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September 30, 2020 at 7:43 am #1000394Up::0
Hi all,
I’m new to this forum so please be nice
My spouse has started a new business that I have predominantly funded myself (75%) to get up and running. When she registered the business with the ATO it was done as sole trader and only with her name on the business. I obviously want to be included as part owner of the business but how do we now go about doing it?
What tax implications are there if i am working a separate full time job?
I am not wanting to get onto the business to earn a salary more to add security to this investment.
Any help/suggestions would be greatly appreciated
Many thanks
ASeptember 30, 2020 at 8:56 am #1224195Up::0Hi Andy – cannot say anything about the tax implications etc (you may need to speak to an accountant about that), but, to be ‘named’ as part owner you will need to have a different structure.
A sole trader implies it is a single person operating/owing the business. From your post it sounds like you may need to look into a partnership structure. This would mean you are both seen as partners in the business; you would get an ABN for the partnership and transfer the business name from her sole trader ownership to partnership. You would want a good partnership agreement that discusses each person’s responsibilities, obligations etc. Even thought it is with your spouse, a partnership agreement is a good idea.
I think for your circumstances a chat with a lawyer who can help with the agreement and an accountant who can go over the tax and financial side is probably worth while.
All the best
September 30, 2020 at 10:26 am #1224196Up::0JacquiPryor, post: 271029, member: 20176 wrote:Hi Andy – cannot say anything about the tax implications etc (you may need to speak to an accountant about that), but, to be ‘named’ as part owner you will need to have a different structure.A sole trader implies it is a single person operating/owing the business. From your post it sounds like you may need to look into a partnership structure. This would mean you are both seen as partners in the business; you would get an ABN for the partnership and transfer the business name from her sole trader ownership to partnership. You would want a good partnership agreement that discusses each person’s responsibilities, obligations etc. Even thought it is with your spouse, a partnership agreement is a good idea.
I think for your circumstances a chat with a lawyer who can help with the agreement and an accountant who can go over the tax and financial side is probably worth while.
All the best
Thanks for the feedback and quick response Jacqui.
I will certainly look into both of your points.
Thanks againOctober 1, 2020 at 1:42 am #1224197Up::0As far as general information goes, a sole trader is mainly for individuals running a business. It is commonly used for single operator businesses, subcontractors, and freelancers.
For someone looking to partner with another person, setting up a company or partnership are options but each comes with their own set of costs, liabilities, and tax implications. This is why it is important to speak to a professional.
You’ll need to speak to your accountant in terms of structuring the right entity regarding tax and liability.
https://www.businesstrade.com.au/basic-business-structures-explained-australia/
businesstrade.com.au - buy or sell a businessOctober 1, 2020 at 2:10 am #1224198Up::0Generally you dont pay additional tax just by being an owner of a business. However the tax you pay or the losses you can claim from the business depends on the structure and nature of the business. Best to connect with a good accountant.
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