Business structure for property renovation business

My friend and I have decided to start a new property renovation business and would like to hear the opinions of forum members in regards to the type of business structure that is most suitable for our situation.

The plan is to complete 2 renovation projects in the first year, part time, whilst working in our current jobs, for a net profit of $120K. The properties will be renovated in the shortest amount of time possible and then sold for a cash profit.

Our goal is to increase the number of properties renovated per year with a view to exit our current jobs and work full time on renovation, finances permitting.

Our current financial situation is:

– I’m the sole income earner of the family, earning $90K pa.
– My friend earns $120K pa and has negatively geared property that reduces his taxable income down by approx $10K pa.

We are currently thinking of a partnership business structure, but since the tax is calculated based on our individual incomes we are concerned the final taxable totals would push us into a high tax bracket so amounting to more tax.

The questions we have are:

1. Do we create a partnership, where my friend and I are the partners, with a 50:50 split?
2. Do we create a partnership, where are wives are the partners and split the profit 50:50? Our wives earn only a small amount in comparison to our income.
3. Do we just create a company or trust?
4. Do we start off with a partnership (as in 1 or 2) and switch to a company later?

We realise that a good accountant should be able to advise us which options are best, however we would like to hear from the community here first.

Can anyone recommend a accountant to assist in the Sydney area? Are there any accountants here on the forum?

• This topic was modified 9 years, 2 months ago by  123reno.
• This topic was modified 9 years, 2 months ago by  123reno.
• This topic was modified 9 years, 2 months ago by  123reno.