What to do with my DT and company trustee

Discussion in 'Legal Issues' started by Coconutwheels, 27th May, 2015.

  1. Coconutwheels

    Coconutwheels Member

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    G'day,

    I have a Discresonary Trust with a company trustee that was used to own my small business.

    I've since sold the business and wondering what's the best use of the DT and company?

    Obviously I'll be seeking specific advise, but just after a few ideas/education.

    Would it still be useful to own property or shares assets, or could there be issues down the track, if for example I was liable for any issue that arose to do with the old business?

    Alternatively I'm looking to start a small Handyman business, very small scale for a little extra cash. Would it be useful for ownership of this, or a bit of over kill?

    Cheers,
    Ben
     
    Last edited: 27th May, 2015
  2. Terry_w

    Terry_w Member

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    If it was a trading business then the trustee could still be sued over previous dealings. The risk will depend on what it had done in the past.
     
  3. TMNT

    TMNT Member

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    sorry to hijack,

    I have a PTY LTD with a trust attached ,

    its been doing nothing since 2011, I pay the $270 odd ASIC fee every year on the advice that my accountant says to keep it open in case I do a development project, as reopening would cost $1k+

    Im a tite wad, can I put it to sleep somehow and not pay the fee, while keeping it openable ?
     
  4. Coconutwheels

    Coconutwheels Member

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    That's what I was worried about.

    It was a pizza shop, however we employed a lot of staff over the years.

    Maybe it'd be ok for my little handyman venture, it wouldn't have any assets really.
     
  5. Coconutwheels

    Coconutwheels Member

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    Haha...no worries I'm interested too.

    I kept my business account in the company name open as well, under advice from my accountant. The $10/month really peev's me off.
     
  6. Terry_w

    Terry_w Member

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    You could change trustees and wind up the company.
     
  7. Paul@PFI

    Paul@PFI Tax, SMSF & Planning

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    If the trust has no assets it may have already ended. A trust is much more than a signed trust deed. Many accountants can miss that point. Have a look at the financial report and see if there are identified trust assets or liabilities and check if there is still a bank account. These may be indicators the trust till exists. However the question needs to be asked if it is worthwhile.
     
  8. Paul@PFI

    Paul@PFI Tax, SMSF & Planning

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    The Company can de-register for around $45 BUT only if the declaration on ASIC Form 6010 can be satisfied.

    http://asic.gov.au/for-business/closing-your-company/deregistration/

    You wouldn't want to do that before the trust is terminated or a replacement trustee appointed. But if the trust ceased to hold assets its possible the trust has already ceased and leaving it on the shelf for later use could actually be a foolish choice. It may be later argued that there isn't a trust. You cant end and restart a trust. It can create a stamp duty and tax nightmare.

    I have two rules with structures / entities:
    1. Don't recycle them unless there is a sound reason
    2. If they have ended then don't preserve them unless legal advice says otherwise.

    The formalities (ATO ?) may need closure too
     
  9. TMNT

    TMNT Member

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    Does that mean any form of negative credit/personal implications,

    are there any costs?

    The only thing I ve ever wound up is my ex wife, and the casette when my car cassette player didnt work ;)
     
  10. Terry_w

    Terry_w Member

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    Voluntary deregistration. No negatives.

    You can do it yourself for free or engage a lawyer. You must remove the trustee before it is deregistered.
     
  11. Paul@PFI

    Paul@PFI Tax, SMSF & Planning

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    If you DIY all you need is the Corporate Key issued by ASIC (located on last annual review statement) You don't need a lawyer unless you seek legal advice on the trust. You can use an accountant who has a ASIC agent registration.

    DIY for a single A4 piece of paper is very easy. The hard part is:
    1. Ensuring that the trust has ended OR change trustee before acting;
    2. Ensure the declaration is correct. Criminal offences apply with making false declarations as a Co Director. You may be surprised how many people have filled in the Form 6010 when they had a tax debt thinking that it will go away if the company is dead.:eek:
     
  12. Terry_w

    Terry_w Member

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    Or legal advice on the deregistration of the company. This is done under the Corporations Act.
     
  13. Coconutwheels

    Coconutwheels Member

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    Thanks for all the replies.

    I'm thinking if I had no immediate plans I'll shut it all down. Considering the annual costs it wouldn't be much more to start a new one anyway, and then there's no risk from previous dealings.

    If I go ahead with my little handyman/bookkeeping biz I'll seek advice around "re-using" the structure. Although the income would be small it could be very handy to have full flex wrt who the income is distributed to.

    Cheers,
    Ben
     
  14. Terry_w

    Terry_w Member

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    As long as you overcome the PSI rules.