers have had years of experience assisting clients with structuring the right Partnership Agreement for their businesses and we would be pleased to assist with yours too.

Family, discretionary and unit trusts

A trust structure is often a wise way of doing business. A trust can take an important place in the proper planning of a business structure and in protecting your valuable assets. There are different features of different types of trust each with different structures. You need the proper legal and financial advice to select the right trust vehicle for your purposes, and we can certainly help you with this.

Corporate Structures

A limited liability company is a common and sensible business structure for many types of business. A company is a separate “legal person”, it can sue and be sued in its own name and it can hold assets or borrow money in its name.

As with trusts, there are usually greater legal and taxation compliance issues to consider and therefore greater set-up costs and ongoing annual fees. However, those apparent disadvantages may often be offset by the tax and asset protection features that these structures offer. Trusts are typically headed up by a company known as a corporate trustee.

Prime Lawyers would be glad to assist in the detailed analysis of your business and legal affairs to help formulate and establish the correct business structure for your needs. We have done this for several years now, for many successful and satisfied clients.

Joint ventures

Joint ventures are sometimes a relatively simple way of combining various business parties in a common enterprise. Such a business enterprise may well be a “one-off” transaction such as a land redevelopment, but the rights and duties that flow-on from such ventures need to be carefully and expertly examined, and then documented.

Author Bio: Emmanuel Apokis has many years experience in Business Law working with the experienced Business Lawyers at Prime Lawyers in Sydney.

Category: Business
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