Are you ready for a change in your business structure? More importantly, is your business ready for the change?
Nitschke Nancarrow managing partner Kym Nitschke has five pointers that you should reflect on before making any radical business moves.
Many businesses share a similar life story: sole trader turns into a massive company or profitable trust.
Things usually go this way because the growth of a business prompts its owner to change up the structure.
But things can go terribly wrong if you as the business owner aren’t prepared for the responsibilities. You’ll have many details to look over, it can be easy to miss something. Here are a few points you should keep close in mind before you completely change your business structure.
1. Move Your Licences
Most businesses require some kind of licence to operate legally. Whether building, medicine, food service, hospitality or plumbing, there’s a good chance your industry requires you to maintain at least one valid licence. Be very careful to ensure that any licences you do have are transferred to your new business entity.
2. Don’t Forget To Transfer Your Insurance Cover
You’ve done well to maintain protection for your business in the past. But don’t make the mistake of assuming that protection goes with you when your business structure evolves. Check your insurance policy to see what coverage extends to your new entity and what further benefits you may need to invest in. You don’t want to wait until something bad happens to find out that you don’t have the insurance cover you once did.
3. Switch Over Your Assets
Your old entity may have made use of some major assets, such as vehicles. Make sure that the assets themselves and their registrations are fully transferred to your new business name.
4. What About Your ABN?
Use ASIC Connect to transfer your business name to a new ABN. Your previous ABN will no longer be used, so be sure to update all of you records.
5. Amend Legal Agreements
Did you have any legal agreements executed under your former entity? Think carefully about whether these will still apply under your new structure and what new forms need to be filled and signed. There’s a good likelihood that old agreements will need to be amended.
So before you jump right into restructuring your business, contact a financial expert for advice. At Nitschke Nancarrow, you’ll get the best support to make your business transition a successful one.
– Kym Nitschke