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top 10 tips for business structuring

10 key tips for business structuring

Many professionals and businesses look to save tax and minimise risk by setting up companies and family trusts.

Generally, the more complex your structure, the more tax you may save but there are pitfalls in creating overly complex structures.

Here are our top 10 tips you should consider before progressing with any business structuring decisions:

  1. Start simple, focus on building your business in the first few years.

  2. Review business structure with your accountant towards the end of each financial year – in the early years it is generally easy to restructure for growth, risk, and tax effectiveness.

  3. For established businesses where goodwill has been built up - care needs to be taken when restructuring to ensure capital gains tax is not triggered when changing ownership.

  4. Good accounting and financial advice in the early days will guide you to appropriate grants, will consider your personal situation as much as your business situation and consider the start-up strategy, the growth strategy, and the exit strategy.

  5. Set down in writing agreed financial arrangements with business partners, your accountant will guide you around practical terms which can form the basis of legal documentation. 

  6. Make sure you understand the structure, the “why” and the costs versus benefits.  A session with a whiteboard and the accountant is a must before setting up complex structures.

  7. Meet with your accountant for tax planning before the end of each financial year, at a bare minimum a regular quarterly catch up phone call.  

  8. If you have a trust, ensure you have a bank account for the trust and sign a trust distribution minute before 30 June each year.

  9. Once there are a few investments and a flow of transactions in the trust ensure you are receiving prepared financial statements from your accountant that clearly show the assets, liabilities, and the net position for each beneficiary.

  10. If you have a company and you lend the company money, consider repaying the loan before paying wages to yourself so as not to pay tax unnecessarily.   


WLM can help

For assistance with growing your business, for restructure or even just starting out, please contact us today.

Download our free whitepaper to find out more on how you can minimise tax and risk with business structure.

The material and contents provided in this publication are informative in nature only.  It is not intended to be advice and you should not act specifically on the basis of this information alone.  If expert assistance is required, professional advice should be obtained.

Find out more about our financial planning and business accounting services.

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