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

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  • #989252
    Lelo
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    I have just purchsed a sheep station with my partner and his parents we all own 25% of the property My father has borrowed $115,000 to help us out to purchase stock. We will be repaying his loan. How can we structure the company to incorporate dad’s contribution.

    #1171235
    NM Books
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    Hi Lelo
    What an adventure you’re about to begin!
    Before giving any advice, more information would need to be given. Perhaps not the kind of information that you like on a public forum. There’s options like trusts and companies that come to mind.
    If you would like to discuss further, PM me or email.

    #1171236
    ShellysBookkeeping
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    hi lelo, without knowing how you have structured the company, the loan can be recorded in the books similar to any other loan. You need to speak with an accountant about the best company structure that suits. Good luck with your sheep station.
    Shelly

    http://Www.ShellysBookkeeping.com.au
    Shelly@shellysbookkeeping

    #1171237
    MissSassy
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    You need to discuss this with an accountant that can take into account the entire circumstance including business and personal circumstances.

    It is not really ideal for the forum here, there are plenty of accountants in the directory and plenty that we can all recommend.

    #1171238
    Anonymous
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    Hi Lelo,

    How exciting for you all :)

    As others have mentioned, you’ll probably need to seek advice on this pertaining to your individual circumstances. If you don’t already have an accountant to help you with this, let us know on this thread and I’m sure you’ll receive more recommendations to check out in addition to those that have already been made.

    In the meantime, best of luck to you – I hope you love your new home and business.

    Jayne

    #1171239
    PRO
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    FS Concierge, post: 198816 wrote:
    Hi Lelo,

    How exciting for you all :)

    As others have mentioned, you’ll probably need to seek advice on this pertaining to your individual circumstances. If you don’t already have an accountant to help you with this, let us know on this thread and I’m sure you’ll receive more recommendations to check out in addition to those that have already been made.

    In the meantime, best of luck to you – I hope you love your new home and business.

    Jayne

    Hi Lelo

    The loan could be completed with a second mortgage over the property. Lots of protection for him that way.

    #1171240
    Carl Desacola
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    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

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