Every business needs a solid foundation, and structure is a critical aspect of that.

It's not just "which one do I set up", but questions around asset protection, income tax efficiency, access to the small business concessions in capital gains tax, and perhaps expansion or succession in the future.  If things go pear-shaped, the wrong structure can leave you in a difficult position.

There is no perfect structure (sole trader, partnership, company, trust).  Each has advantages and limitations.  When we consider this question we review several important factors, including:

- Ownership and funding

- Control

- Costs of establishment, maintenance and wind-up

- Risk Management

- How the business needs to operate (management, finance)

- Tax efficiency

- Return to owners (capital growth, changes in equity, access to gains)

It is not possible to know the future, but you can plan for "must haves", so the key factors to consider are usually:

Asset Protection

This includes protecting the family home from direct action or from the obligations of a director (creditors, guarantees, employment obligations, ATO director penalties for super and PAYG deductions).

Income Tax

Considers minimising of tax rates, allocating income to non-members and other entities, protecting losses, passing on tax credits, access to tax concessions and grants.

Capital Gains Tax

The small business concessions can mean no tax is paid on the sale of a business.  It is not an automatic right, there are many conditions to be met and these can't be arranged at the last minute.

A couple of essential thoughts on structure.

- Seek professional advice on the pros and cons of various business formats

- Don't make a decision for 'cheap', you need a structure that will achieve the key factors above. 

PS:   From 1 July 2016, new legislation allows for the rollover of assets into a new structure, without any income tax or capital gains tax.  However, State stamp duty is still payable.  It maybe a way to fix up some aspects of your current structure if you have concerns.  We'd be happy to discuss this if you want to see how it may help you.