Business Structuring & Asset Protection

Lawyers who take the time to understand your business

Business Structure

Whether you are setting up a new business or re-structuring an existing one, it is essential that you choose a structure that addresses your needs and protects your interests. The right structure can help you to effectively maintain control of your business, limit liability, protect your assets, minimise tax and provide privacy.

Aditum Lawyers have the knowledge and expertise to ensure that the foundations of your business are solid. Our highly experienced Sydney business lawyers can advise you on how to effectively protect your personal assets from creditors, structure ownership of your business to maintain control and optimise your structure for tax purposes, as well as an extensive range of general commercial and corporate law matters related to your business’ operations.

Restructure and Asset Protection

It is common for a business to reach a point where a restructure is required and the reasons for this can be many and varied. We know how hard you have worked to build your business so we want to ensure you are protected in every way possible and not paying unnecessary tax.

Aditum Lawyers are highly experienced in business structure and asset protection and can assist you with company administration or liquidation, equity restructuring, debt refinancing, asset disposal, offshore trusts and companies, tax minimisation strategies and advanced asset protection.

This area of law can be highly complex and have severe consequences if not done correctly. Call us today for a confidential discussion on (02) 8593 8326 or submit an online enquiry to get started.

What business structure should you use?

Understanding the types of business structures available before starting a new business is crucial. Aditum Lawyers will help you understand the different structures that are suitable for your business, and how each one will effect your business and personal circumstances.

The four most common business structures in Australia are:

  • Sole trader
    As a sole trader, you operate the business as an individual and are responsible for the business and its liabilities. This may be the cheapest and easiest structure to set up and manage, it does not provide any protection against liability, tax benefits or flexibility for growth.
  • Partnership
    A partnership consists of between 2 and 50 people or entities that conduct a business together,  usually under a partnership agreement. The partnership agreement will govern the manner in which the partnership operates and responsibilities, profit and liabilities are usually shared among the partners. There are 3 main types of partnership structures:
    • General Partnership – where all partners are equally liable, and their liability is unlimited in respect of their debts and obligations;
    • Limited Partnership – where the liability of the general partners is be limited to the amount of their contribution to the partnership; and
    • Incorporated Limited Partnership – where partners can have limited liability provided there is at least one general partner with unlimited liability.
  • Company
    A company is a separate legal entity that has the same rights as a natural person. It can enter into agreements, buy and sell property and pays a reduced rate of tax. The members of company are not personally liable for the company’s debts and obligations. Companies are regulated by the Corporations Act 2001 as well as a constitution or replaceable rules, while the relationship of its members or shareholders is governed by a shareholders agreement.
  • Trust
    A Trust is a structure where the trustee holds property or income for the benefit of its beneficiaries. Trust structures can be highly nuanced and add an extra level of complexity to your structure. However, Trusts can be effective instruments for asset protection and minimisation of personal liability. The trustee is responsible for managing the Trust, as well as making distributions to the beneficiaries.

Offshore companies, trusts & accounts

There are many reasons why you may require an offshore structure.  You may be expanding your business operations internationally, seeking to minimise (but not avoid) your tax obligations or you might desire an increased level of privacy and asset protection. 

The use of offshore structures and instruments can offer many great commercial benefits, however, this area of law is highly complex and requires a detailed knowledge of commercial law across multiple jurisdictions. 

Aditum Lawyers can help you decide whether these measures are appropriate for your situation and assist by creating these structures in a safe and compliant way.

Business Structuring & Asset Protection FAQs

Although a company is its own legal entity, it is owned by its members or shareholders. The relationship between these shareholders is governed by the Corporations Act 2001 and the shareholders agreement. 

A shareholders agreement may contain clauses that could effect your control of the business and even your rights to retain shares. These might include tag-along and drag-along clauses, default provisions, share dilution, share classes, appointment of directors and  many more.

If you are thinking of setting up a company and want to ensure that your interests are protected, Aditum Lawyers can draft, negotiate and review your shareholders agreement and protect your interests.

There is a great deal of discretion with regards to the manner in which you structure and conduct your business and the options available can result in a lower tax liability. This is known as tax avoidance or tax minimisation.

Tax evasion, however, is a criminal offence and can result in severe financial penalties and criminal prosecution. The most common examples of tax evasion include deliberately under-reporting income, keeping multiple sets of books and making false entries, claiming false deductions, claiming personal expenses as a business expense, concealing assets or income and engaging in sham transactions.

Given the complexity of taxation law and the severe consequences, it is necessary to obtain professional advice on these matters. 

Aditum Lawyers can assist you in creating a structure that minimises your tax obligations in a safe and compliant manner. If you would like advice on optimising your structure for tax purposes or are concerned about potential tax evasion issues, contact us immediately for a confidential discussion. 

A company is its own legal entity and as such it can sue and be sued. If the company does not have enough capital to meet its obligations then the company will be wound up.

As a shareholder, you will not be liable for the debts and obligations of the company, including those enforced through the courts.

There are some circumstances where directors of the company can be held personally liable and this is discussed in greater detail on our Directors Duties page.

There are many different ways to raise capital for your business. The three most common are:

Debt capital – this is essentially raising capital by borrowing money.
Equity capital – this requires you to sell part of your business in return for the capital used to grow the business. Equity capital allows you to raise more capital than you might be able to through a loan or security. 
Other forms – crowd sourced funding is a new and popular way to raise capital through online intermediaries whereby online investors raise capital your business needs for a very, very small part of your business.

Our commercial lawyers can assist you with working out which form of capital raise will work best for you and your business.

There are different types of trusts available for both businesses and individuals ranging from unit trusts (assets held on trust for the beneficiaries/unit holders), testamentary trusts (associated with wills), and discretionary trusts (often used by families).

Trusts are also a commonly used business structure, whereby the trustee holds property or income for the benefit of its beneficiaries. This type of trust can often be tricky to set up and so it is important to advice from a commercial lawyer before doing so.