Engaging a lawyer early in the process of establishing your company and at the beginning of each financial year can help you make informed decisions that provide you with the best tax planning for your business and personal financial goals.

A lawyer with experience in dealing with company tax can:

• provide comparisons between companies and other business structures and explain the advantages and disadvantages of each for your particular business;
• advise you on eligibility criteria for small business concessions, incentives and allowable deductions;
• recommend ways in which your company can manage taxation obligations when distributing profits;
• help you draft payment and loan or loan forgiveness agreements to avoid a ‘deemed dividend’ being created;
• advise you on the complexities of payments to shareholders and their associates in beneficiary companies where a trust is involved;
• keep you keep up to date with any changes in company tax law that may affect you or your business;
• assist you with any appeal or objection to a tax assessment made by the Australian Taxation Office (ATO);
• advise you on your rights if a demand for documents is made by the ATO; and
• if the ATO does demand documentation your lawyer can assert legal professional privilege which limits the Commissioner’s powers to demand such documentation.

The earlier you engage a lawyer when establishing a new company the more efficient your planning and decision-making regarding tax can be. Mistakes can be avoided by having a trusted and skilled advisor who can provide prompt advice. Having someone guide you through the complexities of company tax law can also save you substantial time and money both at the beginning but also as you grow and wish to distribute profits from the company.