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Family Trust for Business

Discussion in 'Accounting, Tax & Legal' started by Triu, 3rd May, 2007.

  1. Triu

    Triu Well-Known Member

    Joined:
    1st Sep, 2006
    Posts:
    161
    Location:
    WA
    Hi can anyone please advise what type of trust i should set up for a Family run Business.

    I was thinking of a Trading Trust is that correct? I want to protect my PPOR and 1 IP.

    Should i set up the Trust before i purchase the business also?

    Thanks for the advice
     
  2. Saskatoon

    Saskatoon Well-Known Member

    Joined:
    17th Oct, 2005
    Posts:
    67
    Location:
    Aldgate, SA
    Hi Triu,
    you will need specific advice from a professional, but a common structure is to set up a discretionary trust which then establishes a company to run the business. You would set up a suitable structure before buying the business.
    Do lots of research on the topic before committing!
     
  3. Nigel Ward

    Nigel Ward Team InvestEd

    Joined:
    10th Jun, 2005
    Posts:
    1,172
    Saskatoon is correct. Get some good advice.

    You'll need to think about structuring in a way that:

    a) permits your financing both debt and equity
    b) provides asset protection
    c) gives you some flexibility around streaming income
    d) takes advantage of the small business CGT exemptions.

    Cheers
    N.
     
  4. NickM

    NickM Co-founder Staff Member

    Joined:
    20th Jun, 2005
    Posts:
    321
    Location:
    Sydney
    Triu
    many factors must be considered
    ie the type of business
    your personal position
    will you keep or sell the business - short or long term
    do you have family to distribute to
    potential for a future bus partner

    the guys are right - you have to seek advice
    NickM