Business Names, Structures and Registration
Before starting a business you should consider how you would like to structure your business to suit not only the type of business but your personal situation.

Functioning as a Sole Trader is the simplest and most inexpensive form of business structure to set up. Although, it is important to note that you will still be personally responsible for any actions of the business and personally liable for all business debts. You should seek professional advice to understand your options and what is the best structure for your business and your situation.

One of the most important things that you will do is to name your business, and it is crucial to remember to chose a name that is fitting to your business offering. You should ensure that your business name is registered with the department of fair trading in your state and be aware that in some cases this process should also include registering a trade mark, which is a separate action.

Generally speaking, most businesses will require some type of business license in order to trade, therefore it is essential that before you start operating you research and obtain the relevant license/s that are required.

Taxation Obligations
Perhaps one of the most over-whelming aspects for new business owners is the vast array of tax obligations and requirements that need to be adhered to. From Federal Taxes such as Goods and Services Tax (GST), Income Tax and Capital Gains Tax (CGT) to State Taxes such as Payroll Tax and Transfer Duty it is important to understand the obligations of your business so as to avoid any penalties. Taxation obligations do not just refer to payment of taxes either, it also concerns the processes that your business has in place for the recording and tracking of financial information.

Legal Issues
Sound legal advice is also key to setting up and maintaining a successful business. Gaining legal advice can help you to make informed decisions in relation to forming business relationships and dispute resolution, employment issues and solutions, insurance, intellectual property protection and occupational health and safety.

Financial Management
In starting a business one key issue that many people struggle with is building up the finance. There are two ways to do this: either borrow the funds (debt equity) or use any funds that you have available to you (owner’s equity). In choosing between the two it is important to consider things such as interest rates, fees etc.

Systems for the management of your cashflow don’t have to be too in depth, however even the most simple of systems are integral in making sure that you can keep track of where your cash comes from and is spent.

The team of accountants, lawyersand business advisors at The Quinn Group can assist you with a wide range of services required to establish and maintain a business. For individually tailored information and advice for your new or existing business situation contact us on 1300 QUINNS or click here to submit an online enquiry.

Once it has been determined that a company is insolvent there are essentially two ways that an insolvency practitioner is able to assist. Depending on individual circumstances, companies that are in trouble can either be assisted to trade out of their difficulties or wind up the company, known as liquidation.

So, how do you know if your business is in trouble and you should start thinking about liquidation as a solution? There are 3 main areas of the business that you can look to as indicators of your business’ situation:

Financial statement indicators
This refers to both the company’s paperwork in relation to its finances as well as the information that is presented in that paperwork. Some specific financial statement indicators that a business should look for to determine if there is a potential problem include the recording of continual losses or the inability to produce timely and accurate financial information. This data helps to report on the company’s trading performance and financial position as well as assisting with making reliable forecasts. If you are having difficulties with producing your financial reports or the information contained within them is not as positive as it should be, it should be investigated further to determine the main cause of the problems. It may, or may not, mean that you require liquidation immediately but either way it will help you to identify potential issues that could cause problems in the future.

Cash flow indicators
Cash flow, and cash flow indicators, are related to the availability of money in the business. Factors that could indicate that the business is in trouble and should be further investigated include overdue State and Federal taxes such as Income Tax, GST and Payroll Tax, making payments in rounded figures and only paying minimum amounts and issuing post-dated or having dishonoured cheques. If any of these are apparent in your business it is important to look into the reasons why and attempt to rectify them as soon as possible in order to minimise the effect on the business. If it is not easily rectified then it is likely that your company may be trading insolvent and you may need to look at liquidation as a resolution.

Creditor relationship indicators
A creditor relationship is the business dealings with entities that the company owes money to or is due to pay. For instance, if you have a bad relationship with your bank and subsequently may not be able to borrow further funds from there, or any other alternative means, this can be an indication that insolvency and liquidation are imminent. Additionally, if you have creditors who continue to be unpaid outside of their stipulated trading terms or suppliers are requesting that you move to cash on delivery or require payment before supply this can also be an indicator of an insolvent, or soon to be insolvent business.

If any of the above apply to your business then it is wise to act now. The longer you leave a problem, or a potential problem, the worse the clean up will be. The team of lawyers and accountants at The Quinn Group can assist you with identifying and resolving problems that your business may be experiencing as well as assist with the liquidation process if that is what is required. For individually tailored information and advice on what you should do for your business situation contact us on 1300 QUINNS or click here to submit an online enquiry.

Business succession planning refers to assessing, devising and implementing “exit strategies” for the business owner or owners. This can be for when there is an unexpected need for a new owner – such as in the case of death, disability or significant trauma – or it can also be utilised in relation to planning for the future, such as the business owner/s going into retirement, passing the business on to family member or selling it to a completely unrelated party.

When implemented correctly, business succession plan can assist you to:
1. Address the issues of when and how the changes to new ownership and management will occur, and
2. Manage your business to have an improved chance of survival when the transition to new ownership or management takes place.

It is important to differentiate between business succession planning and key person insurance as the two concepts are often confused. Business succession planning is generally concerned with the more logistical and day-to-day implications to the business should the owner not be around. This includes considering who will manage the operations and/or be the new owner and how would the succession impact the spouse or beneficiary of the exiting party. Essentially a risk management strategy, business succession planning should also involve any other entities that are operated, managed or owned by you or your business.

Key Person Insurance exists to protect the business against risks that it may be exposed to should the “key person” (or persons) suddenly exit the business. A key person in this context is considered to be a business owner, principal, manager or sales executive. These people are valuable in the business as they generate income and profit and they may generate capital cost for re-training or replacement. Key Person Insurance is concerned with the direct and immediate effects to the financial state of the business such as revenue and profit. It considers, and seeks to formulate answers to questions such as; if the key person is no longer around what would be the effect on revenue and profit? Would the business be able to continue trading? Could it pay the necessary bills and other costs?

It is extremely important to have plans in place that will protect not only your lifestyle interests and needs but also your intentions for your business. It is never too early to start planning for the future, so why not contact the professionals at The Quinn Group to find out more about a tailored business succession plan for your business.

The Quinn Group are able to provide business owners with personalised advice on securing the future of their business. For more information on succession planning for your business, contact us on 1300 QUINN or click here to submit an online enquiry.

There are five key reasons that have been identified as to why businesses stay small. Business owners can focus on these key areas to work towards achieving success for their business.

1. A Lack of Vision for the Business – Business owners need to have a clear vision of where they want their business to go. Without vision, a business becomes directionless and loses focus of what its purpose and goals are. A business with no direction will find it hard to make any type of decision. Specifically, they are unable to take advantage of opportunities that arise to help the business grow, and similarly they cannot easily identify those that should be avoided. Often, a business that has no vision will expend a significant amount of time and money on trying different a range of options with the expectation that they will have an immediate and positive result.

2. No Passion or Commitment – Passion is usually aligned with a strong vision for the business. The dedication and commitment that comes from a passionate business owner will help in achieving the business’ goals. Whilst it is advised to set goals for the business, without commitment and passion, business owners can easily become distracted from these goals, and this in turn contributes to further slowing the growth of the business. Passion and dedication is infectious and a truly passionate owner can effect passion in their employees and customers.

3. No set goals or plans – A business needs more than just vision if it wants to achieve its desired position and level of success. Goals create stepping stones towards the future business position. These does not necessarily need to be a formal business plan – although this is highly recommended as it helps to plan and track the businesses progress – but it should at least be considered in detail to the point where it is clear in the mind of the business owner/s and easily communicated to staff and customers if and when required. Goals also assist businesses to not only find opportunities that may help them towards success but also creates the belief that success is achievable.

4. Business owners not valuing their time – It may seem obvious, but it is imperative that business owners spend dedicated time on the core functions of their business. They need to spend time working on the business not working in the business. Business owners often make the mistake of working on non-core tasks within the business to save on money or due to inadequate systems put in place to cope with these tasks. In order to be more successful, business owners should employ staff to cope with these non-core tasks and to help create adequate systems to then allow the owner to focus on building and strengthening the business.

5. A lack of business knowledge – Small business owners do not necessarily need to be an expert on everything but it is important for them to have the right kind of knowledge. Often having a basic understanding of the fundamentals of running a business will encourage them to seek advice and support in the areas of the business that they do not know as much about. An important area which is usually forgotten or is thought of as a costly expense by business owners is education. Education should instead be thought of as an investment, as a lack of education results in a lack of knowledge. Without knowledge and skills the business is inhibited from growing to it full potential.

The issue that most small businesses and small business owners have is that they find it difficult to achieve the reward and results that they expect in return for the effort in time and money that they have invested. It is important to remember that with the right vision and professional guidance and advice there is always the opportunity to re-invigorate and refocus your business, putting it back on track to the visions and goals that you have planned for.

If you feel that some, or all, the above reasons are preventing your business from maximizing its potential or expanding then the team at The Quinn Group can help you. From years of experience dealing with a range of small businesses the accountants and lawyers at The Quinn Group are able to provide advice to business owners to help them achieve maximum growth and profits through tried and tested business practices. For more advice on improving your business, contact us on 1300 QUINN or click here to submit an online enquiry.

Current legislation dictates that foreign investors looking to purchase a share of 15% or more interest in an asset valued at $100 million or more must apply to the Foreign Investment Review Board (FIRB) for approval. Additionally, there are other different thresholds that apply for offshore takeovers, US investors and US offshore takeovers.

With the proposed changes to the current application and screening processes, it is expected that the number of foreign investors who will be required to seek permission from the Federal Government to purchase assets in Australia will decrease by up to 20% of current levels.

On announcing the legislation review, Treasurer Wayne Swan, acknowledged that the existing criteria of FIRB’s screening process could often result in additional compliance costs for applicants. This could both directly, and indirectly, result in making the Australian economy a less attractive platform for foreign investors.

In the current global economic climate it is important to take steps that ensure not only consistent and continual levels of overseas investment but to introduce new ideas and practices, such as increasing the currently threshold levels, that seek to increase foreign investment in our country. 

Specifically, the reforms have raised the existing threshold of $100 million to $219 million. Details of the changes across various investment groups can be seen in the table below.

As a result of the changes it is estimated that one in five business applications will no longer require screening by FIRB.

As you can see from the above table, not only have the existing thresholds been significantly increased but the changes see the current requirement to seek permission from the FIRB for foreign investors who are looking to establish a business in Australia that is valued at over $10 million to, has been abolished.

Seemingly prompted by recent predictions of a drop in foreign investment across the globe, these changes are intended to reorganise the country’s foreign investment processes in an attempt to increase the country’s competitiveness and perception in the world economic community as an attractive place to invest.

It is obvious that global capital markets are not exactly in a state of rapid growth at the moment. In light of that, it is important that our economy takes action to encourage greater levels of cross border investment and attempt to further stimulate the economic upturn. It is interesting to note that Australia is one of only six OECD countries to have actively effected changes to their foreign investment policies.

It is understood that changes to foreign investment will not have an immediate overnight effect. However, the Government remains positive that this action will play its part in the economic recovery of our country as part of the global economic community.

If you have further questions regarding the changes to Australia’s foreign investment restrictions or for advice regarding any investment issues that you may have please contact The Quinn Group on 1300 QUINNS or click here to submit an online enquiry

The new laws will provide a standardised system for the bookkeeping industry and calls on practitioners to achieve and maintain the highest levels of qualification and experience. There is the opinion that of course these qualifications and experience exist already within the industry but the formalisation of the requirements is not only of benefit to the bookkeepers themselves but to consumers as well. The industry benefits from knowing that its members are operating to the highest of standards and consumers are able to feel confident that their bookkeeper possesses a relevant and up-to-date skill set and has the support of his or her industry as they have proven themselves by meeting the registration criteria.

Specifically, the new legislation will only directly impact on bookkeepers who are involved with preparing and lodging BAS. Those who are involved in data inputting to compile a report for the purpose of completing and submitting a BAS can continue to do so under the new laws without being registered but their duties are limited to that task only. However, where large businesses are concerned it is not always necessary for each individual to meet the criteria and be registered independently. Provided that the business is seen to have a satisfactory number of registered individuals and the BAS preparation process is being supervised by those registered bookkeepers or BAS/tax agents then this considered acceptable practice. As part of the introduction of the legislation a Tax Practitioners Board will be established and they will be able to provide more clarity on this and other matters.

The laws will also see the introduction of a Code of Professional Conduct which again formalises the expected actions of bookkeeping professionals that those engaging bookkeeping services expect and deserve on all occasions. Areas addressed by the code include: honesty and integrity, independence, confidentiality and competence.

In addition to standardising practices, the Act will introduce strict civil sanctions resulting in substantial fines for any bookkeepers who continue to prepare and lodge BAS without the required registration.

For consumers who employ the services of a bookkeeper the pending changes are of benefit in that it will now be easier to locate and identify accredited professionals and if there are any doubts as to the status of existing providers it will be easy to hold them accountable and move to a new bookkeeper if they do not meet the minimum requirements. Of additional benefit is the ‘safe harbour’ provisions of the new Act. Under the proposed new legislation, taxpayers are protected from having to pay administrative penalties for late lodgment or making a false or misleading declaration on the condition that they engaged a registered BAS agent and provided them with all the relevant information to enable the preparation of the document.

Consumers can choose registered BAS agents knowing that they meet the following eligibility for registration criteria:
• Applicants must be considered a ‘fit and proper person’ – generally this is determined by considering if, in the past 5 years, the individual has  convictions for a serious tax offence, fraud or dishonesty, has become an undischarged bankrupt or has served a term of imprisonment. Any of these will result in the rejection of a registration application or the discontinuation of an existing registration.
• Qualifications and Experience – individuals must have at least a Certificate IV in Financial Services (Accounting) or (Bookkeeping) from an accredited institution where the course required successful completion of basic GST and BAS taxation principles and must have undertaken at least 1400 hours of relevant experience in the past 3 years.

Registration is valid for a period of 3 years and re-registration or renewal requires the same qualification and experience checks as for initial registration.

As practicing accountants and tax agents the bookkeepers at Quinn Consultants will all be compliant under the proposed legislation. For expert bookkeeping, tax and accounting advice contact us on 1300 QUINNS or click here to submit an online enquiry.

A SMSF is a vehicle that is used to manage the superannuation portfolio of most commonly, an individual or family.  A SMSF can have up to 4 members.

A SMSF’s purpose is to successfully save for retirement by allowing its members greater investment flexibility, choice and control over their superannuation assets.

The primary advantages of using a SMSF include:

• Flexibility - Investment choice is far greater than all other superannuation funds.  SMSFs, can invest in a wide range of investments, including residential property, commercial property, shares, term deposits and artwork amongst others.
• Gearing - Due to recent legislative changes, SMSF’s are now able to borrow to invest. This may result in higher returns within a portfolio by enabling the fund to buy assets they may not have had the funds to previously purchase, such as a property.
• Potentially Lower Fees - Provided the SMSF has a sufficient investment portfolio, there is the potential for lower establishment and administration fees.   Generally speaking, due to the ongoing compliance and administrative costs, a SMSF is only economically viable where the combined superannuation portfolio of all members exceeds $100,000.  It can be lower, especially if you plan on making significant super contributions or if you plan on gearing within your fund.

Some additional issues to consider when considering setting up a SMSF include:

• Administration and Compliance - The administrative, compliance and reporting requirements for trustees of self managed funds can be time consuming and costly – but that’s where we can help. Quinn Consultants can work with you to ensure your fund remains compliant with all legislation and can help you reduce your administration time.
• Legislative Risk – The superannuation legislation can be complex and constantly changes.  It is essential that the fund is set up the right way from the start.  If a fund is found not to be a ‘complying fund’ the assets of the fund can be taxed at 45%.   No need for concern, as we are here to help.

Where we can help

• Free review of your financial position and objectives to see if a SMSF is appropriate for you
• Cost effectively setting up a SMSF
• Investment advice for your SMSF benefits, including finding cost and tax effective investments and helping you with your retirement strategies
• All ongoing compliance obligations, including preparation of your audited financial statements and tax return

Should you have any questions regarding SMSF’s and whether it would suit your needs please contact The Quinn Group on 1300 QUINNS or click here to submit an online enquiry.

It is extremely important to understand that super savings cannot be accessed prior to retirement, except in some very limited and highly restricted circumstances. These specific circumstances are usually related to specific medical conditions or when the individual/s are experiencing severe financial hardship.

The promoters of these illegal super schemes encourage you to transfer super savings from your existing fund to a self-managed super fund (SMSF) so that you can access and utilise your super savings before you retire. They offer to make it easy for you to complete the transfer in return for a substantial fee.

These promoters will often target people who are under financial pressure or who do not have a clear understanding of superannuation laws. Most of these illegal schemes require you to roll over your savings from your large, established super fund into a SMSF. Getting involved with one of these schemes by either offering or accepting the transaction constitutes illegal activity and is treated as such by authorities. Not only is it illegal but those who chose to participate in these schemes also leave themselves vulnerable to the possibility of losing some or all of their super savings to the criminals but also exposing themselves to possible identity fraud. 

Superannuation savings are intended to provide you with financial security and support when you retire. As mentioned previously early access to the funds is not permitted and if found to do so illegally there are hefty penalties to pay. Penalties vary depending on the party at fault and an outline of these follows below.

Penalties for an individual/ a member of a super fund: Any money you withdraw from a super fund will be included as income in your tax return and will be fully assessed at your marginal tax rate, plus the Medicare levy. Any fee or commission that a promoter takes from your super savings when they help you to roll over your super or set up an SMSF cannot be claimed as a deduction. If you do not include withdrawn super amounts in your tax return then you may be required to pay interest and penalties on the additional tax that you owe.

Penalties for a trustee: As a trustee of the super fund, any super that you illegally access forms part of your assessable income and you are likely to face higher taxes and additional penalties as a result.

Trustees can also be disqualified if and when they allow super savings to be accessed early. Disqualified persons are then unable to operate as a trustee of an SMSF. As a trustee, if you knowingly allow illegal access of super savings, you may be liable for penalties of up to $220,000 and/or jail terms of up to five years, or fines of up to $1.1 million for corporate trustees.

Penalties for a SMSF: An SMSF used to assist the illegal release of super savings may be treated as non-complying and as a result the fund’s income will be taxed at the highest marginal tax rate. The fund’s income may include the value of its assets accumulated before the fund became non-complying and would result in even more considerable financial penalties.

Penalties for a promoter: Any identified promoters of these illegal schemes will be assessed on all the fees and commissions that are received for arranging the early release of super savings and for setting up SMSFs. Additionally, if these amounts have not been included in the promoter’s tax return, penalties and a general interest charge will also be applied to any tax shortfall.

Promoters may also be prosecuted by the Australian Tax Office (ATO) and/or the Australian Securities and Investments Commission (ASIC), as these activities may involve breaches of the:
• Superannuation Industry (Supervision) Act 1993
• Corporations Act 2001
• Australian Securities and Investments Commission Act 2001.

Possible breaches may include misleading or deceptive conduct and the provision of financial product advice without an Australian Financial Services Licence (AFSL).

Both civil and criminal penalties, including significant fines and terms of imprisonment, may be imposed for these and other related breaches of the law.

To reiterate, superannuation savings are intended to provide you with financial security in your retirement and it is illegal for anyone, including yourself, to access and orchestrate the use of these funds before you reach eligible retirement age.

For more advice regarding legally accessing your superannuation savings or for any other superannuation queries contact The Quinn Group on 1300 QUINNS or click here to submit an online enquiry.

The changes are now available for public consultation and are intended to modernise the current legislation to better reflect what is actually happening in the community. Specifically, it is addressing the fact that we are increasingly seeing a larger number of bankruptcies in relation to consumers with a small amount of assets and low income levels. Where previously bankruptcy was more commonly associated with individuals who were often simply attempting to avoid paying their debts, bankruptcy is now being increasingly accessed by those who have simply found themselves having a hard time financially.

Some major items of the proposed changes include:
•  increasing the minimum debt for which a creditor can petition for bankruptcy from $2,000 to $10,000;  
•  increasing the stay period from when a declaration of intent to file a debtor’s petition is filed to when a creditor may commence action to recover debts from seven to 28 days; and
•  increasing the income, asset and debt thresholds to allow more people in financial distress to enter into voluntary debt agreements. 

In essence, the Bankruptcy Legislation Amendments Bill 2009 aims to promote proactive discussion, negotiation and remedies. This should see that honest debtors are given a legitimate opportunity to sit down with their creditors and make arrangements for the repayment of debts and creditors are satisfied that they will receive the monies that are due to them without the need to send excessive numbers of individuals bankrupt.

In light of that, the Bill also seeks to toughen the penalties in relation to fraud and other bankruptcy offences so that insincere parties cannot take advantage of the new conditions that are favourable for those who are actually in trouble.

Due to the recent events in both the global and local economic climates it follows that there are more consumers and individuals who are experiencing financial difficulty than in previous times. The introduction of changes to personal bankruptcy laws will hopefully assist those in trouble to find alternative means to get back on their feet and get their financial affairs in order. It is not ideal for the individuals, the creditors or the country as a whole to see increasing numbers of the population have to formally file for bankruptcy so the Government is using the legislation reforms to aid in the reduction of potential bankruptcy figures which were up by 11% for the last financial year when compared with the previous financial year.

In a recent interview Mr McClelland pointed out that on average a debt agreement would see the creditor receive around 76 cents for every dollar that they were owed. In comparison, where the path of bankruptcy is taken the creditor is usually lucky to receive 1.6 cents in the dollar. In the case of bankruptcy, not only does the creditor lose out but the individual will have a record of debt against this creditor and this will almost certainly affect future borrowing capabilities.

The team of lawyers and accountants at The Quinn Group are available to offer advice on a range of credit and debt situations from negotiating with creditors and debtors to administering the bankruptcy if that is required. For more information and advice contact us on 1300 QUINNS or visit our website www.quinns.com.au and submit an enquiry.

What does it mean for Consumers?
The new law is designed to protect consumers from unfair contract terms and strengthen the power of the regulators.
The “unfair contract terms” legislation, which will replace each States own laws, seeks to protect consumers from unfair terms such as unreasonable exit fees, penalty fees and “unfair” clauses that permit one party to change or cancel a contract.

As a consumer dealing with a hire car company, a telecommunications company, financial institution or even a gym, we are often presented with what is generally known as a “standard form contract”. It is usually provided as a “take it or leave it” contract, which makes no allowance for negotiation of terms, because of the imbalance in the bargaining power of the parties. Most consumers are not even afforded the opportunity to read or digest these terms, let alone consider their implications.

You may have been hit with excessive fees from banks, strange exclusions from insurance companies, excessive termination penalties for changing a mobile phone plan or the frustration of trying to cancel an unwanted gym membership. Well, the good news is from 1 Jan 2010 ASIC and the ACCC will be granted the power to look into these “unfair clauses” and have contract terms voided that are deemed to be unfair.

What does it mean for Businesses?
Standard form contracts are also common in a range of business transactions including software licence agreements, website conditions and membership agreements as well as those mentioned above. It should be noted that the new consumer protection laws that are being introduced will only apply to business-to-consumer contracts although the scheme is likely to be expanded to include business-to-business contracts in the near future. Businesses using standard form contracts, particularly for provision to consumers, will need to review their current contractual arrangements well in advance of the January 2010 start date.

The lawyers at The Quinn Group are able to help you to address factors including transparency and whether specific terms and conditions of your contract/s may cause significant imbalance between the contracting parties. These inconsistencies, if not accurately rectified could result in clauses being voided by the regulators.

For more information and advice regarding your business’ preparation for the changes or if you are a consumer and require assistance with a contract that you have signed, or are about to sign, contact us on 1300 QUINNS or click here to submit an online enquiry.