[EP 053] Talking Tax and Business Structures – Top tips on where you might be going wrong (Part 2)

Today we pick up on our conversation last week with Ben Walker, the founder and CEO of the accounting firm Inspire. In this episode, we drill into the practical reality of choosing between tax structures and the impact this may have if you’re planning on selling the business in the future. Then we’ll close out with a discussion on the concept of superannuation and multi-layer structuring – why and when business owners ought to consider these approaches.

Links

Episode Highlights:

• Importance of being future-minded when deciding on your business structure
• Complex business structures cause deals to fall over completely
• Superannuation: a protected space for diversified investment
• Multi-layer structuring: different layering within organisations

Importance of being future-minded when deciding on your business structure

One of the things that strike me from a practical perspective is if you’re starting a business and you’re thinking about a company versus trust structure, you need to perhaps have some mind to what you might want to do in the future as to whether or not you might want to bring partners on board. – Joanna Oakey

Complex business structures cause deals to fall over completely

Sometimes businesses end up in these highly complex structures that they don’t understand, let alone people coming in as potential buyers.

Remember the KISS principle – Keep It Simple Stupid. I love that principle. I really operate by that.

– Joanna Oakey

Superannuation: a protected space for diversified investment

It scares me when business owners make a choice not to contribute at all to super because they see their business as their sole superannuation. – Joanna Oakey

The Deal Room Podcast – a sister podcast!

If you’re a professional involved in business sales and acquisitions activity (i.e. a broker or accountant), or if you are a business owner looking to expand by acquisition or if you are building to sell your business in the future, check out Talking Law’s sister podcast – The Deal Room! Together with Talking Law, these are now two of the top legal podcasts in Australia!

The Deal Room Podcast contains information, interviews and tips & tricks relating to the world of business sales and acquisitions. We love this area of law, and thought it was high time we took some of our specialist knowledge and shared it in commercial context, rather than just talking about legal stuff!

We release new episodes every tuesday. You can listen to our episodes on www.thedealroompodcast.com or subscribe to The Deal Room Podcast on iTunes to be the first to know when a new episode is out.

Multi-layer structuring: different layering within organisations

One of the things we recommend is that when a client has a different business division or a business unit, then they set up a different structure to run that side of the business.

Everyone must have the education and advice beforehand. So we go through a structure and strategy session with them. Make sure they understand how they take their money out and how the tax works with both the company or trust and then we make sure they understand why we’ve recommended one or the other.

– Ben Walker

There’s no one appropriate absolute answer for every business from both an accounting and legal perspective. Sometimes it requires a joint approach in relation to a client’s particular circumstances to work out what is the best approach all round. – Joanna Oakey