Frequently Asked Questions

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Several weeks, allow time.

No, however if there has been over 3 years since the time of passing you will require an affidavit is explaining the delay.

If there is house of land held in the deceased’s name only, a Grant of Probate is required to sell or transfer the property.

Where a will maker has failed to appoint an executor, an administrator is a appointed by the court and is in charge of administering the deceased’s estate.

An executor can be a person or group of people named in a will in charge of administering the deceased’s estate.

Letters of Administrations is a legal document used where the deceased has not left a will, this document is used to legally administer the deceased’s estate.

You need a will to obtain a Grant of Probate. If there is no Will you need to apply for a Grant of Letters of Administration.

The estate of a deceased person can only be acted upon where probate is granted. Probate is a legal document which recognises a will as valid and allows said wishes to be acted upon.

A trust is settled by way of deed but is not actually a legal entity.  Accordingly, it needs a trustee (either a person or trustee company) to act on its behalf.  Establishing the trustee company is a separate process to settling the trust and is an optional step.

No, the typical clauses include the main beneficiaries (normally husband and wife) and include parents, children, grandchildren, etc. as potential beneficiaries.  Keep in mind that the trustee always controls who actually receives a distribution and therefore the wider the better generally.

A corporate trustee is used for asset protection and takes the place of an individual trustee who may be liable when acting as trustee.

You do not need to register the trust with ASIC. However, if the trustee is a company it must be registered with ASIC and if the trust carries on business under a name other than its own name, the name must be registered as a business name with ASIC.

Separately, you will need to pay stamp duty to set-up the trust depending on the State.

A trust is an obligation imposed on a person – a trustee – to hold property or assets (e.g. business assets) for the benefit of others. These others are known as beneficiaries.

Setting up a trust requires a formal trust deed prepared by a lawyer.

If you operate your business as a trust, the trustee is legally responsible for its operations. A trustee of a trust can be a company, providing some asset protection.

Generally, the R&D tax incentive allows a small company to claim a 45% refundable tax offset for eligible activities.  The incentive is quite concessional, compared to the value of a standard deduction of 30%.

A couple of the key requirements:

• Total deductions relating to the activity for a year must be at least $20,000;
• You must register with AusIndustry within 10 months after the close of an income year; and
• You must be undertaking “Core R&D Activities” (definition below).

Core R&D activities are experimental activities:

• whose outcome cannot be known or determined in advance on the basis of current knowledge, information or experience, but can only be determined by applying a systematic progression of work that
  • is based on principles of established science; and
  • proceeds from hypothesis to experiment, observation and evaluation, and leads to logical conclusions
• that are conducted for the purpose of generating new knowledge (including about creating new knowledge or improved materials, products, devices, processes or services).

Income tax paid by a Company can be used to frank a dividend to shareholders – whereby the shareholders effectively get the benefit of the 30% paid, not employees who receive a wage.

The Company obtains a tax deduction for wages paid, but has to withhold income tax on wages at the employees effective tax rates, notwithstanding any income tax paid by the company on profits.

Generally speaking, other than the one-off start-up costs of registration (approx $500 – $1,000), not much more.

Annual ASIC cost is around $245, tax compliance and financial account preparation won’t cost you much more than what you are already paying for a business tax return as a sole trader, the only thing that changes in that regard (which may increase the cost marginally) is the actual tax return which is prepared.

As a sole trader, you can use your same individual TFN.

An ACN is only used by Companies.

You will have to register for an ABN if you do not already have one personally.

Unless you establish the business in a separate legal entity your income from the business will form part of your individual taxable income (i.e. if your marginal rate is 40% you will taxed @ 40% for this extra income).

As a sole trader, you can only sell a business by selling the assets/IP/customer lists/etc. If you sell everything needed to continue to operate the business it will still be a sale of a going-concern.

As a company you have the choice to sell the business + assets or the shares in the company, which can sometimes make it easier to find a purchaser or obtain a higher price.

The difficulty with selling assets is that any contracts (leases, supplier agreements, etc.) will likely need consent to transfer to a different party, this mess is avoided where you are selling a Company.

If limited liability is important to you, the sole trader/partnership structures will not provide the protection that a company will.

As a sole trader/partnership, your personal assets are at risk to the business creditors.

Your rights will largely depend on the form of the share sale and purchase agreement. You normally see a contractual right to be provided with business records dating back a particular point in time.

Enforcing the right from a practical perspective may require engaging a lawyer such as us to review the contract and correspond with the former owner.

Generally speaking, other than the one-off start-up costs of registration (approx $500 – $1,000), not much more.

Annual ASIC cost is around $245, tax compliance and financial account preparation won’t cost you much more than what you are already paying for a business tax return as a sole trader, the only thing that changes in that regard (which may increase the cost marginally) is the actual tax return which is prepared.

The answer is no, you will need a new ABN. When you incorporate the company you will be provided with an ACN.

If you are running a business with others, partnership/shareholder agreements will save you a lot of headaches and tend to deal with: exit scenarios, who is obliged to do what (particularly if you are taking different roles) and what happens when a partner does not contribute, becomes ill, passes way.

From experience, dealing with these matters after the fact is very difficult and best avoided by engaging a lawyer to draft a shareholder/partnership agreement.