Business structure

[AIDMT]

Hi Everyone. I am planning to start a business with my brother, who is based in NZ. What we want to do is something like have a parent company and then operating small businesses under it. But the parent company we want it to be a discretionery trust, which will have a corporate trustee. Now, is it possible to do multi businesses under one trust, businesses such as property investment, shares, and other small business. Any help much appreciated.

Regards

[Burgo]

Can't see why not but in which country will the parent company be in ? Which ever please talk to a Chartered Accountant and your friendly solicitor for the finer details.

[AIDMT]

Hi Patrick. Thanks for your reply. If I can operate multiple businesses under one discretionary trust, does it need to have a separate business structure or it can also be a trust.

Thanks

[peppie]

I really have no direct experience of trusts in a business sense, only as associations.

But as I understand business structures in general and also as tax laws pertain (because you also have to have tax office blessing), it essentially comes down to where the identity is. That is, if you set up a P/L company it is the company that is the identity for purposes of tax and registration. You can run another business under that that would be described as your company "trading as". It becomes an umbrella structure and all the accounting is done within that one structure.

If you want separate entities you have to have separately registered businesses.

You cannot work outside what the system will allow. For ex., I have 2 business names and I asked the bank if I could have them both working from the same bank account with one of them "trading as" from the other (2 separate cheque books). But no, being separate entities they have to have separate bank accounts. To do what I wanted one would have to be a company.

The short answer is as Burgo says, you need to talk to a decent accountant. Otherwise all you are doing is second guessing.

[sandhurst]

why not incorporate your company in singapore.

Plenty of tax benefits such as follows:

first S$100k net profit free for the first 3 years
next S$200k net profit taxed at 9% only
Low corporate tax rate of 17%
Highest rate of income tax 20%
no tax on dividend income

and gentlemen and ladies many more advantages......

look up my website www.e-sandhurst.com
and you can contact me at info@e-sandhurst.com

I am a singapore born UK qualified chartered certified accountant and I have many australian clients

[AIDMT]

Thanks SandHurst for your tip, that can be one of the options to consider. But not now anyway. Thanks.

Originally Posted by sandhurst

why not incorporate your company in singapore.

Plenty of tax benefits such as follows:

first S$100k net profit free for the first 3 years
next S$200k net profit taxed at 9% only
Low corporate tax rate of 17%
Highest rate of income tax 20%
no tax on dividend income

and gentlemen and ladies many more advantages......

look up my website www.e-sandhurst.com
and you can contact me at info@e-sandhurst.com

I am a singapore born UK qualified chartered certified accountant and I have many australian clients

[AIDMT]

Thanks guys, now I think I have got my head around the business structure. Tell if this is alright. I will open a company, a $2 company. This company will be the trustee of my Trust Business and under this I will register different business trading as different names. So far so good.
Now the problem I am facing is that, my brother is in Nz and I am in Australia and we will be operating our business respectively in our area under one Trust structure. At the end of the day how are we going to decide who gets paid what. Do we have to get a legal agreement or work according to industry rates. How will we weigh who has put how much effort towards the business. I know I should ask my accountant all this, but I want to have atleast some kind of direction before I go to accountant with these questions.

Any help will be much appreciated.

Thanks

[Burgo]

TALK TO AN ACCOUNTANT.

You really do need to get the very best advice possible otherwise you will stuff up big time. Laws regarding trusts are quite complicated, and as we only offer our opinions here on the forum, they are opinions.

If you want to minimise your tax ( which would apply in both contries) then an accountant is your only option

[Lisa Murray - Biz Coach]

Burgo is right - you need to talk to a good accountant - I have a whole trust structure set up, but I got a good accountant to do it - too many problems if you don't get it right - and yours is not a simple situation!!

cheers
Lisa

[McAdam Siemon]

You need to discuss this issue in depth with your accountant. The initial structures you put your business in will dictate everything for the future and if you enter the incorrect structure in the begining it can be very difficult and costly to change the structures. Plus you have the added issues of international trade and I would suggest would need to engage the services of an accountant in NZ also as structures will need to be set up there.

This is a critical issue in starting up any business and you need to seek the best professional advise that considers all factors involved.

One size does not fit all when it comes to structuring your business.

Cheers

Sam