Everybody contemplating entering into business must seriously consider the structure of their new venture. The adverse outcomes stemming from the sale of your business, transfer of your business or its insolvency can result in devastating financial and tax consequences for stakeholders who are not properly advised of the pitfalls. Tax effective business structuring represents legitimate business planning and is performed in tandem with considering other business outcomes.
The dominant commercial purpose for entering into a business is the generation of a revenue and profit stream. Your rights entitle you to structure your business so as the stakeholders can validly minimise the provision of taxation both during the going concern phase as well as on its ultimate sale.
We work closely with you in determining the best structure in which to house your business venture i.e.
- Company (Pty Ltd or unlisted public);
- Trust (discretionary, unit or hybrid trust);
- Partnership (limited or ordinary partnership);
- Sole proprietor etc
Different structures have their advantages and disadvantages – the challenge is to correctly align the most suitable structure to your business in line with your immediate and long term objectives.