This post is one in a series designed to help SME businesses benchmark their business and create a best practice business improvement plan across all of their business processes. You can find the links to the full series here.
Why is it important to ensure you have the right business, legal and financial structures in place?
- Businesses need to be structured appropriately to protect your personal assets from business claims and liabilities.
- Valuable assets in your business may need to be quarantined in a separate business entity to protect them against the debts of the trading entity.
- You owe it to your family and their financial security to structure your business, legal and financial affairs in the most efficient ways possible.
How does your business measure up?
Here’s a checklist to help you determine that you have the right business, legal and financial structures in place to ensure that your business and family are protected and to achieve your business and personal goals.
- We understand the advantages and disadvantages of our type of business structure.
- We have a business structure which appropriately deals with tax minimisation, i.e. the best use of available tax benefits.
- We have a business structure which protects personal assets of the proprietors from claims against our business.
- Our business structure provides flexibility for the distribution of income earned by the business.
- Our significant business assets, for example our business premises, valuable equipment and intellectual property are held in separate legal entities.
- We have a well drafted shareholders agreement or other appropriate partnership agreement in place.
- We have a suitable business succession agreement, which addresses the transfer of a proprietors interest and funding for the transfer, should a proprietor die or become totally and permanently disabled.
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