Business Structuring and Advice
There are three distinct stages of any business – setup, growth and succession. Each stage needs careful planning to make sure you get the best outcomes for yourselves and for the business.
The MJC Partners team have the technical skills and knowledge to help you with each stage of your business. Whether it be structure advice, business valuations, Small Business CGT Concession Analysis and implementation or advice on vendor’s terms or progressive buy ins, MJC Partners will ensure you get the most from your business.
By setting up your business structure correctly in the first place you can avoid major headaches in the future. The appropriate structure can save you tax, enable more favourable lending terms from the banks and protect your assets.
Some accountants will advise you to set up the structure that has the smallest outlay (usually a sole trader or partnership). Whilst these structures undoubtedly have their place, at MJC Partners we look at the goals and objectives of the business, as well as the risk to your personal assets to assist you with choosing the right structure.
We also go a step further, and begin a conversation about how the business will operate, and how decisions will be made. How do you deal with disagreements between business partners? Will you be putting in the same amount of work, or will one partner contribute money and the other work? What level of work is expected? Your business structure will dictate whether you need a shareholder’s agreement, a partnership agreement, a partner’s agreement or some other arrangement.
Business owners see an immediate return when they focus on growth, and as a result growth is often prioritised above looking at the business structure as a whole. By taking a step back and analysing where you are and where you want to be, you may be surprised that you have outgrown your original business structure.
Maybe you started as a sole trader but now have significant personal assets and need a structure that will protect your assets. Maybe you were renting a business premises but are now looking at purchasing one.
There may be some restructuring opportunities (for example the Small Business Tax Concession) that will save you tax by restructuring.
Many people fail to capitalise on the value they have built in their business by not thinking to the future. They simply wait until they are ready to retire and close up shop – destroying the value they have built up over many years.
You need to look at your exit strategy years before you are ready to exit the business. Maybe there is someone in the business that can be trained up to take over from you. Maybe you need to look at attracting new talent. What will that transfer look like? Will it be vendor’s terms or a progressive buy in? What is the value of the business that they are buying into?
How can you maximise the value of the business before the transition to ensure you are adequately rewarded for your hard work?
By the time you are ready to retire it is already too late. MJC Partners will work with you to develop a strategy, and help you work towards that outcome.
Our Clients Say
“Succession planning is a potentially stressful and costly process. We were faced with the potential dilemma of transitioning our business to the next generation in a tax effective way. Through MJC’s knowledge of the intricacies of the tax system, along with their network of valuers, tax lawyers and advisors, they were able to ensure we paid no CGT at all! Not only this, but the structure we now have is better for asset protection, is more tax effective, and is a better structure for future succession.”