L5 Building a Business Flashcards
Short-term considerations
- statutory requirements
- cost of establishment
- stamp duty
- income tax
Medium-term considerations
- flexibility for change
- administrative costs and resourcing
- risk management
Long-term considerations
- capital gains tax
- succession planning
- dissolving structure, “exit” the company
Sole Trader
see onenote
Owned and controlled by one person
Appropriate where:
- little business experience/business for the first time
- limited resources
- not expecting to generate substantial income in initial period
Partnership
see onenote
At least 2 people in business with a common view to making a profit
Appropriate where:
- partners have confidence in each other’s abilities
- compatibility
- loyalty
Trading Trusts
see onenote
- Entity that holds property or income for the benefit of others
- Created under a trust deed
Company
see onenote
- Separate legal entity having powers of a natural person
- ownership and management
- created by incorporation
Incorporation
Incorporation is the legal process used to form a corporate entity or company. A corporation is a separate legal entity from its owners. Corporations can be created in nearly all countries in the world and are usually identified as such by the use of terms such as “Inc.” or “Limited” in their names.
Public vs Private companies
see onenote
Issues to consider when running a business
see onenote
- have an overall strategy e.g. IP strategy
- good corporate governance
- entering into binding agreements
- funding
- location
- assets
- employees
- tax and government assistance
- advisers
Entering into contracts
see onenote
- what is a contract?
- What type of contracts does a business enter?
- Who can sign on behalf of a company?
Funding
Sources:
- personal
- family/friends
- business angels
- grants
- financial institutions/banks
- venture capitalists
- public (through public offering)
Assets
What are your assets?
- tangible
- intangible
Does your company own or have any right to use the assets?
Do you have adequate insurance to protect those assets?
Intellectual capital, ideas employees carry in their head
Employees
- employee contracts
- who owns intellectual property created by an employee?
- team with varied skills - science, finance, legal, regulatory, clinical development
What is your HR plan?
- where do you see the company?
- what skill sets do you need?
Tax and Government Assistance
see onenote
- rates of tax
- is your business registered for GST?
- PAYG and income tax payments for employees
- Don’t forget Fringe Benefits Tax issues
- Are you eligible for R&D tax incentives
