The Business Has Outgrown Its Original Setup
More revenue, assets, contracts, employees or investors can make the original structure harder to manage.
Structure Review · Tax Planning · Asset Transfers · Implementation
Your original business structure may not suit the way the business operates today. Growth, new owners, employees, commercial risk, investment plans or administrative complexity can all create a reason to review the structure. Hamro Accountant Sydney can help you work through the accounting and tax consequences before assets, registrations and records are moved.
A restructure can create tax, legal, duty, finance and commercial consequences. This page is general information only. Legal documents, asset transfers and ownership changes may require legal and other specialist advice in addition to accounting and tax advice.
Restructuring means changing the legal or ownership structure through which the business operates. Common examples include moving from a sole trader to a company, adding a partner or moving a partnership into a company. The change can affect ABNs, registrations, ownership of assets, contracts, tax treatment, accounting records and legal obligations, so the steps should be planned before the transfer occurs.
Changing structure adds work and can trigger tax, duty and legal issues. The starting point is therefore the commercial reason for changing — not simply choosing a different tax rate.
More revenue, assets, contracts, employees or investors can make the original structure harder to manage.
A company is a separate legal entity, but directors can still have personal duties and guarantees. The practical risk position needs review.
A change in ownership can affect structure, agreements, valuation, registrations and the tax treatment of transferred interests.
A genuine restructure can also simplify an arrangement that no longer provides enough commercial benefit for its cost and administration.
A restructure is not a rename. The operating entity, ownership, registrations and asset ownership may change.
Usually involves a new company, a new ABN for that entity, transfer of relevant business assets and registrations, and a new accounting file or carefully planned cut-over.
Company accountingBringing in a partner changes ownership and can require a partnership agreement, new registrations, transfer of assets and a different tax and accounting process.
Business.gov.au notes that a partnership cannot simply be changed directly into a company; a new company is established and the partnership is then dealt with separately.
A useful restructure review looks at the commercial purpose, current ownership, assets and liabilities, employees, contracts, registrations, accounting systems and future plans before deciding how the transition should occur.
Some changes can produce income-tax roll-over relief, while others can create capital gains tax, GST, duty or other consequences. The facts need to be checked before documents are signed or assets are moved.
Growth, investment, ownership, risk, succession or simplification should be clearly understood.
Ownership changes can affect roll-over eligibility and broader tax consequences.
Goodwill, equipment, stock, vehicles, contracts, IP, loans and property may each require different treatment.
The new entity may need its own registrations before trading.
A clear date helps separate sales, expenses, payroll, BAS and bank transactions.
Subdivision 328-G can allow eligible small businesses to transfer qualifying active assets as part of a genuine restructure without immediately recognising certain income-tax gains or losses. It is not a blanket exemption and all relevant conditions need to be satisfied.
The ATO's small business restructure roll-over is available to eligible entities within the relevant small-business turnover test.
The rules can apply to active CGT assets, trading stock, revenue assets and depreciating assets where the statutory conditions are met.
The transaction must genuinely restructure the continuing business, rather than operate as an artificial step to realise or divest assets.
The restructure generally must not materially change who ultimately owns the transferred assets or each owner's economic share.
The ATO provides an alternative safe-harbour route for the “genuine restructure” condition. Broadly, for three years after the transfer, significant assets must continue to satisfy the relevant ownership and active-use conditions and must not be materially used for private purposes. The safe harbour does not replace the other roll-over requirements.
The ATO's restructure roll-over deals with particular income-tax consequences of qualifying asset transfers. A restructure can still involve other matters such as GST, transfer duty, asset values, registrations, shareholder or trust issues and legal documentation.
That is why the tax review should happen before the implementation date. A technically available roll-over does not automatically mean the entire restructure is tax-free or commercially appropriate.
Check whether a roll-over applies to the specific transferred assets.
Consider the GST treatment of asset or business transfers separately.
Check whether dutiable business assets are transferred and whether a state exemption may apply.
A tax roll-over does not transfer every licence, contract, bank account or registration automatically.
Revenue NSW administers transfer duty on transactions involving dutiable property in New South Wales. Whether a business restructure gives rise to duty depends on the assets, rights and interests involved and the form of the transaction.
Any NSW exemption or concession must be checked against its own requirements. Federal Small Business Restructure Roll-over eligibility does not automatically remove NSW duty, so seek transaction-specific advice before signing or transferring assets.
Once the target structure and tax treatment are confirmed, the change should be implemented in a sequence that keeps transactions, registrations and accounting records clearly separated.
Set up the company, partnership or other structure that will operate after the restructure.
Arrange the ABN and relevant GST, PAYG or other registrations for the new operating entity.
Document the transfer of business assets, IP, stock, equipment, contracts or other rights that need to move.
Direct new sales and expenses to the correct entity from the agreed cut-over date.
Confirm the employer entity, payroll records, STP, PAYG and super workflow before the next pay cycle.
Bring across the required opening balances, assets, liabilities and outstanding invoices or bills.
Deal with outstanding BAS, tax returns, registrations and final accounting work for the previous entity where required.
Business.gov.au states that when a business changes structure, it will generally need a new ABN for the new structure. For example, a sole trader ABN cannot simply be transferred to a newly formed company.
Business names, GST, PAYG withholding, licences, permits and other records may also need to be transferred, re-registered, updated or cancelled depending on the change.
Confirm the new entity's registrations before it begins trading.
Sales and purchases need to be reported by the correct entity from the correct date.
Payroll and STP reporting should follow the legal entity that employs the workers.
Business-name arrangements need to match the entity that will trade under the name.
One of the most practical parts of a restructure is deciding exactly when the old entity stops transacting and when the new entity begins. That cut-over date should flow through banking, invoices, bills, payroll, GST and the accounting file.
Explore Xero SetupThe exact information depends on the proposed restructure, but a review commonly starts with the entity details, financial records, assets, ownership and the commercial reason for changing.
Current business structure and ownership details
Recent financial statements or bookkeeping records
List of business assets, liabilities, vehicles and equipment
ABN, GST, PAYG and other registration details
Business-name, contract, lease and IP information where relevant
Reason for restructuring and intended ownership after the change
The first reporting cycles are the best time to confirm that the new entity, accounting file and registrations are operating as intended.
Confirm banking, invoices, expenses and payroll are using the correct entity.
Review opening balances, transferred assets and outstanding amounts between entities.
Confirm the new structure is producing reliable GST, payroll and financial information.
These services connect directly with the restructuring process before and after the new entity begins operating.
Ongoing accounting and tax support where a company becomes the new operating entity.
Explore company accountingKeep the old entity close-out and new entity bookkeeping clearly separated.
Explore bookkeepingConfigure the new accounting file, bank feeds, GST, invoices and opening balances.
Explore Xero setupSeparate the old and new entity BAS periods and review GST reporting through the transition.
Explore BAS supportRestructuring often involves legal documents as well as tax and accounting work. The ownership documented by the lawyer, the assets transferred for tax purposes and the balances entered into the accounts should all describe the same transaction.
Structure analysis, tax treatment, registrations, records and implementation support.
Company, partnership, trust, contract, asset-transfer and other legal documentation where required.
These answers are general information. Restructure outcomes depend on the existing entity, ownership, assets, turnover, proposed structure and the commercial purpose of the change.
A review can be useful when the business has grown, ownership is changing, a partner or investor is coming in, employees or assets have increased, commercial risk has changed, or the existing structure has become unnecessarily complex. A review does not mean a restructure is automatically required.
Yes, but the company is a new legal entity rather than a renamed sole trader. The process can involve registering the company and its ABN, moving relevant business assets and registrations, changing banking and invoicing, and dealing with the old sole-trader obligations.
Subdivision 328-G is an income-tax roll-over that can apply to eligible transfers of active business assets made as part of a genuine restructure of an ongoing small business. The statutory conditions include turnover, asset, ownership and other requirements.
No. Aggregated turnover below $10 million is only one part of the eligibility test. The transferred assets, genuine-restructure requirement, ultimate economic ownership and other statutory conditions also need to be satisfied.
Not automatically. The federal Small Business Restructure Roll-over deals with particular income-tax consequences. NSW transfer duty is a separate state issue. Any NSW exemption or concession must be considered under its own eligibility requirements.
Generally, yes where a new legal structure or entity begins operating the business. For example, a sole trader's ABN cannot be transferred to a newly formed company. The new entity applies for its own registrations.
The accounting records need a clear cut-over. Depending on the restructure, the new entity may use a new accounting file or a carefully configured transition with opening balances, outstanding invoices and bills, assets, tax balances and bank accounts correctly separated.
We can assist with the accounting and tax side of the restructure. Legal agreements, trust deeds, asset-transfer documents and legal advice may require a lawyer or other appropriately qualified adviser. The accounting and legal work should be coordinated so both reflect the same restructure.
Tell us how the business operates now, the structure you currently use, why you are considering a change and whether assets, employees or other owners are involved. We can then focus the discussion on the accounting, tax and implementation issues that need review.
Structure review
SBRR eligibility review
Registration & cut-over plan
Xero & accounting transition
Do not submit TFNs, passwords, bank login details, director IDs, trust deeds or identity documents through this general enquiry form.