Linton has worked with a wide variety of professional service providers, from marketing, lawyers, real estate, agencies and consultants. Although the sector is quite diversified, businesses in this area are often faced with similar challenges and opportunities. We understand, from a practical perspective, what the crucial issues and key drivers are in ensuring your business is able to provide high-performance professional services within your industry.

As your firm grows you need an advisor that understands these complexities.

We take to grow with you and determine your short, medium and long-term strategic direction. Doing so enables us to provide concise, relevant advice to help you achieve your goals.

Areas in which we can assist any professional firm in are:

  • Computing optimal charge out rates for employees and consultants
  • Salary Packaging and executive remuneration
  • Reporting and review of staff profitability
  • Review of profitability per partner
  • Establish bonus pool for key individuals
  • Building KPI reports specifically reporting on key drivers with targets and industry benchmarks
  • Assisting in Growth, Succession and Exit strategy
  • Analysing of monthly results and Key Performance targets against industry best practice
  • Mergers and Acquisitions
  • Business Valuations

 Common Q&A

Q) Should I commence my Business as a sole trader, partnership or Company?

A) There are always Pros and Cons in terms of various structures. To keep it short and simple please note the following –

A Sole Trader – Most people commence their business as a Sole Trader because it offers low-cost, easy entry. However, the disadvantage is that you are totally responsible for the debts and liabilities of your business as you are literally “the Business.” Thus any personal assets will be exposed under the Business risk. Furthermore, the business income might be taxed at 49% if the business is performing exceptionally well

A Partnership – is when there are more than 2 people sharing the ownership of the business. Partnerships can be formed by developing the relevant partnership agreements. It is essential to have an agreement in place to articulate each partner’s contribution to the business which includes KPI’s, financial resources, expertise and profits and losses sharing model. The profit is usually distributed to the Partners and taxed at individual rates. The disadvantages are that your personal liabilities are not only for your own debts and business decisions, but also for the partnership debts incurred and business decisions made by your partner(s). In addition, partnerships come with the risk of disagreements and disputes between partners.

A Company – is usually made up of shareholders (Investors of the business) and Directors (people who manage the Business). The benefits of setting up the Company structure is to limit any financial liability to the Company assets only. Furthermore, the Company structure is more flexible in capital raising or admission of new owners. However, a Company is required to be registered with ASIC and key information must be disclosed to the public. The compliance and administration is also higher. Any losses incurred in the Company cannot be offset against the individual income.

Q) I would like to offer shares to my Key Staff for retention purposes. What would be the tax implications?

A) Employee Share Schemes has been a popular way to retaining the Key Staff and furthermore a couple of new rules have been introduced recently. From 1 July 2015 there are new rules for the tax treatment of employee share schemes, including tax concessions for start-up companies.

Employee share scheme changes allow employees to now own up to 10 percent of shares in their employer’s company. If employees choose to participate in a tax-deferred scheme, the deferring point has also increased from 7 to 15 years.

Under the new rules, if shares are acquired in a start-up company at a discount of up to 15 percent (relative to market value), then the discount is exempt from capital gains tax and income tax. Any capital gains tax is calculated on the market value when the share was acquired. It is not calculated on the discount price they paid, as long as that discount was 15% or less than the market value.

To offer an employee share scheme with start-up concessions, employers must:

  • be an Australian resident company
  • have an aggregated turnover of under $50 million
  • be incorporated for less than ten years
  • have no equity interests listed on an approved stock exchange.

Linton has worked with a wide variety of professional service providers, from marketing, lawyers, real estate, agencies and consultants. Although the sector is quite diversified, businesses in this area are often faced with similar challenges and opportunities. We understand, from a practical perspective, what the crucial issues and key drivers are in ensuring your business is able to provide high-performance professional services within your industry.

As your firm grows you need an advisor that understands these complexities.

We take to grow with you and determine your short, medium and long-term strategic direction. Doing so enables us to provide concise, relevant advice to help you achieve your goals.

Areas in which we can assist any professional firm in are:

  • Computing optimal charge out rates for employees and consultants
  • Salary Packaging and executive remuneration
  • Reporting and review of staff profitability
  • Review of profitability per partner
  • Establish bonus pool for key individuals
  • Building KPI reports specifically reporting on key drivers with targets and industry benchmarks
  • Assisting in Growth, Succession and Exit strategy
  • Analysing of monthly results and Key Performance targets against industry best practice
  • Mergers and Acquisitions
  • Business Valuations

 Common Q&A

Q) Should I commence my Business as a sole trader, partnership or Company?

A) There are always Pros and Cons in terms of various structures. To keep it short and simple please note the following –

A Sole Trader – Most people commence their business as a Sole Trader because it offers low-cost, easy entry. However, the disadvantage is that you are totally responsible for the debts and liabilities of your business as you are literally “the Business.” Thus any personal assets will be exposed under the Business risk. Furthermore, the business income might be taxed at 49% if the business is performing exceptionally well

A Partnership – is when there are more than 2 people sharing the ownership of the business. Partnerships can be formed by developing the relevant partnership agreements. It is essential to have an agreement in place to articulate each partner’s contribution to the business which includes KPI’s, financial resources, expertise and profits and losses sharing model. The profit is usually distributed to the Partners and taxed at individual rates. The disadvantages are that your personal liabilities are not only for your own debts and business decisions, but also for the partnership debts incurred and business decisions made by your partner(s). In addition, partnerships come with the risk of disagreements and disputes between partners.

A Company – is usually made up of shareholders (Investors of the business) and Directors (people who manage the Business). The benefits of setting up the Company structure is to limit any financial liability to the Company assets only. Furthermore, the Company structure is more flexible in capital raising or admission of new owners. However, a Company is required to be registered with ASIC and key information must be disclosed to the public. The compliance and administration is also higher. Any losses incurred in the Company cannot be offset against the individual income.

Q) I would like to offer shares to my Key Staff for retention purposes. What would be the tax implications?

A) Employee Share Schemes has been a popular way to retaining the Key Staff and furthermore a couple of new rules have been introduced recently. From 1 July 2015 there are new rules for the tax treatment of employee share schemes, including tax concessions for start-up companies.

Employee share scheme changes allow employees to now own up to 10 percent of shares in their employer’s company. If employees choose to participate in a tax-deferred scheme, the deferring point has also increased from 7 to 15 years.

Under the new rules, if shares are acquired in a start-up company at a discount of up to 15 percent (relative to market value), then the discount is exempt from capital gains tax and income tax. Any capital gains tax is calculated on the market value when the share was acquired. It is not calculated on the discount price they paid, as long as that discount was 15% or less than the market value.

To offer an employee share scheme with start-up concessions, employers must:

  • be an Australian resident company
  • have an aggregated turnover of under $50 million
  • be incorporated for less than ten years
  • have no equity interests listed on an approved stock exchange.

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