# Creating a company to trade under



## tollbridge

Dear Aussie Stock Forum

I have been investing in ordinary shares and CFDs for a number of years now and feel as though I have a good general knowledge of the market and all things finance. I work full-time in an industry completely non market related but feel like I would like to take my "trading hobby" to the next level. It is my ultimate goal that as I build up my experience and trading capital I will eventually be able to quit my day job and invest full-time. I do not expect to realistically be in a position to do this for at least another 5 years - probably longer.

I am at the tail end of studying a Diploma of Business Studies and have learned about the various legal structures of setting up a business. I have been playing around with the idea of separating my trading activity from my personal finances by setting up an incorporated company. This has several advantages / disadvantages and I would be extremely eager to hear from anyone who has either done this themselves or is familiar with what is required.

The possible advantages I can see by doing this is:
- It forces me to separate my own personal finances from my trading. I would be required to pay myself either through a regular salary or by way of dividends. Any money that I put into the company cannot be used (or wasted as is often the case) on personal expenses. By owning a company I would be required by law to always act in the best interests of the business and hold myself accountable by way of preparing and maintaining proper financial records.
- I can claim all my trading expenses such as computer equipment, internet access, brokerage, newspaper and magazine subscriptions, seminars, business travel and education as tax deductions. 
- All profit is charged at the company tax rate of 30%. 
- I can open bank accounts and trading accounts under the name of my company to trade with. 
- I can separate myself emotionally from the personal aspect of trading. I know this may sound strange but I'd personally find it less stressful and easier to trade according to my trading strategies if I knew that it wasn't my personal money being invested - it'd be the companies. I would be an employee of a business working each day and all I would receive is a set weekly or fortnightly salary (and hopefully a giant bonus at the end of each financial year).
- Being able to purchase physical property in the name of company - as my trading capital increases I would like the possibility of purchasing investment property in the name of my business.
- Professionalism and Ego! I'd feel comfortable explaining to friends and family that instead of quitting my job and day trading I started up my own company and was a professional investor. It sounds much more professional than simply being a day trader.

The possible disadvantages include:
- Reporting requirements are significantly more complex and detailed than they are for a personal investor. I would be required to submit reports to ASIC on a regular basis outlining the companies activity and financial position. As stated earlier this disadvantage also has an advantage of forcing me to become accountable for all the money flowing in and out of the company.
- I miss out on the income free tax area, although as I work full-time I do not benefit from this anyway.

I am sure there are many more advantages / disadvantages and I’d encourage everyone to submit their ideas or tips. The other question I have is whether I would be required to obtain a financial services license even though I was only trading for the companies benefit (not offering a service to the general public).

Thanking you in advance for your feedback.

Alex / Tollbridge.


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## bellenuit

*Re: Creating a company to trade under...*

There are advantages and disadvantages as you have listed.  I have a company set up for trading, but I am in the process of ceasing business and deregistering it. But my reasons for doing that are more to do with simplifying my life than anything else. Regarding some of the issues you raised:



> It forces me to separate my own personal finances from my trading




Forcing is the operative word here. The ATO requires you to separate your trading from your investing and that is one way to do it. However, you could equally do it by just having two accounts with your broker, one for traded stocks and one for investing. Even one account could be used for both, but it is harder to prove to the ATO that a particular purchase/sale combination was meant as an investment rather than as a trade. The decision needs to be made before you purchase as to the nature of the purchase, so the ATO will not view favourably transactions that are indistinguishable other than the tax outcome is more beneficial one way than the other. So the more you separate the transactions (separate accounts, separate entities etc.) the more acceptable will it be to the ATO.



> I can claim all my trading expenses such as computer equipment, internet access, brokerage, newspaper and magazine subscriptions, seminars, business travel and education as tax deductions.




That should still be possible even if you trade under you own name, so long as you differentiate between investment and non-investment use. 



> Being able to purchase physical property in the name of company - as my trading capital increases I would like the possibility of purchasing investment property in the name of my business.




Be really careful here. Companies cannot claim the 50% capital gains discount for assets held for more than 1 year. If the intention is to purchase long term investments under the company name, this could work against you.


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## bellenuit

*Re: Creating a company to trade under...*

One positive is that since the company is a separate legal entity, you can often participate twice in the same capital raising each up to the $15K p.a. limit. For instance, several companies had capital raisings this financial year where you were allowed buy shares up to $15K per individual (or entity). Even if you had different accounts through different brokers, you as a single entity could not exceed the $15K limit (assuming they were able to detect it). But a company is a different legal entity from you personally, so you would have been able to buy up to $15K in your own name and up to $15K in your company's name, so long as you met the other criteria.


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## Julia

*Re: Creating a company to trade under...*

Alex, have you considered setting up a Self Managed Super Fund with yourself as Sole Trustee?

Such a structure could allow you to do all that you've outlined (as far as I know) and only be taxed at 15%.  You would also be eligible for the government's co-contribution each year (think this is $1500 for your own contribution of $1000).

Depending on whether you were to use one of the online Super set-up organisations or have your own accountant, the cost annually would be from about $600 to $3000.

Maybe seek advice from an accountant.  Good luck.


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## Gerkin

*Re: Creating a company to trade under...*



Julia said:


> Alex, have you considered setting up a Self Managed Super Fund with yourself as Sole Trustee?
> 
> Such a structure could allow you to do all that you've outlined (as far as I know) and only be taxed at 15%.  You would also be eligible for the government's co-contribution each year (think this is $1500 for your own contribution of $1000).
> 
> Depending on whether you were to use one of the online Super set-up organisations or have your own accountant, the cost annually would be from about $600 to $3000.
> 
> Maybe seek advice from an accountant.  Good luck.




So assumig this kids age, he cant use/get this money for like 40 years?? as the age of preservation is like 60? Oh im only assuming hes 20

And also he cant pay himself a wage, and the SMSF cant carry on a business

Great advice


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## gav

*Re: Creating a company to trade under...*



Gerkin said:


> Great advice




Actually Julia hasn't given any "advice", she merely asked if Tollbridge had considered a SMSF and listed some of the benefits.  This option may or may not be suited to Tollbridge's personal circumstances, but none of us except Tollbridge will know that.  Then you go and make an assumption about Tollbridge's age, when there is no indication of Tollbridge's age in any of the posts in this thread??

Julia also suggested Tollbridge consider asking an accountant for advice.  What is wrong with that?

Gerkin, Julia has simply suggested an idea - which is something Tollbridge has asked for.



tollbridge said:


> I am sure there are many more advantages / disadvantages and I’d encourage everyone to submit their ideas or tips.


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## cutz

*Re: Creating a company to trade under...*



Gerkin said:


> So assumig this kids age, he cant use/get this money for like 40 years?? as the age of preservation is like 60? Oh im only assuming hes 20
> 
> And also he cant pay himself a wage, and the SMSF cant carry on a business
> 
> Great advice




I’d appreciate if you kept you comments to yourself, especially drivel aimed at one of ASF’s more market experienced person.


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## Gerkin

*Re: Creating a company to trade under...*

tollbridge is 20 actually.......anyway a smsf is horrid for a 20 year old to trade out of imho


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## Gerkin

*Re: Creating a company to trade under...*



cutz said:


> I’d appreciate if you kept you comments to yourself, especially drivel aimed at one of ASF’s more market experienced person.




I can say what i want.......the drivel came from a sugestion that a SMSF should be an option for a 2o year old still studying

Oh an how did my comments upset you personally


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## jerome

*Re: Creating a company to trade under...*

Thanks for your comments everyone, Really good information and food for thought.


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## RazzaDazzla

*Re: Creating a company to trade under...*

Interesting thread. I've been thinking of doing similar myself.

I recently read Steve McKnight's property books and he talks about seperating your personal life/finances from your investments. Ultimately, you don't need to own your assets, just need to be able to control the assets.

He talks about setting up a trust which buys 5 or so properties. He then suggests that a Company is the trustee of the trust. You of course are the director of the company who is the trustee of the trust.

So effectively it is;
You > Company > Trust > Asset

This way you are protected from anyone suing you as an individual. If someone broke their neck on your property, they could only sue the Trust or the company.

It also has the advantage that you can do what you want with the income. E.g. if the wife is a low income earner, you can pay her a larger dividend and if you are a higher income earner, you can direct less money at yourself. You can then also direct money to children to then pay for the school/uni fees etc. As the kids aren't earning any other income, when you give them cash, they pay bugger all tax on it. Makes much more sense than paying 30+% tax on the money then using it to pay for your kids education. Give it straight to the kids who pay 15% and hen they pay for the education.

So; in short I too am curious as to what structures people may be using for their trading. Obviously I'll be speaking to an Accountant/solicitor but personal experiences will be appreciated.


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## pixel

*Re: Creating a company to trade under...*



RazzaDazzla said:


> So effectively it is;
> You > Company > Trust > Asset
> 
> This way you are protected from anyone suing you as an individual. If someone broke their neck on your property, they could only sue the Trust or the company.
> 
> So; in short I too am curious as to what structures people may be using for their trading. Obviously I'll be speaking to an Accountant/solicitor but personal experiences will be appreciated.




Hi RazzaDazzla,
not going into details, merely to satisfy your curiosity:

Over ten years ago, I've set up a Trust that owns the assets; but the Trustees are individuals, eliminating the " > Company " level in your diagram. (The additional level didn't seem necessary in our case, although I can see a reason for it, the way you describe the application.)
The Deed has been compiled at the broadest scope, so I can trade anything, including own products that include GST. Registration for GST is no burden, and has advantages for all-round business reasons. Annual profits are distributed across the family "as needed" - I only have to make sure that ALL profit is distributed. (Actually, my Accountant makes sure of that because he is interested in keeping his license 
Whether I pay myself a salary or not has never been an issue. My share of the annual distribution could be viewed as such, as I regularly file personal income tax returns for the distributed dividend.

Check with your Accountant and maybe a Legal Advisor whether such a construct could be beneficial for you too.


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## tollbridge

*Re: Creating a company to trade under...*

Thank you for your advice everyone. Unfortunately a SMSF is not really what I am looking for as I am indeed only 20 years of age and the goal is to be able to pay myself a salary from my trading. Judging by the replies on this thread it would seem that creating a company to trade shares and CFDs under has been done before by other members. I definitely believe that this is the way to go once an investor has passed the "Mum and Dad" retail investor stage.

Cheers

Alex / Tollbridge


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## weird

*Re: Creating a company to trade under...*

I trade using a company, but like others have suggested, find a good accountant.


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## pixel

*Re: Creating a company to trade under...*



tollbridge said:


> a SMSF is not really what I am looking for as I am indeed only 20 years of age and the goal is to be able to pay myself a salary from my trading.




Hi Alex,
At your age I wouldn't look at an SMSF either; I only recently started mine - as I'm three times your current age 
The company I created had precisely the reason behind it that you quoted: To be able to trade for a profit in a structured ("disciplined/professional") manner. I had to trust my Accountant in that regard, who assured me that a Family Trust was the most flexible way.

*Why do I now operate a SMSF as well?* It has far* more red tape and strings attached* - but it has *tax advantages well beyond those of a stock-standard Family Trust*. 
In younger years, those strings - lasting a lifetime! - are arguably far too stringent to justify tax savings; especially as you won't yet have accrued any "employer contributions" worth mentioning. *After 40 years of working life*, most of it with employer contributions *and *a generous salary sacrifice on top of those, my ermployer-sponsored Superfund accounts looked very different. But even though I switched between Magaged Funds, they all lost me a fair whack between December 2007 and June 2009  yet kept charging me for the privilege.  

With a SMSF, any stuff-ups happening in future will be my own - and I'll make them for free


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## Sir Osisofliver

*Re: Creating a company to trade under...*



RazzaDazzla said:


> So effectively it is;
> You > Company > Trust > Asset
> 
> This way you are protected from anyone suing you as an individual. If someone broke their neck on your property, they could only sue the Trust or the company.
> 
> It also has the advantage that you can do what you want with the income. E.g. if the wife is a low income earner, you can pay her a larger dividend and if you are a higher income earner, you can direct less money at yourself. You can then also direct money to children to then pay for the school/uni fees etc. As the kids aren't earning any other income, when you give them cash, they pay bugger all tax on it. Makes much more sense than paying 30+% tax on the money then using it to pay for your kids education. Give it straight to the kids who pay 15% and hen they pay for the education.
> 
> So; in short I too am curious as to what structures people may be using for their trading. Obviously I'll be speaking to an Accountant/solicitor but personal experiences will be appreciated.




You missed a structure. (Of course it's not necessary until the income level is...substantial so it doesn't suit everyone).

Company> Trust> Trustees + Beneficiary Company 

By having a separate company as one of the beneficiaries of the Trust and the ability of the Trustee to direct funds at the Trustee's discretion, in addition to transfering funds to the other beneficiaries, excess funds can be transferred to the beneficiary company.

You've now fulfilled your obligation to pay out all funds earned in the trust, but limited the payment being made to you (and your MTR). You can then build funds in the Discretionary company for multiple reasons.

1) Lend money back to the Trust, investment company or yourself for future investment
2) Payment of _franked_ dividends to the company directors (you)
3) Risk management (war chest or reserves)

Cheers

Sir O


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## BrightGreenGlow

*Setting up a Company?*

Hey guys,

Looking for your opinions. Would it be worth setting up a company for my shares to be held under. By company I guess I mean Sole Trader???

Asset wise I currently hold around $135,000 in a share portfolio. However, in 6 months time I would like to start trading in the forex once I research more and practice more.

What are the advantages of setting up a company or being a sole trader?
- Tax?
- Law?
- ?

The only disadvantage seems to be the $600 start up fee.

Thanks guys for any help or links.


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## RazzaDazzla

Not sure what the $600 startup fee is.

I was a sole trader while at uni when I was fixing people's computers. All I did to set this up was apply for an ABN and ticked the "Sole Trader" box.

Sole trader basically just adds the income from your "sole trading" activities onto your personal tax return.

I personally am looking into setting up company and trust structure. I need to have a chat to a few accountants to get a quote. As previously stated; this allows me to control the assets without owning them. So if someone were to sue me personally, they can't touch these assets as I personally don't own them. I do however control them as I am the director of a company who is the trustee of a trust.

One thing I want to explore is the difference between Trusts and Family Trusts.

Other benefit is, when the trust makes a profit; as the director of the company who is the trustee for the trust; I can decide what happens to the dividens/profits. So down the track I could pay dividends to children who would then use the money to pay for school fees etc.

This becomes tax effective as my children (which I don't have yet) would earn next to nothing, so they will pay no tax. Where as if I was to take the money first, I would have to pay personal tax on it before then deciding to spend it on my kids.

As some wise man said here before;

Rich people earn, spend the money then pay tax on what's left.
Poor people earn, pay tax, then spend.

another benefit I believe this kind of structure has is in borrowing money for investments. Once the company/trust starts making profits, it can borrow based on this income. However, as the director of a company who is the trustee for the trust, i can guarantee a loan using personal assets such as family home etc. This of course has its own risks but is a benefit.


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## tollbridge

*Re: Setting up a Company?*



BrightGreenGlow said:


> Hey guys,
> 
> Looking for your opinions. Would it be worth setting up a company for my shares to be held under. By company I guess I mean Sole Trader???
> 
> Asset wise I currently hold around $135,000 in a share portfolio. However, in 6 months time I would like to start trading in the forex once I research more and practice more.
> 
> What are the advantages of setting up a company or being a sole trader?
> - Tax?
> - Law?
> - ?
> 
> The only disadvantage seems to be the $600 start up fee.
> 
> Thanks guys for any help or links.




Hi John

You need to conduct some research on the various structures of a business. There is a HUGE difference between being a sole trader and being the director of a company and plenty of articles have been written explaining how they differ. A simple Google search should yield the information you require. 

I'm also not sure what you mean by the $600 start up fee. If you want to incorporate a company the fees are definitely going to be substantially more than that, the reporting requirements are also far more exhaustive than if you were a sole trader that again would add to the ongoing cost. 

Give you a PM if you need help on working out the difference between business structures - it's actually pretty fascinating stuff.

After reading the replies on this forum and conducting further research I am going to incorporate a company and conduct all my trading under it. Personally this is a big boost to my ego and I look forward to seeing myself as an "employee" making a profit that I have access to but is not mine to spend on personal expenses. As stated before I am going to start recording in detail all my expenses relating to trading to claim as tax deductions. 

I am 20 years old and plan to spend the rest of my career trading full-time, I couldn't think of a better way to spend my life. I hope I can contribute to this forum and make a few friends.

Thanks

Tollbridge


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## Gunslinger

*Re: Creating a company to trade under...*



Sir Osisofliver said:


> ...
> 2) Payment of _franked_ dividends to the company directors (you)
> ...




Hi Sir O,
I can see the benefits of having another company as a beneficiary of the trust but with the franked dividends, what's the benefit?
You still have to pay the difference between the 30% (fully franked) rate and your personal tax rate no?

Sorry if I'm a bit slow, I am new to this 

Cheers,

JB


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## Gunslinger

*Re: Setting up a Company?*



tollbridge said:


> ...
> After reading the replies on this forum and conducting further research I am going to incorporate a company and conduct all my trading under it. Personally this is a big boost to my ego and I look forward to seeing myself as an "employee" making a profit that I have access to but is not mine to spend on personal expenses. As stated before I am going to start recording in detail all my expenses relating to trading to claim as tax deductions.
> ...




Hi toll,
Good to see you've got a plan.
Do you mind me asking what sort of figures you're anticipating for fees for 1. setting up the company and 2. ongoing management?

I've thought about this in the past but have basically discounted it until I build a substantial portfolio (1/2M?), maybe I need to broach it with my accountant again.

Cheers,
JB


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## Sir Osisofliver

*Re: Creating a company to trade under...*



Gunslinger said:


> Hi Sir O,
> I can see the benefits of having another company as a beneficiary of the trust but with the franked dividends, what's the benefit?
> You still have to pay the difference between the 30% (fully franked) rate and your personal tax rate no?
> 
> Sorry if I'm a bit slow, I am new to this
> 
> Cheers,
> 
> JB




Gunslinger,

It depends upon your MTR.  If for example income in your personal name was relatively small, EG 30% tax rate, then the dividends being paid to you leave your effective tax rate unchanged. If all your investments are not in your own name then unless you are in a high paying job (and there are always options in regards to this as well), you are likely to have a low MTR.

There may also come a time when you decide that you would like to take a year off work to have a child, or bum around Europe with a Swedish underwear model. You then make a payment from the bene company when you have no income to relase the funds at a minimal tax regime.



Cheers

Sir O


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## Sir Osisofliver

*Re: Setting up a Company?*



Gunslinger said:


> Hi toll,
> Good to see you've got a plan.
> Do you mind me asking what sort of figures you're anticipating for fees for 1. setting up the company and 2. ongoing management?
> 
> I've thought about this in the past but have basically discounted it until I build a substantial portfolio (1/2M?), maybe I need to broach it with my accountant again.
> 
> Cheers,
> JB




Gunslinger - by the time you build a 2 mill portfolio you may incur some significant CGT to transfer that into the corporate entity.  What may save you a small amount in the near term may cost you a significant amount in the long term.

Cheers

Sir O


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## Gunslinger

*Re: Creating a company to trade under...*



Sir Osisofliver said:


> Gunslinger,
> 
> It depends upon your MTR.  If for example income in your personal name was relatively small, EG 30% tax rate, then the dividends being paid to you leave your effective tax rate unchanged. If all your investments are not in your own name then unless you are in a high paying job (and there are always options in regards to this as well), you are likely to have a low MTR.
> ...




Yes, but if you (or your spouse/child etc..) were the only beneficiaries of the company then you'd end up paying the same $ tax anyway.
Definitely worth it if you get to backpack with a swedish underwear model though

Thanks for the other reply too and a BIG thanks for the beginners thread.

Cheers,
JB


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## The Muffin Man

*Re: Creating a company to trade under...*



Sir Osisofliver said:


> You missed a structure. (Of course it's not necessary until the income level is...substantial so it doesn't suit everyone).
> 
> Company> Trust> Trustees + Beneficiary Company
> 
> By having a separate company as one of the beneficiaries of the Trust and the ability of the Trustee to direct funds at the Trustee's discretion, in addition to transfering funds to the other beneficiaries, excess funds can be transferred to the beneficiary company.
> 
> You've now fulfilled your obligation to pay out all funds earned in the trust, but limited the payment being made to you (and your MTR). You can then build funds in the Discretionary company for multiple reasons.
> 
> 1) Lend money back to the Trust, investment company or yourself for future investment
> 2) Payment of _franked_ dividends to the company directors (you)
> 3) Risk management (war chest or reserves)
> 
> Cheers
> 
> Sir O




You need to be extremely careful if you use a bucket company as a conduit to distribute profits from a trust. The ATO is currently looking at treating unpaid present entitlements to Companies as loans. This is sending shivers down the spine of many, many accountants, especially as the ATO is looking at applying this view retrospectively.


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## tollbridge

It's interesting to see how my thread regarding creating a company to trade under has yielded multiple strategies to minimise tax. I am not *"having a go"* or *saying it's a bad thing* however I want it to be known that with the exception of the 30% company tax rate *my* reasons for wanting to set up a company have nothing to do with tax avoidance or minimisation.

I have just finished reading "The Wolf of Wall Street" and so I'm probably a little more paranoid right now than normal. When I first began trading, the very first lesson that was drummed into me by my mentor was that paying tax is unavoidable. There are some extremely intelligent people who are able to "beat the system" but I know in myself I am not one of them. I would rather spend the time and energy researching and trading stocks and simply paying my tax bill in full at the end of each year. By doing this it completely removes any feelings of guilt or paranoia and makes by books squeaky clean. I also do not donate to charity or non-profit organisations as I believe this is the duty of the government and as I pay my tax in full I am already contributing.

_I'd like to state that the views and opinions are of mine only and I certainly do not encourage others from making the same decisions as me._



Gunslinger said:


> Hi toll,
> Good to see you've got a plan.
> Do you mind me asking what sort of figures you're anticipating for fees for 1. setting up the company and 2. ongoing management?
> 
> I've thought about this in the past but have basically discounted it until I build a substantial portfolio (1/2M?), maybe I need to broach it with my accountant again.
> 
> Cheers,
> JB




Hi JB

Part of my trading plan is to keep everything I do as simple as possible. My partner has an existing relationship with a CPA on the Gold Coast and I will utilise her services for taxation issues beyond my knowledge or control.

I have found a website which claims to set up a company and all the required documents for a fee of around $800. I won't post the URL on here but a simple Google search of "create a company" should bring up what you're looking for. This is of course just the initial set up fee and to be honest I'm not sure of the ongoing reporting requirement expenses. I'd be interested to hear from anyone who has used a website such as the above and do so at your own peril - it could certainly turn into A Current Affair material.

I would definitely advise you to make an appointment with your accountant to discuss what future fees you would be liable for.


Tollbridge


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## The Muffin Man

If you want the entity to be a share trader, then a company is probably the best entity for it. If you trade shares, anything you earn is ordinary income, not a capital gain. Just remember that you can really only take money out of the company as a dividend, once you start loaning money from the company all sorts of problems can arise, unless the loan is on commercial terms.

If you want the entity to invest in shares and hold them, then a trust would be the better option I think. 

It depends what you exactly what you want to do inside the entity. 

There is nothing wrong with minimising your tax either, as long as it's done within the rules. The rules allow for quite a bit of tax minimisation.


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## RazzaDazzla

IMO the $800 would be better spent by buidling a relationship with an accountant/solicitor rather than giving it to some website that says they can setup a business for you for $800.

As for minimising tax, I always remember this quote from Kerry Packer. When asked about his company's tax minimisation schemes, he replied: 
_"Of course I am minimising my tax. And if anybody in this country doesn't minimise their tax, they want their heads read, because as a government, I can tell you you're not spending it that well that we should be donating extra!"_

I wish I could find a you tube video of him saying this. I've seen it before and it's hilarious!


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## Gunslinger

tollbridge said:


> ...I also do not donate to charity or non-profit organisations as I believe this is the duty of the government and as I pay my tax in full I am already contributing.
> ...
> Tollbridge




Hi Toll,
Dont take this as an attack as it's not meant to be but.
From my point of view the point of the government is to provide for health, education and old age and to design and police a framework of fair and unobtrusive laws which society can operate under.
The rest should be left to private enterprise as they should do it more effectively as they have more intrinsic motivation.
Giving to charities and supporting the less fortunate is IMO the job of the public and an important part of the evolution of humanity and if we lived in a fairer society, a lot of our issues would be lessened.
IMO a lot of the legislation coming out of governement these days is far overstepping the mark and (with one notable exception) biased largely in favour of big business.

Have a nice day 

Cheers,

JB


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## tollbridge

Hi JB - point taken.

I'm sure that there are billions of arguments on the internet regarding world issues such as poverty, war etc. My policy is still that it's up to the government - the men and women whom the majority of the popularion have elected to be the custodians of the federal reserve to *be the main contributors* for support financial and physical aid to both domestic and internarianl areas of need.

_Again let me stress this is my view only and I certainly don't discourage anyone from dontating to whatever cause they feel drawn too. In fact,I think it's an admirable trait!_


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## prawn_86

Just as a quick aside, i am looking at starting a company soon. What are the annual fee's charged by ASIC? I cant seem to find it anywhere on their site.

Thanks


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## tradingdays

Unfortunately due to the ATO's (and dare i say labor gov??) wonderful new ruling the trust > bucket company set up is no longer worth it as in short will created a DIV7a issue if funds that are distributed to the company arent actually distrivuted to the company. This creates all types of headaches look up TR 2010/3 on the ATO site if you want to know the nitty gritty.

IMHO if your earning a decent wage elsewhere the company is the best set up to go with. Tax is capped at 30%, you dont have to distribute profits and most profits will eventuallly be paid out with 30% tax already paid ie - franked dividend. As a bonus in the future the company tax rate is falling to 28%.

Have you thought about a company set up as follows: Company with diff typoe of shares A - class, B - class. Your the director means your in control of where the dividends are paid. Having different types of shares means that yopu could then have discretion as to who is paid a dividend.

So lets for hypothetical sake say the A class share is owned by your family trust. You could pay a dividend to the family trust and then distrivute this dividend to the beneficiaries ie - you, your parents? your children etc. therefore taking advantage of each persons lower tax bracket.

Then lets say for arguments sake your parents have reached retirement age. your parents openn a smsf and this smsf owns the b class share. As the smsf is the taxed at only 15% you distribute all the dividends to your parents smsf as the dividends are franked at 30% you get a tax credit of 15cents in the dollar. 

Hypothetically your parents could then draw down the money and gift it to you. You could then lend the money back to the company to trade with. The company could then pay you a nominal/minimal/no interest on the loan. As it is a loan to the company you could then draw this loan down at any time with no tax consequences.

End result is youve effectively only paid 15% tax.

This is all HYPOTHETICAL however and I would ADVISE YOU TO SEEK PROFESSIONAL HELP. 




prawn_86 said:


> Just as a quick aside, i am looking at starting a company soon. What are the annual fee's charged by ASIC? I cant seem to find it anywhere on their site.
> 
> Thanks




$212


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