Structuring Your Business: A Risk-Based Approach.

When it comes to structuring a business, there’s no one-size-fits-all solution. The right structure depends on your unique circumstances, goals, and risk profile. While many business owners first think about tax when considering structure, it’s important to take a broader, risk-based view.

There are four key areas that should guide structuring decisions:

1. Risk – Protecting your personal and business assets from potential claims.

2. Tax – Ensuring the structure is tax-efficient while meeting compliance requirements.

3. Succession – Planning for ownership transition and continuity of the business.

4. Cost and Compliance – Balancing ongoing costs with the complexity of managing the structure.

Other important considerations include Capital Gains Tax (CGT), the complexity of the structure and the flexibility of distributions.

Our Approach - what to expect when you come to see us.

Your business

The first step in our process is to gain an understanding of your business and its goals. We take time to understand the nature of your operations, levels of profitability, and how profits are intended to be used - whether they will be distributed, retained or reinvested for future growth.

We also consider the composition of your family group, as this can influence ownership and distribution strategies, as well as your broader growth aspirations and succession plans. In addition, we review your current asset position, turnover and employee arrangements to ensure the chosen structure provides appropriate protection.

Different structures

For the next part of our process, we use a simple whiteboard matrix to visually compare the different structural options available. Within this, we assess each option across several critical areas, including asset protection, tax, flexibility of distributions, cost, and succession planning. We find this visual approach gives our clients a clear, side-by-side view of how each structure performs, helping you easily understand the key differences.

Structure advise

We then present and discuss the structures that are most appropriate for your business, highlighting their comparative advantages in terms of risk management and asset protection. A key focus of this stage is ensuring that personal assets, including the family home, are protected and not exposed to potential business claims.

To make these considerations clear, we again use a visual approach, illustrating just how asset protection can be achieved through the relevant structure. This ensures that our clients understand why we are suggesting the particular structure and the steps that will need to be taken to achieve this desired asset protection.

If you are unsure how to structure your business or family group, come see us.

Patrick Mulqueen.