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The Latest On Protecting Assets and Wealth

Litigation is on hype as we analyze the recent trends around the world. Same is the case with concept of protecting assets and wealth. Not many people around the world are completely familiar with the purpose, working and benefits of asset protection by ASIC. The first and foremost point to understand and implement is to incorporate your business as a Private Limited Company. Unlike sole traders/partnerships, Private Limited Company does not have unlimited liability. People have recently understood this point and are taking action in order to protect their assets and wealth for their better future. Many Accountants Sydney will be able to provide an assistance with Trust registrations.

(Watch full set of videos on Youtube)

Asset Protection vs Insurance

Another latest development in this area is the understanding of the difference between Insurance and Asset Protection. People have now started to have a clear idea about the greater benefits of Asset and Wealth Protection. Insurance is limited. Insurance can only cover the major business and personal property but not everything. On the other hand, insurance never pays for litigation. Asset and Wealth Protection is the primary solution for all your wealth related worries. It acts as a safety shield around your assets and wealth. It is the perfect tool when it comes to wealth and asset issues.

Asset Protection Planning Is Essential

Let me briefly explain what Asset Protection Planning is. Consider yourself an entrepreneur who has a dependent family and business registered under your name. What if your employee falls from the stairs at the workplace and decides to sue you for everything that you have? Having Asset Protection Planning can help you in such a situation by allowing you to have 99% chance of winning the case. On the hand, if you don’t have Asset Protection Planning then you are completely vulnerable which could result in loss of business assets, personal property, etc. It is only one scenario, don’t forget that hundreds of scenarios can take place in your daily life.

Latest Facts Revealing The Importance Of Asset & Wealth Protection Planning

•          78% lawsuit defendants around the world never thought it would happen to them

•          On average, it takes from 30 seconds to 1 minute for a new lawsuit to be filed

•          Business owners and self-employed people have 33% of likeliness to defend a lawsuit

•          More than quarter million criminals make living via lawsuits according to FBI

It clearly shows that the world in which we are living is no more safe and harmless. The latest statistics must be an eye opener for those who have spent their entire life while caring for their business and building assets.

 Things You Must Know

The information we are about to reveal is latest, authentic and shocking. Asset Protection Planning is only useful and beneficial if you gain it before someone attempts to file a lawsuit against you. Why is it so? According to the law, criminal charges can be pressed against you if someone has filed a lawsuit for your assets and you make an attempt to transfer the assets. If you transfer the assets while knowing that a lawsuit could be filed against you then, it could be considered as a fraudulent act. Delays in Asset and Wealth Protection Planning can lead to serious consequences. Majority of the people do not know this latest information.

Legal Tax Planning Is The New Trend

Most of the people get to know about Legal Tax Planning when they go for Assets Protection. Recent study has revealed that the taxes all around the globe have increased with the passage of time. In this situation, Legal Tax Planning has played a crucial role while protecting the wealth of millions of people worldwide. Legal Tax Planning is a new trend among the upper tier of self employed professionals having high income. If you haven’t  been involved lately in Assets and Wealth Protection then you won’t have the correct understanding of this concept right away. Legal Tax Planning includes implementation of strategies that help increasing the profit for the company and maximizing income of a self employed person. Both, income tax and corporation tax reduction strategies are advised when you plan to go for Legal Tax Planning.

Asset Protection Planning and Legal Tax Planning are important steps towards protecting wealth. Who should you rely on, an attorney, yourself or a private trust?

Private Trusts Helping You Protect Assets and Wealth

Latest developments in this category reveal that people have fallen in serious trouble by taking the initiative and implementing Asset and Wealth Protection Planning themselves. In several cases, it has led to criminal charges where people could not execute the plan in the right manner. An attorney might be a better option. However, relying on a single attorney to take care of all your assets and wealth is a risky step.

It is the reason people have lately turned to Private Trusts. A Private Trust is a properly planned legal framework which can offer appropriate Asset and Wealth Protection Planning for your business today and in the future. Recent surveys show that people have been able to find positive results by seeking different services from Private Trusts. In the current environment, Private Trusts seem to dominate the market for providing Asset and Wealth Protection solutions.

 Let us share some of the services and benefits provided by a Private Trust:

1.         Asset Protection – Assets no longer remain under your name and they can be protected in this way against any future claims

2.         Tax Planning – By transferring assets under a Private Trust’s name, you get to defer or minimize the income tax, inheritance tax and capital gains tax

3.         Estate Planning – It helps in avoiding succession laws and highly expensive probate formalities

4.         Consolidation of Assets – Your financial reporting and asset management becomes simple when all your assets are transferred in the name of one holding body

5.         Confidentiality – The image of you and your business no more remains vulnerable as all your assets are held by a trustee rather than under you or your beneficiaries’ name.

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Year End Tax Planning Strategies for an Ongoing Business

Year End Tax Planning Strategies for an Ongoing Business

All businesses small and large need to spend time looking at their tax liability. They need to form a tax strategy that can and should be implemented at the beginning of each year, whether you are on a calendar year or a fiscal year. There are changes almost every year in tax laws, credits and options that may be available to you. A little planning and a good strategy can improve your chances of not having that huge tax bill at the end of your year. Waiting till the end of the year to find out what you owe, will leave you no time to correct or reduce your tax liability. Planning ahead and scheduling a good tax strategy will help you have better knowledge of what type of tax liability you may incur during the year. A good accounting program that allows you to do account reconciliations will also make the planning and implementing of a tax strategy easier.

Get Professional Advice

  • If you do not have a CPA Accountant Sydney or Tax advisor there are many choices to you from a local CPA firm to online services, such as e-tax that you can download from Australian Taxation Office website. It is important to have a professional that can advise you. Meet with them quarterly for up to date changes in government tax rulings, deductions and changes to credits. They can also tell you of any tax credits or small business incentives that you may be eligible for. Many credits are over looked by business owners trying to do their own taxes. They can also offer advice as to what you can legally deduct and what you could implement to maximize your deductions. Check with them frequently and let them guide you, it will be time well spent. If you have not had an audit, it could beneficial to you to hire a CPA firm to perform one for you. The information you could gain and the mistakes that could be corrected would more than pay for the expense.

Monthly

  • Review income and expenses. Keeping track of where your gross profit and expenses are will give you time to reduce your taxable income.
  • Check payroll and your payroll liabilities. If you are showing a gross profit that will leave you in a higher tax bracket you might think about bonuses or work incentive awards.
  • Check your purchases for items that can be immediately expensed. Some office equipment, depending on the cost, can be expensed instead of depreciated.
  • Look at your expenses, there are several that are easy to overlook.

Entertainment: Entertaining is a major part of client or customer relations, these expenses are tax deductible and will help growing your customer or client base.

Safety: Work place safety is a large concern for all companies and using safety classes and rewarding workers for achieving a safety milestone is deductible.

Education: Continuing professional education is tax deductible. Seminars, college courses and certifications can all be expensed.

Automotive: If you use your personal vehicle for business these expenses are tax deductible. Check with your tax advisor for the percentages.

  •  Fuel and oil
  • Insurance
  • Lease payments
  • Depreciation  ( owned vehicles)
  • Parking
  • Repair and Maintenance
  • Toll charges
  • Vehicle registration fees

Home Office: If you do any work from home, set up a space to use as your office. There is a portion of your home expenses that can then be deducted. Your tax advisor will be able to tell you the percentages you can use.

  •  Utilities
  • Mortgage
  • Property taxes
  • Repairs and Maintenance
  • Home insurance

Quarterly

  • Review your assets and liabilities. Look at your assets for items that could benefit from or be eligible for accelerated depreciation.
  • Check your inventory amounts for items that could be disposed of due to lack of sales, obsolescence or damage. Most of these can be immediately expensed.
  • Check your cash flow, depending on the amount, you may want to purchase new equipment or expand your business.
  • Either expense off bad debts, or look at the cost of debt collection. There may be times when going ahead and spending the money to try and collect a debt may beneficial, if a customer owes you more than the attorney’s and legal fees you will be able to expense that amount, and collect a percentage of what the customer owes. The remainder of the debt then can be written off as an expense. Accounts receivable should reflect current invoices.
  • Accounts Payable should be reconciled and reflect current invoices only.

Yearly

  • Review your year-end Profit and Loss statements and plan out your next year’s strategy.
  • Consult your tax advisor for any tax deferments you can take.
  • Lodge your annual tax return (city tax accountants will be able to offer expert assistance with the tax return Sydney CBD).

Summary

Being a business owner can be difficult, but it doesn’t have to be impossible, with knowing where to look for answers is a step in the right direction. Having a good business plan for the future is crucial to any business. Implementing good accounting practices will help make that business plan achieve what it was meant to do, improve your business and make sure that your business grows. With growth comes the potential for higher tax brackets and larger tax debt at the end of the year, minimize the tax liability with these simple steps. The most important part of your business plan should be to have a qualified CPA or tax advisor that you can go to for all of your tax questions. A good tax advisor will be able to keep your company up to date on any changes in the tax laws. You want to increase your company’s growth but at the same time reduce your tax liability. Take the time to research your options and there is a help area in the Internal Revenue Service web site that has information available that may answer some of your questions. Knowing where you stand every month and planning ahead will make you a better business owner and will make your company more efficient. Having a tax planning strategy is just good business.

 

 

 

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Choosing the right business structure for your small business

Choosing the right business structure for your small business

What “run small business” means?

A business typically means is an organization or an enterprise established, organized and operated to provide goods and service to the society under the incentive of gain. Usually it is being observed that a widespread business firms are present in capitalist economies. Major portion of those business firms are privately owned and involved in trading goods and services in exchange for money.

The word “Business” drives from the idea of being busy. Business is a set up for the production and distribution of services and goods with view of selling that in the market or for rendering of services for a certain amount or price. Business has two different sort of meaning. Business either indicates a particular firm or organization conducting business in a particular market like “Ford Motor Company” or it may also indicate an entire market sector like “The Automobile Business” or “Agribusiness”.

Depending on the purpose there are three different types of Business organizations. Namely profit oriented, nonprofit and state owned. Business can provide wealth and a high quality of life to the people who are directly or indirectly associated with it. In a deeper meaning, Business increase standard of life of the people living in a society by providing them goods and services and maximizing wealth of the owner or investor by increasing profit margin. Depending on the ownership style of a Business it can be divided into four types that are:

  • Sole Proprietorship Business Structure,
  • Partnership Business Structure,
  • Corporation Business Structure, and
  • Cooperative Business Structure.

Presence of different types of business makes people confused in making the right choice about what types of business he or she will be involved in. In most cases future business owners hesitate to make the most crucial decision about what structure is to be used for setting up a new business. Different forms of business utter many crucial issues like the legal liability, taxation and stakeholder rights etc.  Depending on the size of investment, ownership style and legal aspects of every respective country, people or entrepreneurs make their precious decisions on selecting the right business for small businesses structure.

Deciding on the Appropriate Business for Small Business Structure

Before deciding on selecting the appropriate business structure for your new venture, let’s say, in Sydney (Australia), it is wise to get advise from experienced accountant Sydney CBD. Some few quick facts about small business: small business accommodates more than 65% of employments since 1995. The statistics also clearly points that:

…over 50% of the working population earn their livelihood through working at different small businesses around the globe. With the current flow of the economy it is being observed that around half a million new small businesses get started each month around the globe. Among them around 52% of all the small business are home based.

Generally Small businesses are privately owned organizations. It may be corporations or partnership business or sole trade or proprietorship business as well. Different countries have different set of rules, regulation and taxation criteria for small business. It is really difficult to advice someone which business structure would be appropriate. But it can be determined easily how different business structures will affect due to the way they will be taxed.

The business structure one chooses may affect by four different elements, they are: the amount of tax one is liable to pay, the volume of asset and its protection, amount of ongoing cost and finally the client pattern. Business structure varies depending on geographical locations as well. For example: in Asian sub continent there six different types of business structures are found (Sole Proprietorship, Partnership, Corporation, Limited Liability Company and Cooperative), where in Australia they are limited to four structural types (Sole Trader, Partnership Business, Company Business and last but not least Trust) as per laws of Australian Government. Many countries have fixed the employee number for small business.  For example: As per rules of Australian Fair Work Act 2009, employee number in case of small organizations operating business in Australia is limited to 15 persons, whereas it is limited to 50 in case of European Union. According to Small Business Administration program of USA, small business employee range is fixed to 250 employees. In some cases classification of small business is conducted based on other different elements like sales volume, assets size or amount net profits. Following table shows business size categorization:

Business Size Australia USA EU
Minute/Micro 1-2 1-6 10
Small 15 250 50
Medium 200 500 250
Large 500 1000 1000
Enterprise 500 1000 1000

Some examples of most common small businesses are grocery stores, tea stall, bakery restaurants and professions like lawyers, photographers, CPA accountants etc. Small business owners use different sources for funding like: self financing, equity loan, borrowing from friends and relatives or by forming partnerships. Small businesses face a number of problems due to its size. In most cases it is being observed that small business result in bankruptcy due to absence of supply appropriate amount of capital.

Sole Trader

The easiest way to start any business is referred to sole proprietorship business. Usually the sole proprietor is the person who is self employed at his or her organization. The main advantages of sole proprietorship business are: easy to start, low start up cost, freedom from any regulation, freedom in decision making, advantage on taxation and most attractive one is no profit sharing. Besides all these advantages there are some disadvantages of this structure of business like low capital, less protection in name etc. The worst disadvantage of this structure is the owner is liable for everything associated with the business.

Partnership

Partnership business is usually formed based on an agreement where one or more people agreed on and signed in to combine their resources, expertise and share profit and risk as well. The most vital advantages of this small business structure are supplementary sources of investment capital, low start up cost and restricted regulation. On the other hand the disadvantages are unconstrained liability, lack of continuity and divided authority.

Limited Company

Corporation usually known as limited company is the only small business structure among the three which provides business a legal existence which is referred as legal entity. The benefit that owners of this organization avail from this legal entity, it separates business from the shareholders.  The advantages of corporation business are: limited liability benefit, transferable ownership, constant existence, variety of sources to rise capital, sound and effective management and last, but not least, name protection. On the other hand the disadvantage of corporation business is strong regulation, most expensive and difficult to form comparing to three different types of small business structure and over taxation problem. To decide which business structure to choose in respect of small business in Australia, one has to examine the following issues very carefully or visit www.citytaxaccountants.com.au  for a Free Tax Consultation.

  • The nature of risks and liabilities associated with every business structure.
  • The amount of formalities and expenses has to proceed while establishing any specific business structure.
  • Amount of Income Taxes and the tax benefits that specific organization avail.
  • Opportunity of capital rise and possible criteria of investment needs.

Expert accountant in Sydney CBD will be able to send you into the right direction, register the legal entity for your new business venture, obtain all GST, PAYGW and ABN registrations, assist you with bookkeeping and compliance on ongoing basis.

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