Protection Planning & Corporate Structuring before end of financial year
ASSET PROTECTION PLANNING & CORPORATE STRUCTURING
Whether you are planning to set up a new business or already have an existing business, you must look to see if your current asset protection program covers not only your circumstances but can withstand an attack or challenge from outsiders, such as the Australian Taxation Office or others making claims on your business.
In recent times, there was an attack launched by the Australian Taxation Office against an executive and his corporate structuring claiming his only purpose in setting up the structure was to avoid taxation. Fortunately, for this executive, he was able to show that the dominant purpose of his structuring followed legal advice to protect his family’s assets and tax avoidance was not the reason for the corporate structure.
Taxation is complex and changes constantly, with the Tax Commissioner seeking to challenge and attack most business structures on the basis they were set up by accountants or on their advice to minimise tax.
Directors and business owners must know, understand, and properly maintain their structures and if necessary review those structures to defend and protect their personal and business assets.
With the end of the financial year, it is critical to review the legal position and take steps to ensure that personal protection is effective legally.
ASSET PROTECTION MUST BE DOMINANT PURPOSE
(However, do not neglect financial reports)
Directors and business owners must revise and look at proper meaningful financial reports and cash flows to sustain the business and cannot neglect their duties and obligations as directors; otherwise, there is the real risk of becoming personally liable for the company’s debts and liabilities.
“What you can measure, or plan, you can manage”
Be proactive in planning, not leaving it to the old “reactive-compliance” way, and do not leave it until it is too late.
It is necessary to carry out a strategic analysis of your corporate, business and personal structuring; identifying your current requirements and objectives looking at the major strengths, weaknesses, opportunities, and threats, impacting on your affairs, and then designing the best means to implement the appropriate asset protection program.
NEED MORE INFORMATION
Behan Legal advises and assists clients on these important issues. For an appointment, call 03 9646 0344