Family Trust vs Company Australia: Choosing a Business Structure

Рет қаралды 50,368

Күн бұрын

What are some things to consider when deciding on the best business structure for your situation?
Here's what you should look out for when deciding between a Pty Ltd Company structure and a Discretionary Trust.
In this video, I go through:
0:00 - What is a Pty Ltd Company?
0:31 - Advantages of a Company
1:09 - Disadvantages of a Company
2:06 - What is a Discretionary Trust?
2:54 - Advantages of a Trust
4:07 - Disadvantages of a Trust
4:59 - Final Thoughts
Both situations have pros and cons but it's important for you to think about the long term aspirations of your business and what direction you would like to take it.
Blog article: bit.ly/2LsZUjY
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Thank you for watching this video. I post weekly videos on this channel to provide the latest and most frequently asked business questions. Please take a second to say hi in the comments below. Also, if you enjoy my comments and find it valuable, subscribe to the channel, like and share it with anyone who you think might find my channel useful!
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Davie has over 10 years experience in advising businesses in management accounting and taxation issues. He heads up a passionate team at Box Advisory Group who are dedicated to offering proactive and outstanding service to our clients.
Davie’s extensive experience in providing tax and consulting advice and astute business knowledge has paved the way for success for many businesses.
He is a member of the Chartered Accountants Australian and New Zealand, a member of the Australian Tax Practitioners Board and holds a Bachelor of Commerce degree from the University of New South Wales.
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Website: boxas.com.au/
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DISCLAIMER: Please note that every effort has been made to ensure that the information provided in this video is accurate. You should note however, that the information is intended as a guide only, providing an overview of general information available to contractors and small businesses. This guide is not intended to be an exhaustive source of information and should not be seen to constitute legal or tax advice. You should, where necessary, seek your own advice for any legal or tax issues raised in your business affairs.

Пікірлер: 44

@dh4150 3 жыл бұрын

Many thanks - just what I needed to know. About to set up a new business venture but unsure if it will take off or not. Probably stand a better chance of selling it as a whole if it does so the 50% CGT benefit will probably be one of the primary benefits.

@DavieMach 3 жыл бұрын

No worries, glad you found it helpful. All the best with your business venture!

@stanner6169 3 жыл бұрын

What this guy didn't tell u is u can still access the cgt discount via a share sale in the company.

@claraospina4612 3 ай бұрын

Great video, so far is the one that has helped me best to understand how a discretionary trust works. Many thanks😃

@DavieMach 3 ай бұрын

Thank you for watching :)

@trrollinson Жыл бұрын

Appreciate the video, gives me a better idea of how I want to set up our business.

@andycumming272 2 жыл бұрын

awesome vid man

@Spacecadet09662 3 жыл бұрын

Very helpful information. Thank you so much!

@DavieMach 3 жыл бұрын

No problem :) Im trying to release regular videos weekly so dont forget to follow us!

@michaelruttle8567 Жыл бұрын

Still a great video thanks- so well explained appreciate it!

@DavieMach Жыл бұрын

Thanks !

@haithum1884 3 жыл бұрын

Great info, thank you

@DavieMach 3 жыл бұрын

Thanks for watching!

@johncorbett5435 4 жыл бұрын

Thank you for the video

@DavieMach 4 жыл бұрын

No worries John :)

@Trapezius8oblique 4 жыл бұрын

Thank you for your video

@DavieMach 4 жыл бұрын

No worries! Hope it was helpful :)

@RR-ss5bj 2 жыл бұрын

Hi, what works better for online International business based in AU but selling to USA, AU and Europe

@robbiecaruso2164 3 ай бұрын

Can you please make a video on a company with a family trust set up or point me to the right one of you have it already

@jonspencer8324 2 жыл бұрын

Hi Davie, Thanks for the great video. I’m a little confused about one topic of the video. In both pty ltd and trust, you listed the disadvantages of “loss distribution isn’t flexible”. So for both structures, the losses get carried over. Is there a way we can claim against these losses somehow?

@DavieMach 2 жыл бұрын

Losses are just not transferred to shareholder and the beneficiary. It stays within the company or trust. You can claim it on future profits on the company or trust. You just can’t claim it against other income earn in the personal leave. For example soletrader losses can be offset against personal wages. But you can’t do the same with company losses against personal wages.

@velvetjiang340 3 жыл бұрын

Thanks for sharing the information. Does trust need to lodge a BAS?

@DavieMach 3 жыл бұрын

if the trust pays GST as it turnsover 75k or pays wages then yes it does.

@user-tf7tq7qb1e 7 ай бұрын

Hi Wonder whether a sole trader can start a trust Thanks

@jasperboicos 2 жыл бұрын

Great vid helped a lot! What is the difference between a corporation and a company or is company merely another word for corporation?

@DavieMach 2 жыл бұрын

Australia uses the word company rather than corporations. It basically means the same thing.

@jasperboicos 2 жыл бұрын

@@DavieMach sweet thought so cheers

@TheWinstonChu 4 жыл бұрын

Can I ask, in terms of asset protection, what's the difference between operating as a company and a trust? They both sound simlar to me...are you suggesting if the trustee is not a corporate trustee, liability is not limited? Thanks!

@DavieMach 4 жыл бұрын

Yes the trustee will be the individual as thus their wont be much of a protection. Best to speak to a lawyer in regards to this. Also companies are taxed at 27.5 - 30% tax rate and trust really depends on who the beneficiary of the income is. If the individual benefits the tax is at the individual marginal tax rates.

@shaneholbeck6697 3 жыл бұрын

Limited liability is a term I am never comfortable with when describing structures as certain types of actions/debts can lead to the directors being personally liable. Just google “ato director personal liability” for some examples.

@avrileibeck2225 11 ай бұрын

can a trust be with just one beneficiary?

@trace.l1977 2 жыл бұрын

Can the company be a trustee and beneficiary in family trust, so company can retain the lost, or pay less tax after distributing the profits to other beneficiaries?

@DavieMach 2 жыл бұрын

Yes it can depends on how you write the trust deed.

@popiginis7844 2 жыл бұрын

Can we start up a company first and down the track set up a trust or is it best to do it all at once? We have a partnership business that has grown and looking at converting it to a company. We don't have any assets at the moment to protect but were purchasing our own home in the next few months then we will be investing in property in the near future. I can't speak to my accountant, I have a 4-week wait till i see him next.

@DavieMach 2 жыл бұрын

Best to talk to a broker as well about how setting up a company can impact your financing. If you are purchasing after June then setting up a company now could impact your serviceability. It really depends on value of business so best to wait to speak to him. Hard for me to give you my opinion as I don’t know enough info.

@SafariJoe 3 жыл бұрын

I spoke to guy recently who told me that he is setting up a non-registered discretionary trust to hold his income and other assets. He also said he won't need to pay tax on income earned that he put into the trust, is this possible or not?

@DavieMach 3 жыл бұрын

When its too good to be true it probably is.

@shirzamm05 4 жыл бұрын

I definitely think trust are not as good as they use to be compared to 8 + years ago!

@stanner6169 3 жыл бұрын

Not quite as good but still very good structures

@yourenotwrong3511 2 жыл бұрын

Why so?

@warren7565 3 жыл бұрын

You didn't cover payrole advantages

@DavieMach 2 жыл бұрын

Hi Warren, will do it next time then.

@dondoncooking6637 2 жыл бұрын

Hi, I am currently plan to have a business selling products online and need help with business structure. I need some guidance, please let me know the quote and if you can assist with my inquiry? Thanks

@DavieMach 2 жыл бұрын

Best to book in a meeting Don Don!