So you’re considering buying a business? Buying a business from somebody else is likely to be one of the biggest financial transactions that you will ever undertake. It makes sense to invest time and money to ensure that you acquire an asset that lives up to your expectations.
Our role is to help you appreciate the issues and make an informed judgement as to whether or not to proceed.
We have provided some useful information, including:
- Compliance issues with starting a business
- Structuring your new business
- Buying a business and due diligence procedures
- Employing staff and your responsibilities as employer
- Tax and Corporate issues with closing a business
The first step in acquiring a business is to ensure that you have the correct advice. It is easy to structure a business correctly form the beginning, it’s a lot harder to deconstruct the structure to suit your situation after the fact.
If you plan to buy an existing business, carefully analyse both the advantages and disadvantages. One advantage is that a good business history can increase the likelihood of a successful operation and ensure that finance is easier to obtain. Potential disadvantages can be overestimating the goodwill figure and a poor public image inherited from the previous owner.
As a prospective business owner you should (with professional assistance) determine the current worth of the business and its future prospects. Some important considerations are:
- Vendor - reason for sale of business
- Sales - patterns, trends, customer base, current suppliers
- Costs - fixed and variable costs, staff costs
- Profits - analyse financial records, future cash flow and profitability
- Assets - identify and check all assets, including intellectual property and leasing arrangements
- Liabilities - outstanding debts, refunds and warranties
- Purchase agreement - review carefully
- Tax - GST, Capital Gains Tax, stamp duty implications
- Legal issues - leases, business structure.
Once you have decided that this is the business for you, you then need to consider your tax and legal obliagitions.
There are many issues you will encounter when establishing your business including:
- Decide on a business structure
- Registering your business name
- Registering your trade mark
- Registering your company.
- Registering for an Australian Business Number (ABN)
- Registering for the Goods & Services Tax (GST)
- Registering for a Tax File Number (TFN)
- Registering for Pay As You Go (PAYG) withholding.
- Buy or lease business premises
- Order & purchase stock
- Arrange insurance
- Set up record keeping & accounting systems
- Hire staff
Understanding your taxation obligations is important when starting up a new business. Various federal, state and local government taxes and rates can apply, depending on the size and location of your business.
A number of federal government taxes apply to business, including Goods and Services Tax, Pay As You Go withholding tax and Fringe Benefits Tax. State government taxes that may apply to your business include pay-roll tax, land tax, duties and debits tax.
If you require assistance, please contact us on (02) 8264-0755
All representations and information on this site is general in nature and should not be relied upon as advice. If you require specific advice please contact us.