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How your accountant and lawyer can work together to help your startup
Updated: 7 December 2019
Did you know that your accountant and lawyer can work together to help your startup? Below are some handy tips about how both can help.
Your business structure
An accountant or a lawyer can help you set up the start-ups business structure.
Below are the 4 business structure as you can choose from in Australia.
- sole trader;
- trust; and
Now, it's a good idea to have your structure set up before you start entering into business contracts.
Getting through the first 6 months
Both a lawyer and accountant can help you to prioritise your setup work in your first 3 to 6 months when it's most intense. Here’s an idea of the sort of work you may need to complete:
- registrations and business licences
- purchasing business supplies
- entering into vendor and supplier contracts
- internal agreements like founders agreements & shareholder agreements
- hiring staff, issuing worker contracts, payslips and record keeping
- registering for GST and PAYG
- lodging business activity statements
- setting up and maintaining a book-keeping system
- entering into supplier contracts
- leasing a premises and business supplies and
- keeping company records
Before you enter contracts
If your accountant has set up your business structure and it involves a trust, or you’re just unsure, you should ask your accountant which structure to use before you enter a contract.
Using the right structure is important for tax planning. For example, it may make more sense to use one particular structure over another.
Also, shareholder agreements usually have financial covenants about the state of the company’s finances, and an accountant can help you check company financials to confirm they are correct.
Below are some examples of financial covenants.
- the books and Accounts of the Company truly and fairly reflect the Company’s transactions, finances, assets and liabilities;
- the Company has lodged or filed all tax and duty returns for all taxes including goods and services tax, income tax, sales tax, fringe benefits tax, payroll tax, group tax and WorkCover levies where applicable and has paid all amounts owing as they fall due and has paid all employees superannuation entitlements to the appropriate trustee where applicable.
- no claim has or will be made against the Company for payment by the Company pursuant to the provision of the Income Tax Assessment Act 1936 of any tax;
- the Company has met all deadlines for repayment of its debts; and
- no petitions, notices or proceedings have come to the Company’s notice, which could result in it being wound up. No orders or resolutions have been made or passed to place the Company in liquidation or provisional liquidation.
Preparing and keeping company records
Now, when you first set up your company, you are going to need some company records that either an accountant or lawyer can prepare for you. Below are examples of these records.
- officeholder register - a list of the directors and secretaries
- director consents
- share applications
- share certificates
- register of shareholders (aka members).
Make the most of your accountant and lawyer’s time by getting their help with your:
- business structure
- prioritising your administrative setup tasks
- contracts; and
- keeping company records.
Do you have any questions about setting up your business?
A good business lawyer can give you some guidance about how your accountant can help you.
I wish you success in your ventures!