Why your business structure matters more than you think
Most businesses start in whatever structure was quickest at the time. A sole trader ABN. A single company because the bank asked for one. A trust because a mate had one. It works fine until the business grows, takes on risk, buys property or starts making real money. Then the shortcuts show.
Structure affects three things at once. Tax: which entity earns the income and who it can be distributed to. Risk: what a creditor or claimant can reach if the business is sued or fails. Flexibility: how easily you can add a partner, split a division, hold an asset separately or sell the business without selling everything.
Getting it right early is cheaper than fixing it later. But fixing it later is usually still worth doing.
What a business structure review covers
We start with a full picture of what you have and what you're trying to do. Then we test the structure against tax, risk and your plans for the next five years.
You get a written recommendation with the reasoning, a diagram of the proposed structure and a plan for getting there, including the tax consequences of moving.
- Every entity in the group: who owns it, who controls it, what it does
- Where the valuable assets sit, including property, equipment and intellectual property
- How income flows and where it's being taxed
- Personal exposure of directors, trustees and guarantors
- Loans between entities and Division 7A implications
- What happens on sale, death, divorce or a dispute between owners
- Whether the current setup still fits the business you're running now
Trusts, companies and holding companies
The building blocks are familiar: discretionary trusts, unit trusts, companies, and holding companies that sit above them. The art is in how they're combined for your situation.
A trading company with a holding company above it can generally separate the operating risk from the accumulated profits. A discretionary trust can give flexibility about who receives income. A unit trust can suit unrelated parties going into business together. Each has rules, costs and trade-offs under the ATO's current approach, and none is right for everyone.
We explain the options in plain English, including the ones we don't recommend, so you understand why the structure looks the way it does. Our trusts and companies page goes deeper on each.
Asset protection for business owners
Asset protection is about making sure that if the business has a bad day, it doesn't take the house with it. That generally means keeping risky activities away from valuable assets, being careful about personal guarantees, and making sure the people who control the structure aren't also the people holding the exposure.
It's also about doing things properly and early. Structures put in place after a problem has emerged rarely hold up. Structures put in place as a normal part of growing a business generally do.
We work alongside your lawyer where legal documents are needed. Our job is the design, the tax position and the ongoing operation of the structure once it's live.
Restructuring a business that has outgrown its setup
Moving from a sole trader to a company, or from a single entity to a group, involves tax consequences. Capital gains, stamp duty, GST and the rollover concessions available under the ATO's current rules all need to be considered before anything is signed.
We map the move, model the cost, and sequence it so the business keeps running. Many restructures can be done with little or no immediate tax cost if they're planned well. Done badly, they can trigger a bill that cancels out years of benefit.
Inga from Niche Luxury Transfers: "Lauren has been absolutely fantastic in guiding us through the set-up of our Pty Ltd business." That's the standard for every setup and restructure.
Who this suits and how we work
Entrepreneurs building multi-entity groups. Founders preparing for sale. Businesses taking on property, partners or serious contracts. Families with wealth that needs to be held sensibly. We see this across construction, franchising, real estate, allied health, transport and NDIS services in Brisbane and Queensland.
It starts with a strategy call. We'll tell you honestly whether your current structure is fine, needs tweaks or needs a rebuild. Then we quote the work and get on with it, from Victoria Point, Jimboomba or by video.
Questions we get asked
What is the best structure for a small business in Australia?
There isn't one. Sole trader, partnership, company and trust each suit different situations, and most growing businesses end up with a combination. The right answer depends on your income, risk, plans for growth or sale, and who else is involved. A structure review looks at all of those before recommending anything.
What is a holding company and do I need one?
A holding company owns the shares in your trading company, so profits can generally be moved up and out of the risky operating entity. It's common once a business is making consistent profits it wants to keep rather than spend. Whether you need one depends on your profits, risk and plans, which is what a review works out.
Can I change my business structure without paying tax?
Sometimes. The ATO's current rules include rollover concessions that can allow certain restructures with little or no immediate tax cost, but the conditions are specific, and stamp duty and GST also need checking. The answer depends on what's moving and why. Planning before you act is what makes the difference.
Does a trust protect my assets?
A properly set up and operated discretionary trust can help, because the assets are held by the trustee rather than by you personally. But protection depends on how the trust is run, who the trustee is, and whether the arrangement was in place well before any problem arose. It's one tool among several, not a magic shield.
How long does a restructure take?
A simple setup, like a new company with a holding company above it, can be in place within a few weeks. A full group restructure involving asset transfers, rollovers and new agreements typically takes a few months, because it needs to be sequenced carefully around tax, financing and the business continuing to trade.
