Ok we run our own family business as a partnership – Husband and wife , been established for years and all assets in our personal names .Fortunately we have little debt to service but want to secure our family home – private assets for the future in case anything goes wrong . Where do we go from here ie establish a company in one name – assets in the others and have to pay all the stamp dutys (thousands of dollars ) in order to get the right pieces of paper or are their less painfull ways of doing this ..Appreciate any help
You are crazy running a partnership. Best to run your business through a company so that if something goes wrong it is the company that is sued. Shareholders of a company have no liability. Directors can sometimes go down with a company if they have done something illegal, but even they are usually safe if the company is sued. it is best to have one director though as some times personal guarantees are requested in business (as they know suing a company may not be worth anything).
So run your business through a company for starters. But get some advice as, depending on your business, there may be CGT and stamp duty issues to transfer over. There may be also opportunities to save tax too.
Then look at protecting your assets from non-business litigation or other potential problems. you can do this by using discretionary trusts to hold future assets.
For existing assets it may cost too much to transfer, such as stamp duty and CGT, and there are other ways to protect them, so best to get some advice there too.Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Guts feeling based on your post is, you'd better see a suitable accountant for this.
But in the absence of further information, I hazard a guess that these would roughly be what you need to do:
1. Get yourself a pty ltd and start running your business thru it. Doesn't matter if it's in both your names or just one of you. Pty Ltd also separates your business affairs from your personal life – it feels great to have one! (I know from experience)
2. For future purchases, either buy it personally or use a trust. (your accountant can advise you)
3. If you only have one or two existing properties, and your business seems low risk (if you've been partnershipping, I guess it would be?), I won't bother transferring them into the new trust (if you going to set up one).
But as I say, definitely see an accountant.
Yes you need to see an accountant or lawyer.
I can see no point in having 2 directors though – it just doubles the risk without any benefit.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Terry is right there is no need to have two directors if you plan on holding the shares in both your names (ie 50 for me and fifty for you)
Whoever if (and think about this) you have your family trust own the shares to the company you should have both of your names as directors.
You have to speaking to an accountant or financial planner about setting this up for your situation but if you have a family trust set up you can us this for everything and pay less tax
Talk to your accountant or one in the area.
Harlee,
Have to agree with everyone here – some good advice will go a long way with you. There are multiple ideas that you can use to protect your assets, and not the just things like property, even the business can be better protected than how you have it at the moment. There are also other advantages with regards to tax, banking and lending – the list goes on.
I see many clients that come through that are in similar positions – husband and wife who run a good business, but it's all on the line. You do all the work, you take all the risk, and if something were to go wrong, you get the blunt end of the deal – and those that haven't put in the years of hard work walk away with your assets.
It's not a nice feeling, and some solid advice will ensure that it doesn't happen.FS
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