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  • #988049
    katee71
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    Hi

    I am involved in the business of breeding insects and have been steadily working on this plan over the last few months. ( the assistance i received from others on this forum was extremely helpful). I am hoping to do the NEIS training in next few months.

    My question relates to the NEIS training course and business structure. Are there restrictions on setting up a company under the NEIS scheme ? I know that a company structure is much more expensive than a sole trader. However i like the protection that a company would provide and do have plans to grow much bigger. Any advice appreciated…thank you.

    #1165387
    Greg_M
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    From my involvement with NEIS (I did the course … but declined the funding – long story).

    I’m pretty sure the funding goes to the “individual” not a company (a company is a legal entity in it’s own right).

    I did have a company structure in place from a previous business when I did the course, and I was led to believe I could use it as the trading vehicle, but the actual funds wouldn’t go into it.

    One of the reasons I had a company in place was to reduce risk (I worked on contract in a very litigious industry), but that was not included in the business plan … they (NEIS) still required additional insurance regardless … with that in place a lot of the argument for a company structure disappears.

    I saw no real advantage in having a company in the plan I did. But mine was already paid for, and already had bank accounts and TFN ABN set up, so it seemed dumb not use it and save a lot of work.

    Given that’ll be your first year in business, and you’ll need the insurance anyway. I’d be inclined to save the money you’d spend on setting one up, till you know you’re firing.

    If you’re serious about it, talk to good accountant first.

    Good luck with it.

    #1165388
    katee71
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    Thanks for the advice regarding sole trader v company structure and for posting about your NEIS experience. I also think now that i am going to save my money and wait until my business has proved a success in the first year. Just wanted to see what others thought….much appreciated.

    #1165389
    NEIS Team
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    Hi Katee

    Companies are okay for NEIS businesses. You just have to make sure that the structure satisfies the requirement to maintain managerial control. Here are a couple of extracts:

    The job seeker should show to the NEIS provider that:
    • they are in a position to assert managerial control (refer below) over the direction that the NEIS Business will take for the term of the job seeker’s NEIS Participant Agreement

    • Company: A job seeker should provide evidence that they are a director of a company, and that the job seeker(s) in that company collectively hold a controlling interest in the company as directors such that the NEIS job seeker(s):
    o are in a position to make and enforce managerial decisions over the direction that the company will take
    o have an interest in the company that is equal to or greater in percentage than the non-NEIS job seekers as directors of the company.

    Hope this helps.

    Best wishes for your venture.

    — NEIS Team

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