Company or Trust
- Thread starter skater
- Start date
Hi Skater,
I would go with (and have) a trust (with a corporate trustee) as a business structure. If a company makes a profit and you want to distribute it, distribution has to be according to the shareholding. If run through a trust then the trustee has much more flexibilty in distributing income to beneficiaries. There is also a better level of asset protection if a trust is used.
Bill
I would go with (and have) a trust (with a corporate trustee) as a business structure. If a company makes a profit and you want to distribute it, distribution has to be according to the shareholding. If run through a trust then the trustee has much more flexibilty in distributing income to beneficiaries. There is also a better level of asset protection if a trust is used.
Bill
A company may well be sufficient. It depends on the nature of the work, and the likelihood of legal action.
If it's IT, for instance, professional indemenity insurance is cheap and easy to get. A trust would probably not be necessary.
A Subway shop for instance is a much higher risk.
If you do need a trust, keep it separate from any trust you may use for IPs.
If it's IT, for instance, professional indemenity insurance is cheap and easy to get. A trust would probably not be necessary.
A Subway shop for instance is a much higher risk.
If you do need a trust, keep it separate from any trust you may use for IPs.
BOTH
The accountant has set us up with a Company as trustee for a trust. So we get the best of both worlds. Others I've spoken with have suggested this as the best structure for asset protection, the trust purchases the property or business and does what it can, money flows from trust to company, shareholders of company recieve funds.
Cheers
quoll
The accountant has set us up with a Company as trustee for a trust. So we get the best of both worlds. Others I've spoken with have suggested this as the best structure for asset protection, the trust purchases the property or business and does what it can, money flows from trust to company, shareholders of company recieve funds.
Cheers
quoll
This is the way I was thinking as I already have a Trust for my investments, and obviously would use a different entity for Business purposes. The thing that I like about a company is that you can leave profits there and only be taxed at 30%. The other thing that confuses me is the Personal Services Income. Can profit be distributed to beneficiaries if it come from Personal Services?wbthom said:
Skater,
Just keep in mind the provision for not having a substantial amount of income from a single source, or you get treated as a wage earner.
Isn't it fun how four people can answer with basically the same message but put it in such different ways
(BTW: I'd recommend that you use a corporate trustee as well, I do not believe there are many times when it is better to have a human one).
Cheers,
Aceyducey
Just keep in mind the provision for not having a substantial amount of income from a single source, or you get treated as a wage earner.
Isn't it fun how four people can answer with basically the same message but put it in such different ways
(BTW: I'd recommend that you use a corporate trustee as well, I do not believe there are many times when it is better to have a human one).
Cheers,
Aceyducey
And surely a truely independant source at that?
I have heard some people speak of 'artificial' sounding accounting arrangements that I have a feeling wouldnt hold up to an audit.
As I am subject to the PSI legislation myself, and have not had advice from my accountant how to 'get around' the rules, I would love to hear more..
I have heard some people speak of 'artificial' sounding accounting arrangements that I have a feeling wouldnt hold up to an audit.
As I am subject to the PSI legislation myself, and have not had advice from my accountant how to 'get around' the rules, I would love to hear more..
