There are a myriad of different types of business structures to choose from, each with their own benefits and disadvantages.
Choosing the wrong structure to operate your business through or even holding investments in can have a huge effect on your long term wealth and asset protection plans. Some of the critical questions you should consider when selecting the right business structure for you are:
- What will the income earning activity of the structure be (e.g. business or passive income)?
- Will the entity hold significant assets (e.g. real estate)?
- Will the entity offer asset protection?
- Can the entity gain access to various capital gains tax concessions?
- Will negatively gearing the entity isolate the tax loss from individuals?
- Does the entity provide ease for entry / exit of new owners or partners?
- Do the benefits of a complex structure outweigh the added costs?
- Do you understand the structure?
- How will any income or capital gains in the structure be taxed?
- Have you considered alienation of personal service rules?
- Will franking credits be available or do Family Trust Elections need to be made?
- If funds need to be injected into the structure have you considered other taxes (e.g. stamp duty)?
- How can profits be extracted from the entity and the associated tax consequences?
As you can see choosing the right business structure or investment vehicle is a very important decision which will have ongoing ramifications for you and your family well into the future. Parallax Accounting can help you go weigh up the pros and cons of each entity so you can be confident that business structure you chose offers flexibility and asset protection in a tax effective way.
Services we offer:
- Matching your goals and objectives against the business/investment entity that best suits your needs
- Set up all business structures to get you on your way faster
- Educate you on the advantages & disadvantages of your structures.
- Complete a structure review and provide suggestions to improve asset protection and minimize tax