Image Courtesy of Halston Bec

Registering a Business Name

Anyone can decide to establish a business. All you need is a product or service that you provide for another person and you can start earning through your profits. Although a business can run fine without a registered name, doing so will be a smarter option.

Image Courtesy of Halston Bec

Image Courtesy of Halston Bec

Registering a business name entitles you to these benefits:

  • Avoid cases when you might lose the name you once intended for your business by someone who registers the same name while using the credibility of your product or service.

  • Enables you to open a bank account with your business name. Most users nowadays trust more in depositing or paying in corporate bank accounts rather than individual ones.

  • Costumers will trust your business more since you are registered.

  • Legality of your business as recognized by your country’s government through certificates.

  • Establish the uniqueness of your business that might stand out among other related businesses.
  • Enables you to have a loan and process it faster.
  • Having a legal protection against others who might commit fraud against you.

With those benefits, it’s pretty much obvious that registering a business with the state or local government to complete business transactions is a smart choice especially for a new entrepreneur.

Now, creating a business name is not really as easy as naming a newborn child. Multiple factors come into play such as coming up with a name that can easily be recalled by consumers, the kind of product or services that you’re offering in your business, its features and usage, and other benefits that consumers can experience from using it. It sounds heavy but this is just one facet of what you need to consider when naming your product or brand.

The other end of this equation involves you to imagine yourself in the outlook of the consumers. Questions like “how is the product useful to me?” and “what benefits can I get from using it?” must be answered. Adding that to the list of other competing businesses that offer the same product as you do, it would really give you a headache. But the perks of returns when you got this so right are really worth it. These are all pointers that you need to look into if you want to get a share of the market and increase sales production.

To help you get started in registering your business name, here are a few steps:

  1. First and for most, have your research such as where can you find the different directories in your pursuit of registering your business name. This is to avoid the hassle of walking around randomly and wasting reasonable amount of time.

  2. Fill up all the required information stated in the form. These are usually your business details – business location, and TIN, owner’s detail – age, citizenship, birth details, valid IDs, and certificates to engage business if you’re a foreigner of that country.

  3. Submit the form for checking to look for any existing businesses that has the same name as your business. If you’re lucky, then you can have the name. If not, try using your 2nd option or think for another. You can also check it online if the office allows it.

  4. Pay all of the dues required. This might cover the dues for your clearances in your place, surcharges against you and other forms of payments present.

  5. Once completed, you will just have to wait for the approval of your business name.

With just following these easy steps, you will be able to have the name of the business that you want. Always remember that naming your business might not guarantee a boost for it but it sure entitles you to a legality that will benefit you far more important than the profit in the long run.

To know more information about registering a business name, try to visit the sites responsible for things like this according to your country. In Australia, you can visit the website of the Australian Securities and Investments Commission for further details. But if you have time for having a conversation with a costumer’s service representative, you can try calling the office or visiting them.

Image Courtesy of Shane Mackintosh

Why You Should Register for GST

One of the basic tasks of each businesses is to register for the Goods and Services Tax (GST) imposed by the taxation office. GST is a tax based on the consumption of goods and services and is built into the amounts charged for these items. This means that the tax is only levied on the import of goods as well as nearly all supplies of goods and services except for the sale and lease of residential properties, the importation and local supply of investments of precious metals and the provision of most financial services.

In some countries, GST is termed as the Value Added Tax (VAT). Currently, this is placed at 10% of the corresponding item.

One of the confusing things about GST is on why should businesses should register to it. Before we take a further plunge into this topic, let’s first lay down who are the ones required to register for it.

Most of the reasons to register for a GST is due to your taxable activity. A taxable activity is any activity undertaken continuously by a business, manufacturer, trade, professional, associate or club. This would include the individuals who supplied or plans to supply the goods and services for money or for some other compensation or reward, but not necessarily for a profit. These activities do not include:

  • Working for salary or wages
  • Being a company director
  • Recreational activities
  • Private transactions
  • Exempt supplies activities

Now that we’ve defined what a taxable activity is, here are ones who need to register for a GST.

  1. The annual turnover of taxable activity exceeds $75000
  2. Your taxable activity turnover is expected to go over $75000 for the next 12 months
  3. Even of your turnover is less than $75000, if you charge GST in your prices, then you must register for it.

In support to naming those who can register for a GST, we’ve also laid down a list of those who should not register for a GST. A GST can be very tiring for your part since it would mean additional administration work and reporting which will be submitted to the taxation office such as ATO in mostly a periodic basis. So, here is the list.

Image Courtesy of Shane Mackintosh

Image Courtesy of Shane Mackintosh

You are not obliged to register for it if your GST exceeds $75,000 because you only sell a plant or any capital assets while you are:

  1. Terminating an existing taxable activity
  2. Perpetually reducing the scale of any taxable activity
  3. Replacing the plant or assets

Now, we are ready to give an answer as to why you should register for a GST.

  1. GST will increase the exports – GST was implemented so that businesses will pay less when they purchase goods to resell. In other words, most of the suppliers will dodge the cases when they have to pay for the manufacturer’s sales tax. Eventually, all of us will think that selling our goods and services within our country is better compared upon testing the waters abroad. With this, the cost of exports decreases so you’ll not only help in stimulating the export products in our country but also, you can help in bringing more money for the country.

  2. Simplification is its innate description – GST is very easy to calculate compared to other form of taxes that depends on the different tax rates of different products. With this, you’ll be assured that remaining in compliance with regards to tax concerns is easy for your business as well as for the government.

  3. It will reduce the cost of compliance – With regards to your business with a single broad tax, compliance will be easier and it reduces the cost of it. As for businesses with multiple divisions, inefficiency due to the duplication of efforts to remain in compliance can be prevented. So if your business is either of the two, it would mean that you can generate savings that can be passed on to your consumers. Well, you could also retain the profit and use it to expand your business, hire new employees or increase the paycheck of your previous employees.

  4. It will lower the income taxes – Since GST allows taxes to be distributed equally across the board, the government can reduce its operating cost at the same time. With this, the cost associated with identifying the type and managing the disputes of the tax is minimized. In return, the government can lower the income taxes at its discretion, and for sure you’ll be greatly affected with this benefit.

And that’s why we should register for a GST. In its broadest sense, GST is implemented for the country’s welfare. So start assessing your business if you really need to register for a GST.

Learning and Experience Requirements For Registered BAS Agents

The Australian Tax System requires each businesses to make a report of their taxes via the use of a single compliance form called the Business Activity Statement. To learn more click here, or alternatively let the bookkeepers Sunshine Coast help you.

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The Business Activity Statement (BAS), a document being issued by the Australian Taxation Office (ATO), has been designed to provide a statement that summarizes the total taxation obligations of the businesses in their country. It is normally issued on either a monthly or quarterly basis depending on what the applicant prefers.

The Business Activity Statements lists the Goods and Services Tax (GST), Pay As You Go (PAYG) income tax installment, Fringe Benefit Tax (FBT) installment, Luxury care Tax (LCT), Fuel Tax Credits, Pay As You Go tax withheld, Wine Equalization tax, and installment notices for Goods and Services Tax (GST) and/or Pay As You Go (PAYG) installments issued to the businesses. The said form aims to simplify the transaction of each business in reporting and paying their due taxes. The transaction is then held by a BAS Agent registered with the Tax Practitioners Board.

A non-registered BAS Agent cannot charge a fee or receive any amount of money or some other compensation if he/she provides a service which is of BAS nature. According to the Tax Practitioner Board of the Australian Government, these are the services that may be considered as of BAS nature.

    1. Working out and advising about a client’s liabilities, obligations, or entitlements under a BAS provision.
    2. Dealing with the Commissioner of Taxation, in relation to a BAS provision, as a representative of a client.

Situations where it is reasonable to expect that the client will rely on tax agent services to satisfy liabilities or obligations, or to claim entitlements that occur under a BAS provision.

To become a registered BAS Agent, certain requirements must be met. The basic requirements are as follow:

  1. The applicant must be at least 18 years of age prior to his/her application
  2. The applicant must be a “fit and proper” person
  3. The applicant must have a relevant work experience
  4. The applicant must be qualified

For the applicant to qualify for BAS Agent Registration as required by the Tax Practitioner Board of the Australian Government, he/she must have been awarded at least a Certificate IV in Financial Services – Bookkeeping or Accounting. The said training must be acquired from a Registered Training Organization (RTO) or an equivalent institution.

It is also required to have a Tax Practitioner Board approved course in basic GST/BAS taxation principles. The board also accept qualification which is higher than a Certificate IV, including but not limited to, diplomas, advanced diplomas and degrees. It also requires that the higher qualification must be in the field of bookkeeping or accounting. This would generally cover those applicant that had graduated from an Australian University and those overseas institutions that the board had recognized as an equivalent.

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Certain units are also required by the board as part of the course taken from the Certificate IV Financial Services (Bookkeeping) and from the FNS10 Financial Services Training Package (Accounting). If successfully taken, both could comprise a Board approved course in the basic GST/BAS taxation principles.

The said approved course are FNSBKG404A (Carry out business activity and instalment activity statement tasks), and FNSBKG405A (Establish and maintain a payroll system). The board also mentioned that all courses should have been assessed into a significant degree (that is, at least 40%) under some independent supervision and in a manger demonstrating rigor and integrity.

As part of the qualification, the applicant must have a relevant work experience. This includes work as a registered tax agent or BAS agent, work under the supervision and control of a registered tax agent and work of another kind which is approved by the Board of Tax Practitioners.The work experience must also demonstrate a 1400 hours of relevant experience from the past 3 years or 1000 hours of relevant experience from the past 3 years if the applicant is a voting member of a recognized BAS Agent Association.

The application also requires papers such as an academic transcript of the applicant’s relevant course with evidence of completion, papers of relevant work experience, names and details of two independent referred person and a membership detail of any recognized BAS or tax agent association.

With all of these, the applicant is ready to apply for registration. The registration lasts for 3 years and a renewal is required if the agent plans to continue.

What Is Cloud Accounting Software

Cloud accounting is the latest trend of development in the field of accounting. It’s simply all about putting a company’s auditing system in the cyberspace that can be accessible through a browser or secure remote connection. Cloud Accounting Software is accounting software hosted on different servers.

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Cloud is one big office that is always ready-to-go. It pretty operates fashionably similar to Software-as-a-Service (SAAS) business model like internet banking, simply providing service using applications online. Anywhere you are, anytime you want – the work of an 8-hour mandate is something that you can address now with the portable data service that Cloud Accounting Software provides. Because the features are accessible online, one doesn’t have to install software to any device. The updates are also automatic, generating confidence levels on the quick monitoring and maintenance. Fast deployment, subscription-based pricing, high availability and security are some of the assurances that Cloud Accounting Software can lay in the table.

Literally, cloud accounting refers to the ability to run a program and make it accessible to many computers, regardless of location, at the same time. In practice, it’s about the maximization of the effectiveness of shared resources. It has the ability to adjust one internet application based on the business hours of a certain geographic location.

Cloud Accounting Software, when properly tapped on and utilized by a company, can wave a lot of benefits. Firstly, it allows the company to be closer to its data and maximize the work without having to work in air-conditioned offices. Thus, the capital cost accrued to labor work and the costs attached to the assumption of that work is minimized. Secondly, it also facilitates a more comfortable data provision to its customers. Since the Cloud Accounting Software provides a lock-in feature to enable a private and public data, generally it makes people closer to the information that they wanted to find from the company. There is no need for paperwork and signing up of forms if they just simply need an information that can be accessed online.

The over-all impact of a Cloud Accounting Software can be deduced to its capability of organizing a big chunk of financial data into one accounting online database. It allows you to make smart business decisions Moreover, it also makes basic tasks such as bookkeeping, invoicing, billing and reporting a lot easier. Cloud Accounting Software are also diverse because they are flexed based on the size of the business or the company. Quickbooks and billfaster, for example, is best for small and start-up businesses. Financialforce, Acumatica and MISys on the other hand, acts for bigger auditing systems.

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We all know how strenuous it is to handle accounting work most especially with big companies. A Cloud Accounting Software allows you to redirect your focus on the business instead of pulling a lot of energy for the accounting management. Scalability, security, maintenance of applications and upgrades of the system are some of the main features of Cloud. The Cloud also has world-class data centers that is easily accessible all over the world, making the business a lot easier to gain confidence from different stakeholders.

Because of its main features, the Cloud Accounting Software is ideal for businessmen who travel regularly, work on flexible schedules as well as those who are working at home. It is also ideal for businesses that have remote workers. Compared to the traditional desktop software, availing of this kind of service is just a big ease to your financial auditing work.

Aside from these, an online complement of financial data makes it a lot easier to do financial analysis. These accounting software provides analysis of financial transaction that could have been difficult to acquire had there been no data input online.

From transaction records to billing forms, these basic accounting tasks can be made simpler with the new technology. These modes of comfort in business saves the company from unnecessary costs of traditional accounting, like. licensing of regular accounting software. Yet what needs to be done more is acknowledgement that resourcing technological advancements can facilitate business in a whole lot better way.

Accounting Depreciation Methods in Australia

There is a traditional maxim stating that nothing really lasts for a lifetime. Same principle is being used as basis for various depreciation methods in accounting. Depreciation actually takes the asset’s wear and tear as well as its lifetime to aid bookkeepers in accounting for its decreasing value and the event for its replacement. This principle aims to disseminate capital asset cost over the period of an entity’s useful life. It notes the significance of estimating the useful life to the connection of every depreciable asset and in calculating the depreciable amount when the value of depreciation is in question. The depreciable or historical cost may cover the construction cost, original purchase price or the estimated value at the date of its initial use or ready for use as well as the installation cost, freight costs and other applicable duties or taxes.

Generally, depreciation serves as a non-cash transaction designed for tracking the use of assets over the specified time. Take note of the methods used by companies in depreciating their assets. Bear in mind that the best strategy is dependent on the asset itself as well as to its value over time. There are two fundamental accounting depreciation calculation methods used in Australia. They are the Prime cost also known as fixed or line installment method and the diminishing value also called reducing balance method. When choosing for the best or right depreciation, it is highly advised to weigh things over first. It is important that you consider the tax situation of the client. There are also some instances when the government authority mandates particular form of depreciation strategy. As soon as you have chosen a method, rates are subjected to a year-on-year review for the reflection of the usage, net amount expected on disposal, obsolesce and useful life.

The prime cost depreciation method offers constant charge on the annual basis. This simple method makes an assumption that the value of an asset declines at a uniform rate of service annually. Most accountants used this method since it is easy to apply and to understand. In this method, accountants calculate the depreciation basis by subtracting the salvage value of the asset from the price of purchase and then dividing the difference by the projected lifespan of the asset. It follows the formula: Depreciation = Cost ÷ Useful life

The diminishing value also called reducing balance method has its basis to the concept of an asset using more value in the initial lifespan years than in the end. The method aims to increase the depreciation amount during the early years of the life of the asset. It follows the principle stating that the value of an asset does not uniformly decrease over the period of time and that it calculates the depreciation value as the total asset value’s percentage every year. The calculation of the method follows the formula: Depreciation = Prime cost x 200 percent or 150 percent. It determines the lifespan of the asset following the calculation of the depreciation basis. It is actually equal to one and a half times the depreciation rate of the prime cost.

Moreover, the depreciation cost charged has to be shown as a separate factor along with the amount for the previous year, which needs to be included among the specified year’s comparative amount. The assets are typically reflected under the Non-Current Assets that is at the Net Value. Here, the reader has to be referred to the notes showing the less accumulated depreciation, the net written down value, and the fixed assets at an independent, cost or committee valuation.

It is pointed out that the sufficient records should be kept by the organization for various assets’ of life for audit and accounting objectives. Among these objectives include the date and cost first use or prepared, sale price and cost, depreciation amount and rate, and the depreciated value of every asset used.

Payroll Tax in Queensland

Whether you are an individual employer or a group of employers and your taxable wages reached a minimum of $1.1 million, then you are required to pay payroll tax. Payroll tax is defined as a tax employers pay to the Office of State Revenue that is based on the whole amount employees pay as salaries and wages.

Taxable wages are the payments that are payroll tax liable to certain employee for the services they rendered. These payments are only liable to payroll tax in instances when they are the payments giving the recipient an enforceable right, a service reward rendered by a director and/or employee, and when they are payments for taxable termination. Among the forms of wages subjected to tax are commissions, fringe benefits, salary sacrifice, bonuses, cash wages, redundancy or severance payments, salaries, payment for the leave entitlements and accrued wages of the employee, employers’ superannuation contribution, directors’ fees, non-cash wages, and payments for taxable eligible termination. It is clarified that fringe benefits out of car parking are not included in payroll tax unless it is part of the salary package’s cash component. The wages of the apprentice are also exempted notwithstanding some applicable conditions. This requires the apprentice to sign a training contract before their employer. It has been clarified that all allowances are subjected for taxation except for travel allowances and accommodation allowances under specific circumstances.

The Queensland Government has amended its payroll tax system in 2008, which now include provisions designed for contractors. These provisions determine the relevant contracts necessary for payroll tax calculation and payment. It is noted that payments to the contractors will become taxable under the relevant contract in certain conditions. These may include instances when the contractor primarily or exclusively works for one or more principles and when it provides its services.

There are also contracts not included to the list of relevant contracts for payroll tax such as contracts in which an individual is provided with services that meet the specified exemptions as well as the contracts of service. Take into account the liability of all contracts for payroll tax except when the contract can be regarded as exempted. The conditions under which contracts are deemed exempted with the following circumstances:

  1. The services are not normally required in one’s business and provided by individuals who supply services to the general public.
  2. The services not usually required in a business are necessary for a minimum of 180 days in one financial year.
  3. The services are considered incidental to goods’ use or supply by the supplier.
  4. The contractor conveys the goods in certain vehicle they are providing based on the contract.
  5. The contractor markets of sells the goods in a door-to-door manner for a domestic purpose as specified in the contract.

Queensland’s Payroll Tax Act of 1971 includes the whole payroll tax regulations’ body for the business enterprises in the country. From taxable payments, the act moves on through miscellaneous provisions, and the registration for and the filing for payroll taxes. It is applicable to eligible allowances as well as exemptions for the payroll tax returns of individual companies. It walks for tax filers through the determination of the fuel’s exact amount and the vehicle expenses’ maintenance to lessen payroll tax liabilities and set out possibilities for calculation methods. The act also covers entertainment expenses and lodging allowances. It exempts payroll tax in entities like public hospitals, local governments, charities, state governors, and other individuals and institutions.

The act also offers provisions on payments for the temporary labor of employment agents, which are treated on a different manner over the payments made to regular employees. It stipulates the persons who should be classified as employees and employers in certain contract labor purchase and the amount of payment that should be considered as the actual wages.

So to determine the exact amount of your payroll tax obligations, it has been recommended you log in to the government’s official website for the information.

What Power Do Collection Agencies Have to Get Your Money

A lot of people lack understanding on the real deal of getting a collection agency. There are times when the company that tries to get your money tends to go in house so that they need not to pay anyone just to get their money back. Contrary happens in the case of small businesses as they tend to recruit someone in order to get the job rightfully done. But businesses these days already have a preference in dealing with those debtors who make it a habit to not to pay their own dues. They can now hire a commercial debt collector or agency to carry out this task for them. This will save them time and effort of going after their debtors that oftentimes result to harassment.

Collection agencies play a crucial role in the world of commerce as they act as mediators of debtors and creditors with which businesses or depressed assets are usually brought in the form of pennies. They are actually there to carry out their responsibilities proficiently. They work closely with a network of lawyers and the gents of the creditor. They make certain that they will be able to return your money as quickly as possible without collateral damage and with lesser revenue losses. You may be charged at higher rate, but you should remember that paying them to get your money back is a better option than not getting it at all. They cannot just do whatever they please to attempt to get your money; they have a lot of rules to consider to avoid unnecessary harassment for the owed money. In cases when otherwise happen, it will be the federal trade commission then to crack them down to make sure that it will not happen again.

Meanwhile, there are companies believing that hiring anyone to get their own money back is not necessary anymore. What they may have in mind is that they can do the task themselves. In the instance that your client failed to sign a contract with you or refuses to answer any of your calls, this only suggests that getting your money is already vague. This is where the need of debt collectors comes in as they are excellent in executing their job and ensure that you will have your money back and use it to keep the smooth running of your business.

If you are concerned with the fee that will be charged from you by collection agencies, don’t worry as they only ask minimal payments. Such payments will be used in helping the debtors to recover their financial duties. Take note that the original debt sources have nothing to do with their collections. The agencies see to it that you will be charged reasonably without ripping you off so that they can still continue their operation as well. They just take their own expertise and make money out from it with the objective of helping you out with whatever financial dilemma you encounter. This is a win, win situation shall we say.

What Power Does The Office of Fair Trading Have Over Business?

With its primary mission of making markets work for the customers, the Office of Fair Trading (OFT) is of definite and crucial role with businesses. Note that markets properly work when business enterprises are in fair, vigorous and open competition with each other for the custom of consumers.

The main job of OFT is to ensure that consumers do have more preferences in different sectors within the marketplace. It makes this possible by encouraging enterprises to be compliant with the consumer and competition law and make improvement on their trading practices by self-regulation, studying markets and then recommending the required action, decisive acting to prevent flagrant or hardcore offenders, and empowering customers with skills and knowledge to come up with informed choices and then get the very best market value. It promotes and protects consumer interest while making certain the fairness and competitiveness of businesses. Its tools in executing its work are those powers provided through competition and consumer legislation.

OFT helps improve consumer welfare by bringing efficient and competitive markets, empowering them with skills and know-how for informed and rational purchasing decisions, and thwarting coercive and deceptive trading practices. Consumers then greatly benefit from the choice, quality and improved value of products and services and are less susceptible in encountering any form of problems. Good businesses also benefit when markets are also working properly. Businesses are being protected from inappropriate regulations, abusive monopolies and cartels and may also reap rewards in delivering the wants and needs of their customers. The economy, as a whole, then thrives with the competitive markets so as to encourage greatness in innovation and productivity. This demonstrates the financial contribution of OFT to the economy exceeding its costs to taxpayers.

Business makes the most out of OFT through analysis as it gathers intelligence on trader behavior and markets from various sources and then responds to complaints on markets from the designated bodies of consumers. It also undertakes studies with regards to market studies and give out suggestions or takes further action where it is necessary. It just ensures the best decisions on which programs and projects to undertake in all areas of the responsibility for the real outcomes. It even considers several factors such as strategic significance, resources, risks, and consumer effects. It takes into consideration of the capacity, interests and activity of its partners.

OFT also equips businesses and consumers with the expertise that they require in protecting themselves over unlawful practice to avoid harm. This is the real value of its belief that prevention of harm is a lot better for the consumers than taking the enforcement action. OFT is also encouraging business enterprises to make improvement in their trading practices through proper education on their duties and self-regulation.

All of the powers of OFT over businesses will not be made possible without their collaboration with its partners. Among them are the government, consumers, sector regulators, Local Authority Trading Standards Service, courts and the representatives of consumers.

The Process of Voluntary Administration

In Australia, the most notable solution for the problems of many businesses is voluntary administration. Generally, voluntary administration is an insolvency procedure and a legal binding agreement with creditors wherein the directors of secured creditor or financially troubled company appoint a voluntary administrator. The administrator is tasked to examine the affairs of the company, report to the creditors and recommend to them whether entering into a deed of company arrangement (DOCA) should be liquidated or be returned to its directors. However, voluntary administration can also be executed by a director in the instance when not all shareholders or directors gave their consent to their company’s voluntary liquidation.

The ideal company that needs a voluntary administration is one that is a trading business. The company should be an insolvent and in need of some debt restructuring. It should have a disaster causing financial loss that resulted in the insolvency of the company. It should also have good prospects to return to profitability and should have significant cash flow with consideration that debt burden can still be lowered. However, you should remember that voluntary administration does not solve a corporate problem right away. There is a certain process to follow so that every step of the procedure leads to success.

Voluntary administration process enables an enterprise or company with solvency or cash flow problems to have space from its own creditors for restructuring. The process aims to enable businesses to restructure themselves and survive from financial crisis. It is expected to return them into their own health without resorting to the liquidation process, which may only yield devastating effects to the companies, and without dealing with demands from landlords, creditors and suppliers. It usually runs about a month, whereby corporate directors hand over the management of their company to an independent administrator. During this time, the appointed administrator secures and then protects the assets of the company and evaluates the whole business to get recommendation to creditors on making the decision whether or not it should be liquidated. It points out that the decision with regards to the future of the company remains to the creditors.

The process provides a moratorium period barring personal guarantee holders, landlords, creditors, stock suppliers, and other stockholders from taking any form of action over the company until the full completion of the process. This can be very beneficial in the instance when a retail business landlord tries to evict the tenant and devalue the available assets for the creditors. During the process, all action made for debt recovery or asset possession is being frozen, pending the resolution. This only means that you cannot repossess stocks if you supplied them out of a Retention of Title arrangement even though the administrator has considered your claim. Meanwhile, banks are forbidden to exercise their rights after specific period for their own security.

Businesses in distress due primarily to the requirement for creditors to take measures to prevent trading whilst insolvency makes use of voluntary administration process on a regular basis. They treat the process as one of the mostly used defences to insolvent trading wherein the director took the initiatives to prevent incurring debt and then make an appointment for an administrator. Take into account the provision of the law criminalizing debts that are knowingly incurred whilst insolvent. It further notes the criminal penalty to be charged on this offence letting you pay a fine of $250,000 and a maximum imprisonment of two years. A liquidator may also pursue a director for the insolvent trading, which resulted in the debt incurred right after the point of insolvency personally paid by the director back to the company’s creditors.

The Advantages of a Company Structure

You have to understand then what type of organizational structure you really need by knowing the kind of organization you have. A company structure is a formal relational system within a business. It complements the goals and objectives of certain business. It serves as the basis of corporate culture affecting the performance, cooperation, motivation, and behavior of an employee. It allows management to monitor and to control business operation while facilitating the working relationships. Different types of organizations do have different types of benefits. Read through to learn what these benefits are.

Streamlining Business Operations

A company structure helps an enterprise streamline business operations. Oftentimes, directors, managers and business owners are vested the authority in organizing business functions into certain departments for the completion of business processes. This initiative helps ensure the completion and effectiveness of the operations. It is also cost-effective as it lessens the number of businesses with similar functions since they are executed by several departments.

Improving the Decision Process

Business enterprises may use a company structure in improving the decision making process of businesses. Remember that corporate decisions are usually related to the information that directors, managers or owners collect based on a timely period. A corporate culture promotes information flow that originates from the frontline operations towards the managers who are responsible for business decision making process. In fact executive level management may find corporate structure channels beneficial as a tool to send information to the employees or managers who completed business functions.

Operating Multiple Business Locations

Small businesses may give local, domestic or regional economic markets as they continue to grow to bigger size and then expand. A company structure assists business enterprise owners in establishing a management chains to make certain that all their business locations or branches are running based on the standard procedures. It should not be neglected that because entrepreneurs are dependent on corporate structures as they are unable to visit each if these locations on time.

Improving the Performance of Employees

With the right company structure, managers can now outline the tasks of their employees and oversee their individual performance. Here employees are given the option to take a training period where they may learn the organizational structure of the company. This gives the employees the proper way of choosing the managers that can make particular decision or the proper hub where they may send information subject for approval. A corporate structure can also be developed flexibly to allow the addition of employees or departments to spare a single manager to take all the responsibilities in the enterprise.

Putting Emphasis on the Customer Services and Sales of the Company

Businesses that use a well-defined company structure are expected to spend more of their time to concentrate more on customer service rather than to correct their operation-related concerns. Take note that companies with improved customer service may find it easy to answer every question or inquiry on services or goods that their consumers may raise. This also helps businesses concentrate on their escalating profits and sales revenues that are attributable to business operations as they meet the desires and needs of their consumers.

Increasing the Trading Credibility of Businesses

A corporate culture can be a great tool that drives the credibility level of business enterprises in the market place. In fact this approach is already accepted, trusted and recognized.

Among the other advantages offered by a company structure are separate legal entity, trading confidence, continuity, tax efficiency, borrowing, limited liability, corporate funding, and shareholder loan security. Take into consideration that these benefits as well as those mentioned above are necessary to better understanding whether or not the structure you are employing really fits to your own business.