In Show 135 – Education – Phase 1 – Conception originally broadcast on Facebook Live on Wednesday 3 October 2018 we explore this interesting topic.
Download the workbook for today’s episode here: 135 – Worksheet
Phase 1: Conception of the Business Legal Lifecycle is so important. If done correctly you will be ready to implement a consistent vision for your business. Your start-up needs to have an end in mind. Starting up with the end in mind can be quite daunting. People don’t usually want to think about the end. It’s better to think about an end. Things will change over time but it’s really important to have a goal to keep focused on. So what is that dream? You should know that your dream is not just about you. Your dream should include everyone that is important in your life.
One of the first things you need to figure out before you launch the business is its structure. Will you be operating as a sole trader or do you need a more complex legal structure? There needs to be some kind of structure that actually owns the business. There are several different kinds of structures you can use including:
A company is a separate legal entity apart from the individuals involved. The company is made up of the director who has the day to day control of the company and the shareholders own the company and are entitled to the profits. The best reason for creating this structure is to ensure that you are not personally liable for the debts and liabilities the business incurs.
This kind of trust is probably the most popular asset protection strategy you can use. The trust is controlled by the trustee who has legal ownership. The appointer decides who will be the trustee. The beneficiaries have beneficial ownership of the trust. The whole point of this structure is to protect individuals and the trusts assets.
Similar to a discretionary trust in that it also is controlled by a trustee. The difference is that there is also includes unit holders. Those unitholders are the actual owners of the trusts assets. It gives you the tax flexibility of a trust while maintaining control of the business. Many of the tax advantages of these kinds of trusts are no longer in effect but they are still useful in many contexts – especially in property development.
Partnerships are two entities or two individuals who come together. You shouldn’t just use a partnership straight away because of liability issues.
Remember that you can’t do this alone. You’re going to need help. You’re initial team should a number of people. There are six people that most businesses are going to need:
- Financial Planner
- Business Coach
- Insurance brokers
- Employment consultants
More about this Show
We started Business Legal Lifecycle to create a simple way for you to understand complex legal terms. Most importantly we want to help you to develop a plan to take your business successfully into the future. There’s a startling statistic the underscores the importance of developing a solid plan. The majority of business owners are just seven months away from losing everything. A single aspect of your business that is not set-up correctly can shut down your whole operation very quickly. Legal advice is not cheap and even when you can afford it there is often a divide between lawyers and their clients. We want to close that gap once and for all. We want to put legal knowledge and tools into your hand to prevent the worst from happening to you.
Twice a week we are going to deliver those tools right to your home or office with Business Legal Lifecycle TV. We’ll start the week with Fast Fix Monday, a short 5-10 minute video that will tackle a single issue that businesses have to deal with. Then on Wednesday’s our main show will feature with more fulsome discussions and interviews all delivered in a straightforward and easy to understand format.