Partnership Structuring

[markosolo]

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Hi All,

A work acquaintance and I have decided after some time to get into business together. I have had my own business before(Sole Trader) and partnership before(plain partnership I believe).

The plan this time is to do things properly however, so I need to know who I need to contact regarding the proper business structure setup as we are looking to setup PTY LTD, etc. I also work on some other ventures too, so it would be nice for me to have my own PTY LTD, which owns my share of the partnership corporation instead(Does that make sense?).

So in short, who would you recommend I speak to? Accountant? or Lawyers? I already have a somewhat boilerplate partnership agreement from the one that was drawn up by the lawyers from my last partnership – could I use that and just see an accountant regarding the corporation setup?

Also, I’m not against shameless plugs, so if anyone on here can help out with this kind of thing, let me know.

Cheers,

Mark

[AgentMail]

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Hi Mark,

I would say the best start would be to meet with your accountant. If you don’t already have one, I am happy to recommend Beth at InterAccounts http://www.interaccounts.com.au who has just started doing our taxes. She is also a member on here so you could message her.

By the sounds of things, you’d be looking at a trust setup plus establishing a pty ltd for the business (but I am not an accountant, so they would advise exactly what you need)

Best of luck with your startup

[JacquiPryor]

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I second that – definitely accountant to begin with. Most accountants that practice in connection with businesses (rather than only individuals) should be able to advise on best structure for you personally, and your partnership.

I reckon you should be able to modify your previous partnership agreement (so long as, of course, it is amended to still comply with law and generally suit this new venture) – and just see accountant for company set up. I have received a few quotes in the past – around $900 – $1100 for Pty Ltd set up, a bit higher for trust variations.

In the mean time, you might find some preliminary answers at http://www.asic.gov.au as to company registration – who can own shares, what kind of shares and generally who can operate the company etc.

All the best,

[AveSol]

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Hi Mark,

At my firm, Avenue Solutions, we do legal, accounting and taxation work for micro and small businesses. We can certainly help with structuring advice, and then undertake all the work necessary to establish the desired structure (including company and trust formation).

We can also review existing agreements to ensure that they are ok, and this should save on some costs.

By way of general comment, it is possible to have a company, in which you own all the shares, enter into a general law partnership either with another corporate entity or an individual. As to whether that is a good structure, I’m not so sure, particularly if you want to engage in other non-partnership activities via the corporate entity. So you should certainly take some advice on that. As you are no doubt aware, it will be necessary to have regard to the type of business proposed, your short/medium intentions with respect to that business, your personal asset and income position, likely profit / loss scenarios, income needs….and so the list goes on.

Link to my firm is below, where you can find pricing information and contact details. No doubt, other good people to be found on this site, too.

Best of luck with it.

Richard

[Author]

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