Business Structures Advice Perth

Companies and Businesses Perth and Western Australia Advice on Best Business Structures

Too many people set up businesses without carefully considering the best business structure that can be tax effective and protect assets.

It is important to know what the legal consequences are and what the legal protections are from choosing a certain type of business structure. Too often, there is no proper partnership agreement setting out who has to do what work, where the company capital is coming from, what the partners will do if they want to sell nor what they will do if they have a dispute.

We can help set up the best business structures for individuals, partnerships and companies to protect assets from creditors and minimise directors’ risks.

We assist business owners and entrepreneurs start up, manage and grow businesses, including online businesses. Experienced business owners starting new ventures should also consider whether they understand the best structures available to achieve asset protection and to minimize the risk of disputes with partners or other shareholders.

Startup and structure legal advice from experienced Perth Lawyers is needed at the start and the following points will help you to set-up and manage your new business and any new online business:

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1. What legal structure best fits your business?

When you start up a new business or want to restructure an existing business it is important to decide what business entity structure will be most effective. Five factors you need to consider before deciding on the structure of your business are:

• Gaining the most effective tax management i.e not paying any more tax than you are required to.
• Protecting your assets and your business assets.
• The cost of setting up the business and maintaining the structure in years to come.
• Agreement with your partners on who is to do what and how disputes will be resolved.
• Succession planning and general flexibility as some structures are easier to exit than others.

It is common practice that new businesses are set up with the one of the following structures:

• As a sole trade
• As a company
• As a partnership; or
• Through a trust.

Different structures have different legal requirements, liability limitations as well as tax consequences. We can provide you with information on the positives, as well as the negatives, for each of the different structures noted above.

2. Agreements with business partners

It is vital that you work out the jobs that you and your business partners will carry out and have a clear understanding of who will do what. This will significantly reduce the likelihood of disputes in the future.

Once you have come to an understanding with your business partners as to each other’s responsibilities then you should formalise the agreement. We can draft an agreement for you so that all parties have a clear understanding of their role in the business.

In ascertaining each of the business partners’ responsibilities, it is important to consider:

• Who will do what tasks?
• How will the partners effectively make decisions relating to the business?
• What action shall be taken in circumstances when a business partner wants to leave the business?
• What will happen in the event one of the partners dies or becomes unable to carry out his/her responsibilities as a business partner?
• What circumstances will see a business partner being required to leave the business?

3. Registration of the business name

An important part of starting up a business is considering the name that the business will operate under. The name that you eventually decide upon, will need to be registered and similarly, if you operate under a company name, that will need to be registered as well.

4. Terms and Conditions

All businesses need good terms and conditions to protect them and to provide security.

Some of the key issues which are commonly included within terms and conditions are:

• Price and Payment Terms
• Terms of Delivery of Goods
• Refunds and Returns Policy
• How to Place an Order for Goods and/or Services
• Governing Law and Jurisdiction
• Business Warranties
• Limits on Business Liabilities
• Restrictions of Website Use
• Use of Confidential Information
• Ownership of Intellectual Property

We can assist you in drafting terms and conditions that are specific to you, your business and the specific industry in which you operate.

5. Registration of Domain Names

Your URL or Domain Name is the address used on the internet for your website. Typically your Domain Name would include your business or company name.

Your domain name is an important part of your business’ identity which allows your customers to differentiate your business from your competition and identifies your business to your customers.

We are able to work with you to register your domain name.

6. Registering your business for Tax Purposes

When starting up a new business you will need to obtain an Australian Business Number (ABN), a Tax File Number (TFN) and you will also need to register for GST for tax purposes. Depending on the nature and structure of the business, there may be other requirements in addition to those already mentioned however we can advise you on any such requirements.

7. Leasing of Premises

If you are going to lease premises for your business then there are many important factors that you need to carefully consider. Some of the important points are noted below:

• Are the premises you are considering leasing the best suited to your business’ needs?
• What is included within the lease for fit out or refurbishment requirements for the premises?
• Once your business is up and running, will it be able to maintain the rent and other costs payable pursuant to the lease?
• Do the initial and subsequent terms of the lease coincide with the future plans of your business? Do you need to consider including an option to renew within the lease?
• If necessary, are you able to exit the lease early and if so, on what grounds?

8. Insurance

Upon the establishment of a new business it is vitally important that you weigh up the varying types of insurances that are available and consider which type(s) are applicable to your new business and which types may be legally required depending on the industry which your new business operates within. Many of the common insurances are noted below:

• Public Liability Insurance
• Workers Compensation Insurance
• Indemnity Insurance
• Building and Contents Insurance
• Income Protection Insurance
• Death and Permanent Disability Insurance

9. Licence Agreements

There are many uses for licence agreements in business structures – read further on our Licence Agreements page and contact us today.