Question 1

What is the best business structure in Australia?

Accepted Answer

There is no single answer - it depends on your goals. A sole trader is simple but offers no asset protection. A company provides limited liability and a 25% tax rate. A discretionary trust offers flexible distributions and asset protection but higher compliance costs. Our Richmond lawyers recommend the optimal structure for your specific circumstances.

Question 2

What is the difference between a company and a trust?

Accepted Answer

A company is a separate legal entity that pays tax at the corporate rate and provides limited liability. A trust is a legal arrangement where a trustee manages assets for beneficiaries - offering flexible income distribution and strong asset protection but no fixed tax rate. Many business owners use both structures together.

Question 3

When should I restructure my business?

Accepted Answer

Common triggers include business growth, new investors or partners, separating assets, succession planning, or improving tax efficiency and asset protection. Early restructuring is almost always more cost-effective than restructuring under pressure - we advise on timing and approach.

Question 4

How much does it cost to set up a company in Australia?

Accepted Answer

ASIC registration fees are currently $576. Legal fees for a company setup including a constitution and shareholder agreement typically range from $1,500 to $4,000 depending on complexity. We offer fixed-fee options for standard structures.

Question 5

What is a discretionary trust and how does it work?

Accepted Answer

A discretionary trust gives the trustee flexibility to distribute income and capital to beneficiaries each year - directing income to those in lower tax brackets to reduce overall tax. A corporate trustee is commonly used for additional asset protection and simpler administration.

Business Structuring

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