Professional Management Matters
IT MIGHT BE TIME TO RESTRUCTURE The Federal Government recognises that only around 26 per cent of small businesses are currently operated by companies. Small businesses need to operate in a structure that suits their operations and takes into account the personal circumstances of the owners. Sometimes this may in fact mean moving from a sole trader or partnership to a trust or company structure. The reasons for restructuring a business in this manner can include tax effectiveness, asset protection, business continuity, access to working capital, or bringing additional owners into the business. However, be warned, there can be a hidden cost in the form of capital gains tax (CGT) when restructuring. A capital gain is made when the value of the business you are restructuring is
MICHAEL McMANUS CFO Outsource
worth more at the time of restructuring than the cost of purchasing or establishing the business. Current legislation provides CGT relief for sole traders seeking to incorporate. However businesses using or seeking to use alternative structures were still subject to potential CGT liability. Thankfully, the government is providing small business with some relief. The Government has confirmed that it will allow small businesses with an aggregated annual turnover of less than $2m to change legal structure without attracting a CGT liability at that point. These new measures will apply from 1 July 2016. If you are growing, changing, thinking of restructuring or remodeling, this gives you a fantastic opportunity to do so with CGT relief.
ABOUT THE AUTHOR Michael is the managing director of CFO Outsource, a new business offering outsourced Chief Financial Officer services to growing businesses. CPA and MBA qualified, Michael draws on his experience working as a CFO in the corporate world to bring real world financial management expertise to the Sunshine Coast’s small and medium businesses.
Are you thinking about restructuring? At CFO Outsource we deliver real solutions for your business by: Providing accurate, reliable and timely financial information Showing you how to take control and access cash flow Driving growth and earnings predictability Implementing best practice financial management Reducing your finance and accounting staff worries
We want to be part of your finance and strategy solution! If you’re thinking about growing, restructuring or just not sure how outsourcing might work in your business, we can step you through your options. Call today for an obligation free consultation.
Tamara Cross: 0413 774 511 Michael McManus: 0424 290 968 info@cfooutsource.com.au K1 Building 17/16 Innovation Parkway, Birtinya www.cfooutsource.com.au
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