CHANGE OF STRUCTURE It is not uncommon for clients to change the structure used to operate their business. While accountants will typically be the ones providing the strategic advice surrounding a change of structure, once the decision has been made, much of the implementation will fall to the bookkeeper. A raft of practical, operational and tax consequences emerge when a structure is changed, which demands specialist knowledge of the subject matter and an appreciation of the correct bookkeeping techniques to use. BACKGROUND There are many factors that can lead to a business changing its trading structure, some of which include: Growth in the business Simplication or downsizing of the business Asset protection Limiting of liability Taxation considerations Management changes, namely the addition or removal of persons that control the operation of the business Ownership changes, such as the facilitation of additional investors Commercial / contract requirements Operational reasons Requirements imposed by lenders and financiers Eligibility criteria for government grants.The rationale for, and strategic advice surrounding, a change in business structure will usually emanate from a tax agent, accountant, financial advisor, lawyer, or business strategist. While bookkeepers and BAS agents may not typically be proffering advice to bring about a change of structure, they will be heavily involved in many of the practical implementation steps. COMMON TRADING STRUCTURES AND CHANGES OF STRUCTURE The main types of trading structures used in a business which bookkeepers and registered agents and themselves deal with are: Sole traders Partnerships Trusts; and Companies. Within each of these structures, there can also be different ownership structures at play. For example, a partnership involves 2 or more partners, but those partners could be any combination of individuals, trusts,...