My First Trust/Company Structure Queries

[arbitrage]

Hi Everyone,

I'm 21, an aspiring property investor and business owner, i have some queries regarding the best structures for me.

I'm a Tradie and have always worked as a Tfn employee or using my A.B.N.

I have recently won a reasonable sized contract and have decided that it's time to set up my dream structure.

I could be going a bit extreme to begin with but would love to set in place the right foundations allowing me conduct business through the structure while minimizing liabilities. And with any luck this will enable me to borrow money for future acquisitions.

I'm think along the lines of a Family trust, controlled by a non trading company, followed by a unit trust which owns the painting company and distributes the income and lease's any assets from elsewhere in the structure.

This is about where my knowledge ends.

I would appreciate any feedback from users on this forum,

Or if you could steer me towards any of your trusted and or recommended Accountants,Solicitors or Conveyancers preferably in Victoria, though I'm willing to travel to meet the right people.

Thanks in advance

Ps I have over 6 years experience in the building industry and could add some value to this forum if anyone has questions. I have many connections in Melbourne and the south east Queensland.

Pps Apologies for the double post as i was unsure which section this should be in.

 

[alexlee]

I'm think along the lines of a Family trust, controlled by a non trading company, followed by a unit trust which owns the painting company and distributes the income and lease's any assets from elsewhere in the structure.

Interested in hearing what you aim to achieve by having a $2 company as corporate trustee for a family trust, and the family trust owns a unit trust, and the unit trust owning the painting company? What's the point of the unit trust? And what sort of trustee will you have for the unit trust?

Don't assume there is a 'perfect' structure. Structures should evolve as your own circumstances do: how much income you make, whether you have family to distribute income to, etc. There are also other considerations: small businesses get concessional treatment re depreciating assets, etc.

 

[Lofty]

Hi arbitrage

I've got to agree with alexlee, i.e. your structure should be reviewed and changed as necessay, as you move forward.

At the moment we operate our vendor finance real estate in a unit trust with the units owned by our family discretionary trust. One of the advantages of this structure, from a real estate point of view, is the way the different trusts are treated for stamp duty calculations.

A number of friends of ours in Vic use and recommend:
Gatherum - Goss & Associates
PH: 03 8813-0162

Cheers, Paul

 

[Terryw]

Hi arbitrage

What you want is to protect your liability from any potential actions related to the business. So a Pty Ltd company would be the best option to run the business.

You would also want some protection if you are personally sued for any reason. You wouldn't want your shares in the business to be at risk. using a discretionary trust is a good idea for this.

Not sure what benefit a unit trust would add. Although you could have other assets of the business owned by separate discretionary trusts. That way if the company got sued and went down the assets owned by the other entity would be quarantined.

 

[AVD]

Hi there!

You really need to sit down with someone and speak about your short terms goals as well as the long term goals. You mention you are an inspiring investor - where does this come into the equation? Is your intention to have the business in one trust and the properties in another?

One such scenario is you could possibly have the business operating from one trust and the properties (assume negatively geared) held within another, and you can then distribute profits from one trust to the other utilising the profits to absorb the others losses.

Of course, it depends what your focus is (asset protection, tax reduction strategies) and the investing activities you wish to pursue.

Hope this helps somewhat.

Alysha

www.gatherumgoss.com