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Why should I consider changing my business structure?

  • Wednesday, May 17, 2017
  • Anthony Berkman

The business structure implemented when you started your business may no longer be suitable.

Like many small business owners, you may have started your business as a sole trader or partnership - using a simple and cost effective structure to get your business off the ground. While you are busy in the day to day operations and building your business for the future, you may not have stopped to discuss the goals for your business with your accountant - and you could be missing out. A review of your business and structure can result in substantial improvements. The beginning of a new financial year is the ideal time to reconsider your business structure.

There are many reasons why you might consider restructuring your business, but it’s crucial to seek professional advice. Restructuring can be complex and involve technical issues such as funding requirements, administration costs and tax implications. But the most important aspect of restructuring is understanding your goals for the future of the business.

At Berkmans we specialise in helping small business owners make the most of their businesses. By working closely with you, we are able to gain a thorough knowledge of your business goals and needs for the future, whether they be your wish to grow the business, bring in a partner, prepare your business for sale, or create greater efficiencies. Through open communication and an honest approach, we can help you identify the most appropriate structure.

Common reasons for restructuring a business include:

#1 Succession planning
Some structures lend themselves to the smooth and efficient business succession.

#2 Business flexibility
Certain structures allow more flexibility when it comes to business operations. Issues such as financing, ease of entry and exit, flexibility for growing your business, ease of borrowing and governance of legislation and regulations should be considered.

#3 Asset protection/separating assets from a trading entity
Some business structures separate your assets from business activities. which are held as a distinct entity. These arrangements may offer greater asset protection and less exposure to creditors.

Other structures may be more appropriate for non-family owned businesses or those with unrelated business partners. These structures may need to address separation of assets from your trading entity and other governance requirements.

#4 Tax efficiencies
Certain business structures may offer the capabilities to split income, take advantage of tax concessions for certain activities and reduce your tax liability through paying company tax rates.

#5 Structuring for family businesses
Some structures may offer more flexible arrangements for family businesses such as being able to vary distributions or more easily transfer assets or control of the business.

There are advantages and disadvantages associated with different business structures, as well as administration and tax implications which need to be taken into account, so it’s important to seek advice to understand which options are most appropriate for your business and personal circumstances. We recommend 1 July …

If you would like to find out more about restructuring your business or have any other concerns about your small business, I encourage you to take advantage of our FREE CONSULTATION. Contact us on or call 02 4351 2622.

At Berkmans we apply 40 years’ experience and we specialise in helping small business owners on the Central Coast to save tax, enhance profitability and enjoy the prosperity you deserve.

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