Are your business assets protected?
As you know, asset protection for business is as important as managing them and protecting your future is just as important. If not more so, especially whilst building for your future.
There are many ways to minimise your risk whilst reaping the rewards which we’ve briefly outlined below;
- Increase lending limits when a business is profitable for future draw down if required
- Lock in interest rates
- Stand alone investment loans not secured to other investments or home
- Private assets moved to the partner or spouse with the least risk
- Cash on hand
- Income protection insurance
- Landlord insurance
- Pre nuptial agreements and;
- Preparation of wills
Structure asset protection for your business in a manner that will always shield your assets from mishap.
Intellectual Property (I.P), copyright and trademarks….
…should also be protected by separating them from the business so they are not at risk, and it is also important that if they are ever sold the entity used should be tax efficient for the most beneficial outcome.
Ultimately there are many ways to protect your intellectual property (IP). Essentially an IP strategy would be best and should be designed and integrated into your business plan moving forward.
It is not however always best to formally register your IP. You may find that having the product reach the market quickly is better than patent protection whereas other IP may be critical to the success of your business and would benefit greatly by registration. Your IP, your business, your choice!
Something to keep in mind: Inventions and designs cannot be registered unless they are completely new, in other words, no design application and no convention explaining your new design.
Effective business advise to keep your business running well into the future
Building your business takes more than just asset control though, it requires tax efficient practices and procedures, Control strategies, insurance coverage and up to date knowledge on employment law and its requirements.
* Tax efficiency generally starts with your employees. You have an option to pay allowances to workers, provide fringe benefits i.e. lap tops and other work related items. You also may salary sacrifice pre tax superannuation contributions for your workers (and yourself) should they request it, making the remuneration as tax efficient as possible.
* Introducing control strategies for your business’s expenditure ensures efficiency, minimises losses and identifies leakages of funds or assets whilst keeping expenses at a minimum.
* Strategies are designed to meet certain criteria such as, accuracy, validity, handling errors, disclosure and timely preparation of financial reports conforming to general accounting principles. All internal controls whether they are administrative or accounting, are linked to a financial consequence. Many cash based businesses have closed their doors due to the lack of control of cash.
* Insurance cover is essential and Work cover in most cases is compulsory, providing to an injured worker weekly benefit payments, medical treatment and rehabilitation, legal costs and in some cases lump sum compensation. The cost of this can run into the hundreds of thousands of dollars.
If you have not registered for work cover or have neglected to pay the appropriate premiums and an employee suffers an injury at work then all costs that would have been covered by workcover will become your responsibility, along with penalties from work cover for failure to register. Be sure that all employees are covered, including contractors who supply labour. Without this cover, the risk to your business and its assets can be detrimental.
*There are many aspects to employment law and requirements for both employees and employer and the importance of this cannot be understated. As an employer you must know the modern award rates you and your business are covered by.
Arrangements should be in place to ensure you are compliant with National Employment Standards (NEO), record keeping and pay slip requirements. You need to be aware of your options when it comes to enterprise agreement and understand bargaining in good faith when negotiating the agreement. Be up to date with small business fair dismissal codes if terminating an employee and importantly, your business must have all elements in place to prevent unlawful dismissal claims. TJD Accounting Services will source an advisor to suit your business.
Employment law also covers directors. Directors have a legal obligation and responsibility to ensure that requirements of the Australian Taxation Office with regards to PAYG withholding are met at all times. The consequences for not conforming to standard regulations are failure to lodge notifications, issuing an assessment or default assessment and referring the matter for prosecution. Financial penalties are enforced by the ATO and directors who have failed in their obligation and responsibility become personally liable. It is always better to address these issues sooner rather than later.
Do you depreciate your assets?
Further to protecting your assets, for those of you who own and use assets for the purpose of income producing, such as cars, furniture, fittings and machinery, depreciating your assets that have an effective life is valuable in providing more cash in your pocket. The cost of the assets used for assessable income, are over time written off via tax deductions. An example would be a building that is ageing and wearing, the Australian Taxation office allows for part claims for the property each year as a deduction.
If you have not sought the correct advice where your assets are concerned and their depreciation allowances, then the potential losses to you financially can run into the thousands along with all your hard work building for the future. Contact TJD Accounting today to check the health of your assets.
TJD Accounting Services
319 Keilor Road