Running a business should not mean that all your hard-earned personal assets are available to the business creditors. But asset protection strategies must be put in place early to avoid the taxes and duties that could apply if assets are moved into protective structures after they’ve become truly valuable. Act early to safeguard your family’s financial security.
An important part of the co-ownership agreements are the buy/sell arrangements that provide what is to happen if a co-owner dies or becomes disabled. Buy/sell arrangements come in many different colours and sizes and our Buy/Sell Advice Guide outlines the important issues, summarises the alternatives and considers their pros and cons.
Choice of Structures
When you own and run a business with others it is vital to have a rule book that all owners understand and agree to. The rules are particularly important if the co-owners disagree on some issue relating to the operation of the business or if someone wants to leave the business. Much better to have a good rule book in the form of a shareholders agreement or unitholders agreement than to be heading for the courts.
There is a fundamental difference between a partnership and a joint venture, and if you get it wrong in the documents the tax and liability consequences could be massive. Talk to us to see if you qualify for a joint venture agreement and, if so, to have it prepared.
Although partnerships are not as popular a structure as they once were, some professions still require them. There is nowhere near the same legislative prescription and support for partnerships as for companies so it will all boil down to the partnership agreement. Would you put your future financial and professional trust in a second-rate agreement just because it was cheap?
Discretionary trusts are still one of the most popular structures for asset protection, tax planning, income smoothing and wealth transfer. If you choose to operate the business through a discretionary or family trust, we can set up the trust for you.
Where more than one family is involved in the business a preferred structure may be a unit trust with the units held by the co-owners’ discretionary trusts. If you choose to operate the business through a unit trust we can set up the trust for you. If you need a company to act as trustee, we can set up that company.
When setting up a new business there is much to consider. Who should be the owner? What structure should be used? What legislative and regulatory rules need to be followed? What documents will be necessary initially? and so on. Problem is, if you don’t get the settings right at the start, it can cause much heartache later.
If you choose to operate the business through a company, we can set up the company for you. If the company has more than one owner then a shareholders agreement may be necessary to ensure all co-owners understand the ‘rules of the game'.