Gus and Rebecca started their business 3 years ago as a sole trader and had successfully grown it to over $2 million in gross income per year. A lot of small businesses start off as a sole traders. It’s easy to set up, cheap to run and requires less ongoing compliance.

Why was the tax structure ineffective for them? A sole trader structure has some drawbacks, particularly for Gus who was now turning over a substantial income and had multiple investments outside of the business. Gus and Rebecca had no asset protection and were taxed on 100% of the profits.

We transitioned them from a sole trader business to a company structure. We also set up a family trust to buy his business premises. They now have a clear separation between their business, investment assets and personal assets. This gives them peace of mind that they their hard-earned assets are protected as much as they can be from potential business risks.

Restructuring of a business involves careful planning and consideration due to stamp duty, capital gains tax, business licensing and administration requirements. We were able to provide Gus and Rebecca with the right advice and a transition plan to minimise disruption to their business and finances.