All Topics / Legal & Accounting / Operational Aspects of DT with Corporate Trustee

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  • Profile photo of immakittyimmakitty
    Member
    @immakitty
    Join Date: 2007
    Post Count: 2

    Hi All,

    I was wondering if anybody could provide advice on what the operational/administrative aspects of operating a discretionary trust with corporate trustee are? I don't intend for the company to make any money – just administer the trust.

    Specifically:

    a. Can (should?) you have the company address as your home address?

    b. Do you register for GST?

    c. Do you need to do a monthly BAS?

    d. Do you need insurances? and if so, which/what?

    e. Is there anything special about the company tax return, or is all the detail in the trust's?

    f. Does the company need any special licenses or director's qualifications to administer property in the trust?

    g. One director or two?

    h. What software is recommended for bookkeeping?

    i. Do you need a separate business phone line and fax?

    It would be greatly appreciated if some kind soul could help with the above. Thanks!

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,190

    My answers:

    a) you can. Bear in mind ASIC records are publically searchable.
    b) Depends what your trust is doing. If residential property rentals, then there is generally no need.
    c) Depends if you register for GST
    d) Normal building insurances. If running a bsuiness you may need professional indemnity and public liability. If running rentals, maybe landlords insurance
    e) Company will need to do a separate tax return as well as the trust needing to do its own return. Company return is usually easy as there are no transactions – Trustee company shouldn't do anything other than act as trustee.
    f) not normally, but it depends on what business your trust does. If it manages its own property, then none needed, but if it manages other's properties then you would need a real estate licence etc.
    g) 1. Why have 2 and double the risk?
    h) excel is all that is needed.
    i) Depends on the business. If you will be getting calls, then you may need a dedicated line. For the faxes look as the various web based faxes on offer. You can send fax via email and receive via email.

    I am not an accountant, so don't believe anything i have written without verification.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of Dan42Dan42
    Member
    @dan42
    Join Date: 2008
    Post Count: 620

    a) ASIC requires that the minute book of the company be available to the public, at its 'registered office'. A lot of companies have their registered office as their accountants office, so ASIC correspondence goes straight to the accountant. Your 'trading' address would be your home or business address.
    b) You don't need to register the company for GST, as it isn't trading. The trust may need to be registered.
    c) No. If the trust needs to be registered, then it would submit quarterly BAS.
    d) Depends on what you are doing.
    e) A company acting solely as trustee would not need to do a tax return. All the information is in the trust.
    f) Not that I'm aware.
    g) I would have one director.
    i) There is no requirement to have a separate company phone line.

    Profile photo of psrpropertypsrproperty
    Participant
    @psrproperty
    Join Date: 2020
    Post Count: 0

    Seeking advice from experienced folks who have operated Corporate Trustee structure.

    About Question (a).

    I want to set up a company as the trustee for the trust. As you know, for beginners the company would run from home, as I don’t have the budget to rent a commercial office to run the company. And all the decisions would be run from home anyway.

    I am thinking of using a virtual address (of which I can rent from) for the Principal of Business Address for my company. But I am not sure if I can do so, because de facto I am making decisions from home, not at the virtual address.

    My concern is: I want to avoid using my residential address as Principal of Business Address, for safety and privacy reasons. As the Principal of Business Address is public and searchable on Company Registers.

    My question is: Can anyone please share their experience on this? How can I avoid using residential address, whilst not renting a commercial property to run the company? Or a virtual address can actually work?

    Added question: Can the Registered Office Address be my residential address? I see the advantage of it in receiving communications the quickest, instead of waiting for accountant/lawyer firms to forward them to me.

    Profile photo of Steve McKnightSteve McKnight
    Keymaster
    @stevemcknight
    Join Date: 2001
    Post Count: 1,750

    Hi there,

    As outlined below, your company will need a registered office (CORPORATIONS ACT 2001 – SECT 142), which must be a physical address (i.e. where notices can be sent). It cannot be a PO Box (CORPORATIONS ACT 2001 – SECT 100 (c)), but it can be a home address.

    The requirements of a Registered Office are (CORPORATIONS ACT 2001 – SECT 144) are:

    Company’s name must be displayed at registered office etc.

    (1) A company must display its name prominently at every place at which the company carries on business and that is open to the public. (2) A public company must also display its name and the words “Registered Office” prominently at its registered office.

    Interestingly, CORPORATIONS ACT 2001 – SECT 145 goes on to say that only a public company needs to be open to the public.

    So, it seems that a registered premises for a PTY LTD company needs to identify that it is such, but need not be open to the public.

    If you don’t want to use your home address, and you don’t have an ‘office’ address, the common practice is to nominate the office of your accountant or solicitor. Note that you should have written permission for this arrangement. See CORPORATIONS ACT 2001 – SECT 100.

    Assuming you are on good terms with your adviser, you shouldn’t need to pay anything.

    All the best,

    – Steve

    Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
    https://www.propertyinvesting.com

    Success comes from doing things differently

    Profile photo of psrpropertypsrproperty
    Participant
    @psrproperty
    Join Date: 2020
    Post Count: 0

    Hi Steve,

    Thank you very much for the detailed reply.

     

    So to register a proprietary limited (Pty Ltd) company, I am required to supply:

    1. Registered Office Address

    2. Principal of Business Address

     

    About the Principal of Business Address, my accountant said it cannot be their address as I don’t conduct the company’s business at their office, which makes perfect sense.

    Q. What other option have you heard/know of if not using home address as Principal of Business Address?

     

    I guess the worst comes to the worst, I’d use home address for both Registered Office Address & Principal of Business Address.

    Q. Do you know any implication of using home address other than privacy/security concern?

    Q. Have you heard/know of many people using home address for both addresses for Pty Ltd company?

     

    Thank you greatly.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,190

    The directors and shareholders of the company must also list their home addresses and these are publically searchable too. Most of my clients use their home addresses for both the registered office and principal place of business.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of psrpropertypsrproperty
    Participant
    @psrproperty
    Join Date: 2020
    Post Count: 0
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