4 principles - choosing the best business structure for you!

Strategic Business Structuring & Succession Planning for Long-Term Success

Whether you're building a start-up or managing a multi-generational business, the right legal and ownership structure is critical. Our clients often come to us—regardless of where they are on their journey—seeking clarity on business structuring and succession planning to safeguard their assets, reduce tax, and ensure smooth transitions.

Why Business Structuring Matters

Far too often, poor structuring or lack of advice early on leads to costly problems later. We've seen business owners forced into reactive, rushed decisions at times of exit, during disputes, or in response to family or personal changes. With proper planning, these moments can instead become opportunities.

Our role is to:

• Understand the business, its operating environment, and the financial and personal goals of the owners

• Review existing legal and ownership structures—or help design new ones from scratch

• Evaluate structure effectiveness in five key areas:

  • Asset protection

  • Income and capital gains tax minimisation

  • Administrative efficiency

  • Retirement planning

  • Estate and succession planning

For Existing Businesses:

We assess legacy entities that may no longer be relevant. If it’s commercially and tax-effective to do so, we may recommend winding up outdated entities to streamline your affairs—always with full consideration of CGT, stamp duty, and income tax implications.

What Makes a Good Structure?

We believe that, in a perfect world without legal or tax risk, everyone could operate as a sole trader or a simple partnership. But the real world demands more robust planning.

A well-designed structure needs to account for:

• Asset protection: The riskier the business, the more critical this becomes. If your enterprise has exposure to potential liabilities—like workplace safety, financial risks, or uninsured events—you’ll want to separate ownership of assets from trading operations.

• Tax flexibility: Structuring to allow income splitting among family members or retaining profits in a lower-tax environment (e.g., companies or discretionary trusts) can significantly reduce your tax burden over time.

Legal Structures in Practice

Trading activities are often best housed within companies or trusts, while wealth assets—like business property or intellectual property—should ideally sit in separate entities. This not only protects the assets but provides flexibility in succession or sale events.

For example, a typical structure might involve:

• A discretionary trust owning intellectual property or business premises

• A company acting as the trading entity

• A holding trust or company to retain excess profits for reinvestment or wealth transfer

Each of these entities has its role to play in protecting value and enabling flexibility.

Four Guiding Principles

1. Tailor structures to individual needs: Every business and family is different. We build structures that match your personal and commercial priorities.

2. Separate trading operations from asset ownership: To reduce risk exposure, we recommend separating income-generating activities from wealth assets.

3. Extract surplus profits tax-effectively: Excess profits should be transferred to safer, more tax-effective environments—such as discretionary trusts or superannuation—after retaining sufficient capital for reinvestment.

4. Differentiate ownership and employment: Where multiple parties are involved — some active in the business, others passive—clear policies and structures should separate remuneration from profit entitlement. This ensures fair outcomes, manages conflict, and supports accurate business valuation.

Your Next Step

Our goal is to build structures that not only work today but stand the test of time. If you want peace of mind that your business and personal wealth are protected, and that your exit or succession won’t become a burden, we’re here to help and look forward to hearing from you.

📅 Book a strategy session with us today and gain clarity on your business future ➡ Book Here

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📞 Contact our Office to speak with one of our Friendly Advisers — (02) 8937 3699

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Disclaimer: The information provided in this video is intended for general informational and educational purposes only. It does not constitute financial, taxation, legal, or other professional advice. You should not rely on this content as a substitute for tailored advice specific to your personal or business circumstances.

While every effort has been made to ensure the accuracy of the information presented, no guarantee is given regarding its completeness, correctness, or timeliness. The creator of this content, along with any associated individuals or entities, expressly disclaims any and all liability for loss or damage that may result from reliance on this information.

Before making any financial, investment, or business decisions, it is strongly recommended that you consult a qualified professional who understands your unique situation and goals.