1. What are the common legal structures available for conducting a business?
2. What are the advantages and disadvantages of conducting business as a sole trader?
3. What are the advantages and disadvantages of conducting a business through a partnership?
4. What are the advantages and disadvantages of conducting business through a company?
6. What is the value of my trading stock?
7. Can I offset capital losses against trading income?
Capital losses cannot be offset against trading losses. They can only be offset against capital gains. Alternatively, if there are no corresponding capital gains then they can be carried forward indefinitely.
8. What expenses can I claim against my rental property income?
9. The Business Planning Process – Is It Important For My Business?
A business plan is a thorough overview of where a business is now, how it is currently positioned, where it wants to go and how it is going to achieve its goals and ambitions. It is a blueprint of an organisation’s past, present and future. A business plan is crucial to the success of any venture and is an indispensable management tool that can be used in a variety of situations.
Trends and development in your particular operating environment and in the market place.
A summary of external influences and opportunities (such as government export grants).
11. When is my annual review required?
From 1 January 2003 companies are no longer required to complete an annual return. Instead they are required to complete and lodge an annual review and pass a resolution of solvency within 2 months of their anniversary date.
The annual review filing fee is $212 per company. You are able to align the anniversary dates of companies with a common officer. There is a lodgment fee of $33 per company. The annual review form requires a review of the company’s addresses, officers and members.
When reviewing the form please ensure that the member’s details are correct. Any changes must be notified to ASIC within 28 days and late penalty fees will apply. We will notify you of your annual review requirements and request that you attend to them as soon as they are received.
12. When can I deregister a company?
13. How does a company deregister?
Ensure all outstanding charges against the company have been satisfied. You should make sure of this before applying for deregistration.
Complete Form 6010 and include a $33 application fee.
14. What is a solvency resolution?
Positive solvency resolution – this is passed when the directors have reason to believe that the company will be able to pay its debts as and when they occur.
Negative solvency resolution – this is passed when the directors have reason to believe the company will not be able to pay its debts as and when they occur.
Negative solvency resolutions must be lodged with ASIC on a form 485 within 7 days of the resolution.
15. Do I need to have the company’s accounts audited?
ASIC requests the company be audited.
Audit relief is available to large proprietary companies only if the company is “well managed in a sound financial position”. There are minimum requirements to meet this test.
16. How do I set up a Self-Managed Superannuation Fund (SMSF)?
There are a number of trust laws and legislative requirements relating to setting up a self managed superannuation fund (SMSF). If you wish to set up your own fund please contact us for further information.
Obtain a Trust Deed – The first thing you need to do is to have a trust deed. The deed must be dated and properly executed. Content contained in the deed is important in determining the structure and operation of the fund.
Appoint Trustees – All superannuation funds are required to appoint trustees. Trustees are responsible for ensuring the fund is properly managed and that it complies with the Superannuation Industry Supervisory Act and other legal obligations. To be aSMSF all fund members must be appointed as trustees of the fund. A SMSF can not have more than four members. To be a single member fund the trustee of the fund must be a body corporate and the member is one of only two directors of a single member body corporate. A SMSF can also be created if the member is one of only two trustees, of whom one is the member and the other is a relative of the member.
Other Considerations – Trustees should open the fund’s bank account (or other appropriate investments) in the name of the fund. The assets of the fund should be kept separate from any assets owned personally by any of the trustees or from those belonging to a business (where partners in a business set up the SMSF). Trustees need to establish an appropriate investment strategy for the fund. Trustees need to be aware that there are numerous administrative obligations that must be met throughout the life of the fund.
17. What are the benefits of a Self-Managed Superannuation Fund?
The following are some of the advantages of a SMSF.
Setting up a SMSF is not for everyone. People considering a SMSF must familiarise themselves with the requirements and obligations of running a fund. We are able to provide you with basic fact sheets released by the ATO. If you wish to set up your own SMSF please contact us for further information.
18. What kind of investments can I hold in a Superannuation Fund?
Prohibition of loans/financial assistance to members or a member’s relative – Trustees are prohibited from lending money or providing financial assistance from the fund to a member.
Prohibition of Borrowings – SMSFs are prohibited from borrowing money except in some limited circumstances.
19. What is the sole purpose of a Superannuation Fund?
It was previously mentioned that a complying superannuation fund is essentially a regulated superannuation fund that meets the operational standards of SISA. Complying superannuation funds are taxed concessionally (i.e. a complying fund is taxed at a rate of 15% while a non-complying superannuation fund is taxed at 47%). The object of the sole purpose test is to ensure that regulated superannuation funds are maintained for the purpose of providing benefits to fund members upon their retirement or their dependents, in the case of a member’s death.
20. What is the current Medicare levy rate?
The Medicare levy rate is 1.5% of taxable income, subject to certain exclusions and reductions.
21. When does the Medicare levy surcharge apply?
22. What is the current company tax rate?
23. What is the current fringe benefits tax rate?
48.5% of the grossed up taxable value of the fringe benefit.
24. What tax rate applies to the income of a superannuation fund?
25. What is the current superannuation guarantee charge percentage?
26. What are the new payment and reporting rules for superannuation guarantee amounts?
From 1 July 2003 employers will be required to pay superannuation guarantee amounts quarterly, by the 28th day after the end of the relevant quarter. From 1 January 2005 employers will no longer be required by law to report to your employees in writing.