I'm perhaps not your typical start-up in that we are reasonably well funded (self) before we get going, I've spent a bit of time talking with the accountants and looking at corporate structures.
We've ended up with 2 companies - BinaryPlex and BinaryPlex Holdings, shares in BinaryPlex are owned by a family trust and shares in BinaryPlex Holdings are owned by a unit trust. There are lots of very good reasons for doing this, many of which offer tax advantages, future sales / exit advantages, capital raising, offering equity, tax effectiveness, ability to offer shares only in the assets we want to share, ability to consult without risk to our asset etc. For my 2 cents worth, if you're serious, do it seriously. I'm not leaving my career and salary just for fun (ok partly for fun), we intend to build a successful and profitable business. Money spent now is a good investment for the future - yes it is a "waste" if you fail, but it will pay for itself many times over if your venture takes off. It's also worth noting that approaching 40, with 2 kids, a mortgage and other investments I have a lot more to lose and perhaps more options (if you have no family, a trust might not be helpful) - this is where an accountant can give you excellent advice - your advice should be for you and tailored by someone that understands your personal situation, your obligations and risks and can advise you accordingly. I strongly recommend you spend the $300 it will cost to get some excellent advice on a good structure and why you should do it, even if you do proceed to set it up yourself. Depending on the structure and if you choose to do it yourself or have them do it for you, you are then looking at probably something like between $1,200 - $6,000 depending on the complexity, number of entities etc. etc. Cheers, Tim On Nov 3, 11:23 am, Mike Nicholls <search4ge...@gmail.com> wrote: > Hi Guys > > My 2c worth. Go for Pty Ltd Company immediately, if you are not planning to > raise capital consider using family discretionary trust as well. Talk to > adviser. Get it right now. They will probably talk about Woman of Substance, > Man of Straw (ie hold the family home in your wifes name) > > Sole Traders suck for a whole bunch of reasons aside from the cost (Geoff > already mentioned liabilities). > > - Liability > - No separate legal entity means business succession is hard to achieve > - No ability to hive off into separate business that can be managed by > someone else > > Case in point. My brother in law recently passed away and he was a sole > trader. > > This is an absolute nightmare scenario, business technically can't trade > anymore until estate is sorted through, may never trade again. Wife with > three small children now has no income and we are trying to restructure so > it can continue but very difficult to do. > > All assets are now locked up with the administrator of his estate. There is > no ability for this business as it is to move forward as it technically died > with him (and business was booming for him) > > If you are not planning to raise capital consider setting up Company owned > by Discretionary trust (discretionary trust can be managed by another > company or you or wife) > > As life changes (and it does) income can be streamed to other members of the > family, wife stops working, no problems, discretionary trust can direct > income to her, other family members need assistance discretionary trust can > legally stream income to the parents. Son/Daughter is now of age and going > to uni, again trust can stream income legally. > > Once your business is successful its too late to change to a trust, capital > gains will kill you (and Geoffs good example of a rollover/relief probably > wont apply because the beneficiaries of the discretionary trust will be > different to the sole trader/partnership) > > Also if you kick the bucket, life goes on, you can set up a bunch of people > to manage the trust and keep the business running for your family. > > Regards > > Mike > > On Tue, Nov 3, 2009 at 10:50 AM, Geoff McQueen - Hiive Systems < > > > > geoff.mcqu...@hiivesystems.com> wrote: > > Do you have any assets in your own name that you want to protect in case > > something should go really really wrong? If so, think about incorporating. > > > If not, then: > > > 1. Register for a business name in your home state as a sole trader; > > in NSW you can do it online athttp://blis.fairtrading.nsw.gov.au/ > > > 2. Register for an ABN in this “trading as” business name; you can > > register online athttp://www.abr.gov.au/ABR_BC/ > > > 3. Register your .com.au based on the ABN (if you want one) – there > > are many registrars listed athttp://www.ausregistry.com.au/(we use > > Enetica) > > > 4. Open a bank account, and then register for a merchant facility to > > use off it (probably chose your bank based on the price of their merchant > > facility); ANZ screwed me recently (they added an account termination cost > > after signing up, won’t return calls even though I’ve lodged a complaint), > > and I’ve found Bankwest to be very good and professional. > > > 5. Use someone like eWay or SecurePay to give you the ability to > > take credit card details in your own shopping cart; they provide a virtual > > EFTPOS machine effectively, and have plugins for many common shopping carts. > > > 6. Develop website/cart, and make sure you install Google Analytics > > and enable the Ecommerce Tracking option > > > 7. Start trading > > > If you earn towards $100K in profit, then you should think about > > incorporating (registering a company). This is also good if you want to > > protect your personal assets (ie, house) in case someone sues the company > > (because the product you retailed made them unhappy, etc). The ATO gives > > ‘rollover’ relief so you can change from a sole trader to a company – a > > completely different legal entity owning/running the business – without > > incurring CGT as long as the process is going from an unincorporated entity > > with a certain ownership structure (sole trader, partnership) across to a > > company with the identical ownership structure (you own all shares, or the > > shares are split between partners in the same ratio as the partnership) > > > There’s a lot more to consider, such as inventory, shipping prices, > > refund/return policies and so forth. I’m not as experienced in this side of > > things: perhaps another beacher could contribute? > > > *From:* silicon-beach-australia@googlegroups.com [mailto: > > silicon-beach-austra...@googlegroups.com] *On Behalf Of *Michael Harries > > *Sent:* Tuesday, 3 November 2009 10:37 AM > > *To:* silicon-beach-australia > > *Subject:* [SiliconBeach] Web retail in a box? > > > Hi Silicon Beachers, > > > Can anyone recommend a 'out of the box' system/methodology/accountant for > > the accounting side of setting up a simple web retail business (sole trader, > > etc)? Low cost/low admin start, etc. > > > Thanks, > > Michael > > > -- > > __ > > Michael Harries > > -- > MortgageCorp Australia Pty Ltd > FBAA Accredited Finance Brokers > (02) 8006 8002 lo...@mortgagecorp.com.au --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Silicon Beach Australia mailing list. Guidelines on discussion: http://tr.im/ujKF No lurkers! It is expected that you introduce yourself: http://tr.im/ujMm To post to this group, send email to silicon-beach-australia@googlegroups.com To unsubscribe from this group, send email to silicon-beach-australia+unsubscr...@googlegroups.com For more options, visit this group at http://groups.google.com/group/silicon-beach-australia?hl=en?hl=en -~----------~----~----~----~------~----~------~--~---
