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New & Need advice on changing structure of Trust

Discussion in 'Introductions' started by Tan68, 14th Nov, 2014.

  1. Tan68

    Tan68 Member

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    Hi everyone
    Need some help with advice on process and correct structure.
    Currently have NAME ATF ABC TRUST T/A BUSINESS
    Wanting to run 3 other businesses off TRUST as T/A as a Group so
    1. Would it be best to transfer NAME ATF to PTY LTD ATF ABC TRUST T/A then all 3 businesses?
    2. What and how hard is it to change NAME ATF to PTY LTD ATF - is this a new trust deed?
    3. Do each of the T/A need their own ABN or is it just the PTY LTD ATF or is it the ABC TRUST or both?
    Probably basic questions. Apologies. I have searched previous forums but none to really answer these particular questions that I can see.
    Thanks
     
  2. Terryw

    Terryw Well-Known Member

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    I can't understand what you are asking.

    You have a company operting as a trustee which is running a business?
    You want this to run 3 separate busnesses?
     
  3. Tan68

    Tan68 Member

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    Clarification of New & Need advice

    Hi
    Yes we currently have an individual's name as Trustee for a Trust trading as a business.
    Now looking to run 3 businesses off the Trust but wanting to confirm that the best option is to remove the individual as Trustee and replace with a Pty Ltd to ensure protection?!
    1. Does this mean a new Trust Deed and ABN for the Pty Ltd and same ABN/ACN for the Trust or is there a simple transfer of Trustee?
    2. Is there a need for ABN's for all the Trading As businesses or do we just use the Trust ABN? The banks are wanting ABNs but the Accountant has been unclear in responding to any of the above.

    Sorry for not explaining clearly.
     
  4. Terryw

    Terryw Well-Known Member

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    If there is only 1 trust then there can only be one trust deed. However the trustee may want to act for 3 different trusts. It is generally not a good idea to run multiple businesses through one entity as all will be at risk.

    If an individual is trustee then that person's personal assets are at risk if the trust is sued. If a company were trustee then liability is generally limited to the assets of the company and the trust. Changing trustees can limit future claims, but not past. Check on the stamp duty implications of changing trustee - if any. Change of trustee = change of title to all property - such as bank accounts, shares, leases etc.

    The trust only needs one ABN. I am not sure if a person can get multiple ABNs.
     
  5. Tan68

    Tan68 Member

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    Thanks TerryW
    So it is advisable to make a Pty Ltd the Trustee for the Trust. Can this be done when there is only one Trustee and/or only one Director of the Pty Ltd?
    Would the Pty Ltd then need an ABN?
    The businesses would run as T/A off the Trust using the Trust ABN

    You are being most helpful and prompt with your responses. Thanks so much. T'
     
  6. Terryw

    Terryw Well-Known Member

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    A trading trust should probably have a company as trustee for asset protection puposes. A trust can have one trustee and a company can have 1 director.

    A entity can only trade under a different name if it has registered that name otherwise it would trade under is own legal name = xx pty ltd for example.

    no need for a company ABN if it will be acting as trustee.



    .
     
  7. Tan68

    Tan68 Member

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    That's great. Thanks. Just looking at the duty charges now but as there are no major assets so no investments or property owned by the Trust at this point there should be limited costs. Everything is in its infancy at this stage. Even the business currently running has only been doing so for 15 months.

    You have been most helpful.
    Thanks again
     
  8. Tan68

    Tan68 Member

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    Hi TerryW
    Since you have helped me so much this far. Can you tell me how realistic and/or easy it is to replace the existing Individual Trustee with the Pty Ltd Trustee doing it ourselves rather than through a Lawyer/Accountant as ours has quoted $3K to do so.
    I am reading over the deed to see how it dictates the change to be made.
     
  9. Terryw

    Terryw Well-Known Member

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    I just quoted someone similar price. Legal advice needed.

    You need to
    work out if the trust allows a change of trustee
    who has the power
    how the power is exercised
    consider the structure of the new company, shareholders, directors, constitution etc
    do the relevant paperwork
    work out if stamp duty would be payable and how much
    apply for finance in the new trustee name
    discharge the mortgage on the property
    attend settlement
    new mortgage on property
    convey any property from one owner to another,
    advise the relevant councils, OSR etc.
     
  10. Tan68

    Tan68 Member

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    And that is why I ask as there is no property or debt. possibly phone contracts and similar. I have heard the mention of a self managing superannuation fund but I am not sure of ownership of that.
    Without the complexity of assets like buildings/homes etc or debt would it be easier enough and does that then negate stamp duty payments?
     
  11. Terryw

    Terryw Well-Known Member

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    yes much easier