All Topics / Legal & Accounting / Startup Business – TAX and LEGAL QUERY

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  • mkbonline
    Participant
    @mkbonline
    Join Date: 2012
    Post Count: 19

    This is not related to property investment but a business startup's Tax and legal question. Thought, experts here might have encountered this issue before.

    I have recently started a IT consulting company. We also do IT Technical Trainings. I plan to hire contract trainers for short term training assignments of 4-5 days. Some of these contract trainers have existing permanent jobs in other companies or are doing contract with other companies. They will take time off from their existing company to work on these short term training assignments with my company.

    My queries

    1) I want to hire these contract trainer trainers as "Independent Contractors" and want to pay them full rate and leave "Tax and Super" for them to manage themselves. (In past my wife has done freelancing work for an Australian company in similar way where this Australian will pay full rate (Big American MNC's Australian subsidiary) and leave tax and super for the freelancer to sort out

    2) How do I legally protect my company as these contract trainers who might be working somewhere else and will work for my company as well on short 4-5 days contract

    3) I have to prepare job contracts for these contract trainers as well. Any recommendation on good and reasonably prices lawyer in western sydney (parramatta area). I need a tax consultant as well. Any recommendation on that?

    Cheers,

    MKB

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    Firstly just because you call them contractors doesn't necessarily mean they are contractors. You need to get some legal advice on this and then conisder how you are going to contract with them. Terms of the contract and contracting entity etc.Contract or employment agreement with each

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    https://terryw.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://Terryw.com.au/

    Profile photo of FreckleFreckle
    Blocked
    @freckle
    Join Date: 2012
    Post Count: 1,680

    Get your accountant to get an ATO ruling. It's a grey area and there's so many variations it can make your head spin. I had a contract arrangement with a mob in WA. Their accountant tried to put the mockers on it and pay me as an employee. There had been rulings in the past where contractor status had been declined by the ATO who then demanded that the business pay out super, tax and insurances on top of the gross contract amount. 

    Profile photo of Anthony KAnthony K
    Participant
    @anthony-k
    Join Date: 2010
    Post Count: 56

    Hi MkBonline

    You need to understand the definition of a "Common Law Employee" and make sure that you DONT have one of those and have a written binding contract which is for a “desired outcome” and which includes several other important provisions.

    Then you can make a move, – and don't let the lawyers fool you and say Its Too Hard and expensive – it ain't.

    I had a client who did what you want to do for 20 years and then sold the business for $19M.

    Now I am going to upset some people but thats how it is sometimes. Lawyers tell you it's illegal to give legal advice if your not a lawyer – that is simply not true.

    The truth is this: – IT IS ONLY ILLEGAL IF YOU CHARGE FOR IT !

    You see lawyers are all about MONEY and CONTROL of their turf and YOU.

    Not about You and Your wants and needs.

    Best wishes to you all.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    Anthony K wrote:
    Hi MkBonline

    Now I am going to upset some people but thats how it is sometimes. Lawyers tell you it's illegal to give legal advice if your not a lawyer – that is simply not true.

    The truth is this: – IT IS ONLY ILLEGAL IF YOU CHARGE FOR IT !

    This is simply not true.

    Only a lawyer with a current practicing certificate can provide legal advice. In NSW the relevant legislation is s 14 of the Legal Profession Act
    http://www.austlii.edu.au/au/legis/nsw/consol_act/lpa2004179/s14.html. Not charging a fee is irrelevant.

    Anthony, have you any references to back up your claim? When you raised this issue before I challenged you and you did not reply.

    Incidently, setting up a trust entails the provision of legal advice. Only lawyers can set up trusts.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    https://terryw.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://Terryw.com.au/

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