NSW Business Structure for Professional Services - Sole Trader, Partnership or Corporation?

Discussion in 'Commercial Law Forum' started by WarrenTo, 23 April 2019.

  1. WarrenTo

    WarrenTo Member

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    Which one is the best business structure for professional services firms, sole trader, partnership or corporation? The traditional way is a partnership, but is it no longer viable due to unlimited liability and no separation of legal entity? What are the pros and cons of these 3 types of business structure and which one would you recommend?

    Thank you.
     
  2. Rob Legat - SBPL

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    For business structuring advice you’re going to want to see a solicitor and an accountant (for effective tax structuring), who will take into account your specific situation.
     
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  3. Tim W

    Tim W Lawyer
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    What kind of professional services?
    There are many models already in existence that serve certain fields well,
    but are less suited to others.
    For example, how you set up a medical practice might be
    different to how you set up a firm of solicitors, or a firm of architects.
     
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  4. WarrenTo

    WarrenTo Member

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    I mean professional services firms in general like accountants, lawyers and medical practitioners. Thanks.
     
  5. Rob Legat - SBPL

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    As Tim W noted, the ideal set up differs for different profession fields.
     
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  6. WarrenTo

    WarrenTo Member

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    What if I'm setting up an accounting firm?
     
  7. Rob Legat - SBPL

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    Then I’d suggest a Pty Ltd company, with a trustee shareholder arrangement (preferably also corporate). You may also want a service company holding firm assets under a lease/licence arrangement.
     
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  8. Tim W

    Tim W Lawyer
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    If you're an accountant, then you already know
    that you need proper case-specific professional advice here.
     
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  9. Rod

    Rod Lawyer
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    And best getting the right advice at the start because changing later can be hard if the 'partners' do not agree on a new structure.

    I note the accounting/holding costs of a complex structure are lower for accountants :)

    I like Rob's suggestion.
     
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  10. WarrenTo

    WarrenTo Member

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    it seems that professionals are abandoning partnership and opt for other structure, what are the reasons behind it?
     
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