There are a range of business structures an owner can choose to use for their organisation. However, as their operations grow, sometimes the initial structure will need to be legally changed.
For example, an enterprise that began as a sole trader or a partnership will often reach a point where the best option is to register as a fully fledged company. In other situations, a business may want to move to a trust arrangement in order to preserve this asset for future generations, for example.
If you are considering making this shift, among the most important legal considerations is to consider the taxation and Transfer duty implications of the change. It is also important to consider any changes necessary to any documentation which is currently in place for your business. Agreements with customers, suppliers, financiers etc will all need to be changed.
If your current business is a partnership with a Partnership Agreement in place, this document will need to be replaced in order to transition to a new corporate structure.
It will also be necessary to look at your trademarks and branding materials in case these need to be transferred to further reflect any changes in the composition of your company. Businesses will also need to source a new Australian Business Number, as the current one will be tied to the legal form your organisation currently has.
When deciding whether or not to change the legal structure of your business, the most important thing to consider is which direction you want your enterprise to take, and therefore which structure is going to help achieve this. In some cases, it may be that your current form is the most appropriate, given the objectives you have for your enterprise.
If you would like to learn more about how to revise the structure of your business, make sure to consult with a commercial lawyer. They will be able to provide expert advice on the transition to a new corporate structure and the legal changes that will come with this move.