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  • #979403
    herewego
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    Hi there,
    Yep, complete newbie here but I swear I have done a good bit of searching and had no luck before posting this.

    My partner and I have the goal of getting into property renovations as a full time business but want to do our first 1 or 2 projects under our own name i.e. outside any business structure.

    However, we want to be able to approach real estate agents as “Jeff and Marina from blah blah blah Property Renovators” (to be treated seriously and hopefully get a slight preferential treatment) and also to approach building supplies companies as a professional looking outfit to secure the best deals (e.g.. receive ‘trade’ price). Also, we’d like to secure our company name so it doesn’t get taken by someone else.

    We envisage that our eventual operating structure will be along the lines of…
    Discretionary trust with sole trader pty ltd trustee company for asset protection and ability to distribute profits and…
    Sole trader pty ltd operating company to operate as ‘project manager’ and give an extra level of asset protection.
    We don’t expect to be at this level for a few years but I don’t want to compromise our ability to set this up by doing it wrong from the start.

    So… if we get an ABN and register our business name but have no turnover for a year or 2, what are our obligations to the ATO?
    Do we need to lodge BAS’s?
    How complicated wil EOFY accounting obligations be?
    Any other advice?

    I have an appointment to see the local BEC in 10 days but would like to go in a bit better informed than I am right now.

    I hope I’m not asking too much for a first ever post!

    Thanks
    Jeff

    #1114043
    Divert To Mobile
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    herewego, post: 127732 wrote:
    So… if we get an ABN and register our business name but have no turnover for a year or 2, what are our obligations to the ATO?
    Do we need to lodge BAS’s?
    How complicated wil EOFY accounting obligations be?

    Hi Jeff,
    1. Your obligation is the same as a sole trader, tax return once a year.
    2. You only lodge BAS if you register for GST. (its a requirement once your business revenue exceeds 75k)
    3. Easy any accountant should be able to help you.

    BTW, nice work with your planned structure.

    Steve

    #1114044
    AGMBris
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    Hi

    I agree with the previous post, very good research and consideration on your organisational structure, definitely worth doing from the outset and it sounds like it is a committed venture so you have done the right thing.

    In terms of lodgements, the advice so far is correct – you will need to lodge for GST once you reach a certain turnover ($75K) so this would be a little depending on what happens with sales. So BAS lodgement will not be for a while although I feel you may need to lodge NIL statements it is just that GST becomes a requirement at $75K, perhaps check that with your BEC or accountant.

    The entities would need to be administered re ASIC requirements and NIL lodgements re: tax returns and that can be a bit more costly unless you can do those yourself, which btw is definitely possible. The trust may be a bit harder but you could learn.

    I would say check out the implications of Capital Gains where you start in individual names and then need to move assets into the trust.

    Good luck, sounds exciting.

    #1114045
    JacquiPryor
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    However, we want to be able to approach real estate agents as “Jeff and Marina from blah blah blah Property Renovators” (to be treated seriously and hopefully get a slight preferential treatment) and also to approach building supplies companies as a professional looking outfit to secure the best deals (e.g.. receive ‘trade’ price). Also, we’d like to secure our company name so it doesn’t get taken by someone else.

    In addition to the previous comments… if you wish to say you are Jeff & Marine from “blah blah blah Property Renovators” then, the “Blah Blah Blah Property Renovators” part would need to be registered as a business name, at the least now – whether you immediately start making money or not. If you are trading by any name other than your own then this is a requirement. Introducing yourselves this way will create the impression you are trading by that name – so safest to register it.

    You could essentially create a partnership, and the business name could then be owned by the partnership (which is just the two of you as individuals really) and then the ABN belongs to that partnership. A business name itself is not a legal entity – your partnership would remain the entity so it is really just ‘you’ doing the initial projects but kind of like it’s under the alias of the business name. (Note that when you later work on your ultimate structure this could involve new ABNS to notify to suppliers/clients etc come the time).

    As to securing your company name so no-one else gets it… don’t forget to look into trademark registration as your plans move forwards and you’ve found your feet. Even if you register a company name this doesn’t guarantee you the right to use that name, or provide any right to stop others using the same/similar name – that’s where the trademark comes into play. Obviously, if all goes to plan you want your company name and structure set up – but the trademark registration is where you actually are granted the right to ‘use’ that particular name, promote it, license it, sell it, take action against others who are infringing etc.

    All the best with it. :)

    #1114046
    herewego
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    AGMBris, post: 127743 wrote:
    The entities would need to be administered re ASIC requirements and NIL lodgements re: tax returns and that can be a bit more costly unless you can do those yourself, which btw is definitely possible. The trust may be a bit harder but you could learn.

    I would say check out the implications of Capital Gains where you start in individual names and then need to move assets into the trust.

    Good luck, sounds exciting.

    Thanks a lot for the comments and compliments!

    The first project would be for buy, renovate and sell and the trust would take on the later projects so I don’t see capital gains complications until the trust started to operate as there would be no assets except cash in our own names.
    (btw, by partner I mean spouse.)

    I’m good with numbers and masochistically enjoy the tax side of it all so doing my own returns may well be a possibility. I just need to search a bit more into the ASIC administration requirements.

    Jeff

    #1114047
    herewego
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    JacquiPryor, post: 127755 wrote:
    You could essentially create a partnership, and the business name could then be owned by the partnership (which is just the two of you as individuals really) and then the ABN belongs to that partnership. A business name itself is not a legal entity – your partnership would remain the entity so it is really just ‘you’ doing the initial projects but kind of like it’s under the alias of the business name. (Note that when you later work on your ultimate structure this could involve new ABNS to notify to suppliers/clients etc come the time).
    All the best with it. :)

    Thanks Jaqui.
    If we create the partnership then we wouldn’t be a “sole trader with no assets” pty ltd right? Wouldn’t that affect our asset protection intentions?

    Jeff

    #1114048
    JacquiPryor
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    Hi Jeff – yes, that’s correct.

    Sorry didn’t mean to confuse the discussion – I was referring to simply the ‘here and now’ part of your post, about wanting to do the first couple outside of the formal business structure being set up. If for the first couple of projects you want to simply be yourselves and not through the eventual structure set-up you describe – then, you would still need to register a business name to represent you are from “blah blah property renovations”… initially, you could register the business name in both your names as a partnership – or one of you as quite literally a sole trader. Doing this initially though, as noted, will mean a change of ABN etc down the track when you do go through with your eventual structure idea.

    (hope that makes sense and again, sorry – didn’t mean to confuse the subject :))

    #1114049
    TheGoldenGoose
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    Hi Jeff

    How exciting! Hubby and I considered doing the same thing a few years back. Good fun! We have been renovating our current house on the side for 4 years ;) Due to finish ‘soon’ – you know how it is.

    Best of luck!

    #1114050
    Kennethti
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    JacquiPryor, post: 127762 wrote:
    Hi Jeff – yes, that’s correct.

    Sorry didn’t mean to confuse the discussion – I was referring to simply the ‘here and now’ part of your post, about wanting to do the first couple outside of the formal business structure being set up. If for the first couple of projects you want to simply be yourselves and not through the eventual structure set-up you describe – then, you would still need to register a business name to represent you are from “blah blah property renovations”… initially, you could register the business name in both your names as a partnership – or one of you as quite literally a sole trader. Doing this initially though, as noted, will mean a change of ABN etc down the track when you do go through with your eventual structure idea.

    (hope that makes sense and again, sorry – didn’t mean to confuse the subject :))

    Doing this may also be considered to be a transfer or a sale of business from the old entity to the new entity. This may incur stamp duty.

    #1114051
    Cjay
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    Interesting idea. I know of a couple of outfits who do similar things. Some purely run on consultancy, others ‘hold the hand’ of investors, whilst others do pure development, reno’s and flip/keep for cashflow dependent on the end circumstances.

    You might want to consider whether RE Agents will give you favourable treatment if you say you are from XYZ company. In my experiences, the RE is looking for the sheep to slaughter, coming across as a professional fit-out may have inverse treatment as they would think of you as cashed up. Also, the cherade comes to a halt if you just get an ABN + business name, as it would be put in your personal names than a company. RE’s are interesting people, and can take things in different ways.

    Though on the front of getting supplies, it is a generally a good idea to come across as a biz as to get trade prices.

    If you’re going to get into the property game like this, you will definitely want to find yourself a good team to work with: Property based accountant, structured investment finance broker, conveyancer, solicitor etc.

    Best of luck. :)

    #1114052
    herewego
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    Cjay, post: 127796 wrote:
    You might want to consider whether RE Agents will give you favourable treatment if you say you are from XYZ company. In my experiences, the RE is looking for the sheep to slaughter, coming across as a professional fit-out may have inverse treatment as they would think of you as cashed up. Also, the cherade comes to a halt if you just get an ABN + business name, as it would be put in your personal names than a company. RE’s are interesting people, and can take things in different ways.

    If you’re going to get into the property game like this, you will definitely want to find yourself a good team to work with: Property based accountant, structured investment finance broker, conveyancer, solicitor etc.

    Best of luck. :)

    Thanks for the info, Cjay… and all others

    I was thinking that if we say at the last minute that the house is just too good to do as a company and we want to purchase for ourselves then a commission is a commission and they would be happy with the sale.

    Also, we are already experiencing the difficulty of getting that team together. It’s hard to get good help!!! Plenty of help that just doesn’t seem to making the cut

    Cheers
    Jeff

    #1114053
    Cjay
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    Just a suggestion but you don’t necessarily have to give an indication of who you are representation (even if it is yourself). Less information may put them on the back foot. In that sense, you could be a buyers agent, a company (like you plan to be), an investor etc. Soon as they know you’re not owner occupier, they know it will all be about the bottom line.

    If you have any questions related to the financing side of things, feel free to email me.

    Reno flips in this market is daring to say the least, best of luck to you. :)

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