Hi There,
One of my friend propose with me seting a Pty Ltd. for long term small development projects, @50% share. Do you think it is good structing? although the tax rate is 30% flat .
Do you think there are any better structing for us? All inputs welcome. [:o)]Regards
Julian [
]THERE IS ALWAYS A BETTER WAY!
Julian,
Instead of using company for 50/50 you can also use trust to do that ie. unit trust.
Warm Regards
Chan Dollars
[The bridge between where you are right now & where you want to be tomorrow is knowledge]The 30% tax rate doesn’t come into the equation Julian as presumably the profits will immediately be taken out ?
If you have so much income that any profits would attract a higher rate than 30% if taxed in your hands [:o)] , then it would be better for you to have a another company holding your share in the company which is carrying on the development.
The tax rate would still be 30% but …………… you aren’t locked in with a partner, you are free to dispose of your profits any way you like and whenever you like.
Generally speaking, partners are no good as at some stage or other things may go wrong and you may get a disagreement because one blames the other for having made a particular decision.
Sometimes a partnership is very necessary as each of the partners may have special skills which the other one does not.
You mentioned in your post that the projects are
small development projects which raises the question in my mind “Why not go it alone ?”Pisces
As a first project, keep it simple I say.
Use a company, and sign a shareholders’ agreement setting out how things need to be run, how to exit your investment, and what happens if there’s a deadlock or a default.
But none of us on the forum are qualified financial advisers (otherwise there would have been a disclosure/disclaimer blurb after the post to satisfy the regulatory hoopla). Once everyone’s chucked in their 2 cents’ worth, go talk to an accountant to work out the best way forward. Sure, it may cost a bit of money up front, but if, as you say, it’s going to be a long term project which will make a lot of money, better some pain up front, than watching it all flushing down the toilet bowl in a messy way later.
Cheers
EDIY Residential Property Settlements in WA – the book coming soon! When I can get my act together…
Thanks Pisces,[:o)]
Thank your for your advice, Since this is my fisrt project, i don’t have any experience, and he need my buisness experience, that is the reason why we come together.Thanks Elysium-M,[:o)]
Most ot the accountant is the bad guy who just give you some general advice, and he is not busienss man or Professional investor, so he can’t tell us more than he knows!As we are the Practical Investor here, we may know the other’s needs.[:p]
i hope more big brother/ sister give me some insight !
Cheers
Julian []THERE IS ALWAYS A BETTER WAY!
]
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