Last updated: 5 July 2020

When people are buying or starting a business, we hear all kinds of questions, but very few about structure, which we believe is one of the most important.  Before you even start planning to go into a business venture, the first thing to determine is what the best structure is. This decision should take into consideration the type of business, the type of product or service, the sphere of operations, how many owners are involved and their personal situation.

We see the structure as the roots of a young tree if the intention is for the tree to grow strong, healthy for the long term its roots need to be good strong foundations.  As your business grows your structure should be robust and flexible enough to meet all future opportunities and challenges.

Here are our top 5 reasons for getting your business structure right as early as possible:

1. Risk: we all know that that business risk and related issues are increases every year when entering into a new venture it is important to protect your personal assets. We even have a real live "war story" on how a good structure can protect you - The Protection of Structure.
2. Exit: one of the most important considerations is what the expected succession or exit plan is, this includes both the mechanics of the transfer as well as the financial and tax considerations.  There are 3 taxes that may apply in any purchase or sale of business - read more here.
3. Income: getting the mechanism right up front as to how income will be split for both accounting, taxation and in actual cash terms and how long it will be before a profit is expected.
4. Growth: in many cases, the opportunity to change the structure later are limited by several factors. We have seen many cases where this restricts the development of the business.
5. Focus: dealing with a bad structure later can create a financial and compliance burden and may even take the focus away from the business to counteract the issues.

We offer a business structure review service and have had many clients comment on how beneficial this has been to them.  It is a fixed price no-obligation opportunity to get an independent summary of your current situation, along with recommendations.  Click here for more information.