Home – New Forums Starting your journey What is the best way to structure the company? Reply To: What is the best way to structure the company?

#1171240
Carl Desacola
Member
  • Total posts: 21
Up
0
::

Hi Lelo,

As you might have already gathered, there is no “best” way to structure a company. It really just depends on what the relevant stakeholders would like to achieve.

Instead of jumping straight to the issue of an appropriate corporate structure, can I suggest that you first consider what it is you all ultimately want to achieve (particularly your father who presently seems to be a mere unsecure creditor and is therefore at greatest risk).

For example:

> If your father wants to become a part-owner too, and all existing owners agree to it, then the company/partnership can issue him with new shares (diluting everyone’s interests equally);

> If your father wants to become a part-owner too, but only you agree to it, then you can transfer some of your shares to him (diluting your interest only);

> If your father considers the security of his money, rather than future investment gains, to be more important, then he can perhaps arrange to become a secured creditor instead (whether of yourself personally, of all shareholders personally, or of the company itself).

These are just some examples, and there are many more ways you can structure the arrangement. The main thing is to first work out what you all really want, and then let your lawyer and accountant assist you in setting up the right structure and arrangements to make that happen.

(PS. I assume you have Partnership or Shareholders Agreement already in place – if not, I would highly recommend that you get them set up asap!).

Hope this has been helpful!

Kind Regards,

Carl Desacola, Lawyer & Registered Migration Agent (MARN 1461661)
Winthrop Mason | Business Lawyers & Migration Agentshttp://www.winthropmason.com.au