I recently had the pleasure of attending Derby Day at beautiful Eagle Farm Racecourse. It was a great day with lots of racegoers having a flutter on the horses. If there’s one thing that you don’t want to gamble on though, it’s protecting your business and personal assets. In fact, this is one area that I regularly see issues with among small business owners and choosing the right business structure will pay dividends when reviewed and done right!
In my experience most small business owners do not structure appropriately for their circumstances. It still surprises me how many people aren’t aware of the impact that having an incorrect business structure has on both their tax position and the protection of their business and personal assets.
Most of my clients know that one of the first things I do when a new client comes on board with Taggart & Partners is to look at how their business is structured. If you own a business or have an investment portfolio, structuring your affairs and choosing the right business structure can significantly reduce the amount of tax you pay, improve your financial position and reduce risk.
What’s more if you don’t operate your business in the most appropriate structure, your personal assets, such as your home, may be exposed to claims by creditors. Structuring your business correctly therefore adds an extra layer of protection and is absolutely vital to minimise your risk and protect your assets.
Business structuring should never be viewed as a ‘set and forget’ task. The world around us is constantly changing i.e. the economy is fluid and forever changing; governments come and go; new laws are enacted every year; world events have a global impact and personal circumstances change each year as we move through the circle of life.
For these reasons it is absolutely vital that all business structures are reviewed annually.
Don’t gamble with your future.
If you’re starting a business for the first time, choosing the right business structure from the get-go and then reviewing it annually to ensure it remains the most appropriate for your needs as your business grows is one of the best ways to set up your business for success.
And if you’ve been in business a while, make sure you talk to your accountant today to make sure your business structure is delivering the most effective protection of your assets and putting you in the optimum tax position for the New Year.
At Taggart & Partners, we offer SMSF accounting services that specialise in assisting our business clients to achieve maximum asset protection, minimise their risks and achieve tax efficiency.
We do this by ensuring that our clients are appropriately structured for their specific circumstances. Having the correct business structures allows us to ensure that our clients achieve their optimum tax position each and every year i.e. that you do not pay more tax than is necessary and that you do not pay it to the ATO any earlier than required.
We are a little different from most accounting firms, choosing to focus on the above three cornerstones of business rather than focusing merely on tax compliance and lodgement obligations. Whilst tax compliance is important, we believe that it should be secondary to growing a successful and profitable business.
For more quick tips to help your small business, be sure to check out series of Taggart Tips on our blog roll.
Updated 18 May 2020