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Business Structure Comparison Chart
The table takes each structure and compares them against each other.
NSW Comparative Table
|Entity||Income Tax||Capital Gains Tax||Land Tax||Asset Protection|
|Sole Trader||No income splitting. Must substantiate business deductions. Losses can be offset against profits.||50% discount (on goodwill with the sale of the business) & main residence exemption & small business concessions available.||Threshold available. Principal residence exemption available.||None except by insurance. Business & non-business assets exposed.|
|Partnership of Individuals||No income splitting. Losses not trapped in partnership, distributed to partners & can be offset against other profits. Can vary profits & losses payable to partners year to year.||Not part of partnership income. Divided between partners in accordance with interest in partnership 50% discount (on goodwill with the sale of the business) & main residence exemption & small business concessions available.||Threshold available. Principal residence exemption available.||None except by insurance and may also be exposed to partners debt due to joint and several liability of partners.|
|Company||30% flat tax. Dividends taxed. Franked dividends pass on tax paid. Restrictions on internal loans. Losses trapped in company. Limited splitting through classes of shares.||No 50% discount. No main residence exemption. Tax free gains to company are taxed without imputation as dividends if distributed. Small business concessions available. Losses trapped in company.||Threshold available. Principal residence exemption not available. Related corporations may be assessed together. Relief possible if 60% of shareholders would suffer serious hardship.||Shareholders protected but value of their shares available to their creditors on bankruptcy. Directors potentially liable if trading while insolvent.|
|Unit Trust||Taxed at unit holders level so depends on structure of unit holders. Good for joint ventures. Losses trapped in trust.||Depends on unit holders. 50% discount applies. No main residence exemption. Small business concessions available. Losses trapped in trust.||Principal residence exemption not available. Special notifications required. Threshold available to trusts created prior to 31/12/05 if fixed beneficiaries of same family group own 95% and combined taxable value less than $1m.||Unit holders protected but value in their units available to their creditors. Trustee indemnified.|
|Discretionary Trust||Maximum ability to split income. Biggest range of recipients. Losses trapped in trust.||50% discount. No main residence exemption. Maximum ability to split. Small business concessions available. Losses trapped in trust.||No threshold||Trustee company. Beneficiaries no value in their potential interest for creditors. Trustee indemnified.|
|Superannuation Fund||No taxor 15% tax||33% discount meaning 10% tax, or no tax.No gearing & cannot own main residence.||Threshold available to complying fund.||Limited borrowings now available but lender has no recourse against fund. Beneficiary’s account protected. No claim by fund against beneficiaries for indemnity.|
Our dedicated team can assist you on how to set your business up as a trust. Complete and submit an express enquiry form or call us on 1300 QUINNS (1300 784 667) or on +61 2 9223 9166 to arrange an appointment.
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