Business Structure Review & Restructuring Advice – Prime Partners
Why Business Structures Need Periodic Review
Most business structures are created at inception and rarely revisited. As revenue grows, entities are added and funding arrangements evolve, the original framework can drift away from how the business actually operates.
A business structure review examines whether your current arrangement of companies, trusts, partnerships and other entities still serves the interests of the people who own and operate the business. It considers tax efficiency, asset protection, governance, succession and the practical realities of how the group functions day to day.
At Prime Partners, we work with established businesses – not startups choosing their first structure – to assess whether the current setup remains fit for purpose and, where it does not, to design and coordinate a path forward.
Do not wait for a trigger event to force the question.
A business structure review is not something most owners think about until a crisis demands it. By that point, options may already be constrained by time, tax consequences or third-party expectations. Proactive reviews are always less disruptive and less expensive than reactive restructuring.
When Should a Business Review Its Structure?
The most common triggers we see include:
The Business Has Outgrown Its Original Structure
What worked as a sole trader or single company at startup rarely scales well into a multi-million dollar operation. Revenue growth, new employees, interstate or international expansion, and increasing regulatory obligations all place pressure on a structure that was never designed for the current reality.
New Entities Have Been Added Without an Overall Strategy
It is common for businesses to add companies, trusts or holding entities over time – often on the advice of different advisers at different points. Without a coordinated group strategy, these additions can create duplication, confusion and unnecessary cost.
Owners Are Unsure Whether the Structure Is Still Tax Effective
Tax law changes regularly. What was an efficient arrangement five years ago may no longer deliver the same benefit. Division 7A, trust distribution rules, capital gains tax concessions and franking credit integrity measures all affect how structures perform over time.
Personal Guarantees or Cross-Collateralisation Are Creating Concern
Many business owners discover that personal guarantees given to lenders, landlords or suppliers have created exposure that was never intended. A structure review identifies where personal and business risk are intertwined and whether separation is achievable.
Expansion, Acquisition or Investment Is Being Considered
Before acquiring another business, taking on investors or entering a joint venture, the existing structure needs to accommodate the new arrangement without creating unintended tax, liability or governance consequences.
Succession Planning Is Raising Ownership Questions
Transitioning ownership to the next generation, bringing in key employees as equity holders, or preparing for an eventual sale all require the structure to support orderly transfer of control and value.
Lenders Are Asking for Clearer Governance
Banks and institutional lenders increasingly require clear group structures, consolidated reporting and identifiable borrowing entities. A fragmented or unclear structure can delay or prevent financing.
What a Business Structure Review Covers
Our business structure review is a comprehensive assessment across six areas. The scope is tailored to the complexity of the group and the specific concerns that prompted the review.
Structural Review of Existing Entities
We map every entity in the group – companies, trusts, partnerships, self-managed superannuation funds and any dormant or legacy structures. For each entity, we document its purpose, its relationship to other entities in the group, and whether it is still serving a useful function. This mapping exercise alone often reveals entities that are redundant, structures that have drifted from their intended purpose, or gaps where an entity should exist but does not.
Ownership & Control Alignment
Ownership and control do not always sit where the principals expect. We review who owns what, who controls what, and whether those arrangements align with the intentions of the business owners. This includes examining:
- Share registers and unit holdings – Who holds equity and in what proportions
- Trust deeds and trustee appointments – Whether discretionary and fixed trust arrangements reflect current intentions
- Director and officeholder registers – Who has legal authority to bind each entity
- Powers of attorney and enduring appointments – Whether incapacity or absence has been planned for
Group & Multi-Entity Coordination
For businesses operating through multiple entities, we assess how the group functions as a whole. This includes intercompany agreements, transfer pricing between related entities, loan arrangements, and the flow of funds through the group. Poor coordination between entities is one of the most common sources of tax risk and operational inefficiency in multi-entity groups. Division 7A loans, uncommercial transactions between related parties, and inconsistent accounting treatment across entities are issues we regularly identify.
Tax Efficiency Assessment
We evaluate the current structure against current Australian tax law to determine whether it remains efficient. This assessment covers:
- Income splitting and distribution strategies – Whether the structure allows income to be directed to the most tax-effective recipients within legal boundaries
- Capital gains tax planning – Access to the small business CGT concessions, 50% discount, and the ability to crystallise gains in the most appropriate entity
- Franking credit management – Whether the corporate structure allows franking credits to be utilised rather than trapped
- Division 7A compliance – Whether loans between entities and to associates are properly documented and compliant
- GST grouping – Whether related entities should be grouped for GST purposes to reduce compliance burden
- Payroll tax grouping – Whether state payroll tax grouping provisions are creating an unintended liability across the group
Structural Planning Before Change
Where a significant business event is approaching – an acquisition, capital raise, new partnership, succession transition or sale – we assess whether the current structure can accommodate the change or whether pre-event restructuring is required. Restructuring after a transaction is almost always more expensive and complex than restructuring beforehand. Stamp duty, CGT and income tax consequences can often be managed or deferred through proper advance planning.
Restructuring Implementation Coordination
Where changes are recommended, we coordinate implementation across all relevant disciplines. This typically involves:
- Tax and accounting – Quantifying the tax cost or benefit of each proposed change
- Legal – Working with your solicitors to prepare new deeds, constitutions, shareholder agreements and intercompany contracts
- ASIC and regulatory – Managing company registrations, deregistrations and changes to officeholders
- Banking and finance – Communicating structural changes to lenders and updating security arrangements
- Insurance – Ensuring coverage is updated to reflect the new structure
We act as the central coordinator, ensuring that all advisers are working from the same structural blueprint and that nothing falls between the gaps.
Who Is a Business Structure Review For?
A business structure review is most valuable for established businesses that have evolved beyond their original setup. We work primarily with three types of clients.
Growing Owner-Operated Businesses
Businesses turning over $1 million to $10 million that started with a simple structure and have added complexity as they grew. These owners often know the structure needs attention but have not had the time or the right adviser to address it.
Common issues include:
- Operating through a trust that was set up before the business became profitable
- Personal assets and business assets sitting in the same entity
- No formal documentation of intercompany arrangements
- The owner’s accountant managing compliance but not providing structural advice
Medium-Sized & Multi-Entity Groups
Businesses with multiple trading entities, holding companies and trusts – typically turning over $10 million to $50 million. These groups often have structures that were built incrementally rather than designed holistically.
Common issues include:
- Entities that duplicate functions or exist for historical reasons that no longer apply
- Intercompany loans that have never been formalised under Division 7A
- Group structures that create unintended payroll tax or workers compensation grouping
- Succession arrangements that are unclear or undocumented
Larger Privately Owned Businesses
Private groups with complex ownership, multiple generations of family involvement, or significant asset holdings. These businesses typically require structures that balance tax efficiency with asset protection, governance and intergenerational planning.
Common issues include:
- Family trust structures that no longer reflect the family’s wishes or circumstances
- Corporate groups where governance has not kept pace with growth
- Intergeneration transfers that have stalled because the structure cannot accommodate them
- Investor or board requirements for structural clarity before funding or exit
Our Approach to Business Structure Reviews
We follow a structured five-step process designed to move from understanding to action without unnecessary delay.
Step 1 – Map the Current Position
We begin by documenting the full group structure – every entity, every ownership link, every intercompany arrangement. This includes reviewing trust deeds, constitutions, shareholder agreements, ASIC records and financial statements. The output is a clear structural map that most clients have never had produced before.
Step 2 – Identify Misalignment
With the current position mapped, we assess where the structure diverges from what the business actually needs. This includes tax inefficiencies, governance gaps, asset protection weaknesses, and operational friction caused by the current arrangement. We produce a written assessment that sets out each issue, its significance, and the risk of leaving it unaddressed.
Step 3 – Design the Appropriate Structure
We develop a recommended structure that addresses the identified issues while being practical to implement. Not every problem requires a new entity or a major restructure. In many cases, the solution involves amending existing arrangements, formalising undocumented practices, or deregistering entities that are no longer needed. Where restructuring is recommended, we model the tax cost of each option so the business can make an informed decision.
Step 4 – Coordinate Implementation
Once the recommended structure is agreed, we coordinate implementation across accounting, legal and regulatory disciplines. We prepare a timeline, assign responsibilities, and manage the process to completion. This stage is where many business structure reviews fail when done by other firms. Recommendations without implementation are just reports. We see the process through to completion.
Step 5 – Revisit as the Business Evolves
A business structure review is not a one-time exercise. We recommend reviewing the structure at least every three to five years, or whenever a significant business event occurs. For ongoing clients, we incorporate structural monitoring into regular advisory meetings.
Common Business Structure Types in Australia
Understanding the characteristics of each structure type helps business owners evaluate whether their current arrangement is appropriate.
Sole Trader
The simplest structure, where the individual and the business are legally the same entity. Income is taxed at personal marginal rates. There is no asset protection – all business liabilities are personal liabilities. Sole trader structures are rarely appropriate for businesses generating significant profit or carrying meaningful risk.
Partnership
Two or more individuals or entities carrying on business together. Partnerships offer some flexibility in profit sharing but provide no asset protection between partners. Each partner is jointly and severally liable for partnership debts. Partnerships are common in professional services but increasingly replaced by company or trust structures as businesses grow.
Company (Pty Ltd)
A separate legal entity that provides limited liability protection. Companies pay tax at a flat rate (25% for base rate entities, 30% for others) and can retain profits, issue shares, and access certain tax concessions. Companies are the most common structure for businesses seeking asset protection, investor participation or eventual sale.
Discretionary Trust (Family Trust)
A trust where the trustee has discretion over how income and capital are distributed among beneficiaries. Trusts are widely used in Australia for tax planning and asset protection, though recent legislative changes have introduced additional integrity measures. Trusts cannot retain profits as easily as companies and are subject to complex distribution rules.
Unit Trust
A trust where beneficiaries hold fixed entitlements (units) proportional to their investment. Unit trusts are commonly used for joint ventures, property investment and situations where ownership proportions need to be clearly defined.
Hybrid & Multi-Entity Structures
Most established businesses operate through a combination of the above – for example, a discretionary trust holding shares in a trading company, with a separate holding company owning intellectual property or real estate. The design of these hybrid structures is where the real value of a business structure review lies.
Most established businesses use a combination of companies and trusts – the design of these hybrid structures is where the real value lies.
A discretionary trust holding shares in a trading company, with a separate entity owning property or IP, is one of the most common and effective arrangements. But the details matter – the wrong structure can cost hundreds of thousands in unnecessary tax.
Tax Implications of Business Restructuring
Restructuring an existing business almost always has tax consequences. Understanding these in advance is essential to making informed decisions.
Capital Gains Tax (CGT)
Transferring assets between entities can trigger CGT. However, several rollover provisions exist that allow restructuring without immediate tax consequences:
- Subdivision 122 – Transfer of a business from a sole trader to a company
- Subdivision 124-M – Company restructures including demergers
- Subdivision 328-G – Small business restructure rollover for businesses with turnover under $10 million
Each rollover has specific conditions that must be satisfied. Failing to meet these conditions can result in an unexpected and significant tax liability.
Stamp Duty
State and territory stamp duty applies to transfers of certain assets, particularly real property and business goodwill. Duty rates vary by jurisdiction, and exemptions or concessions may be available for corporate restructures. Stamp duty is often the largest single cost in a restructuring exercise and must be modelled before any changes are implemented.
Division 7A
Where a private company lends money to shareholders or their associates, Division 7A deems the loan as a dividend unless a compliant loan agreement is in place. Restructuring that involves moving assets or funds between related entities must be carefully managed to avoid triggering Division 7A consequences.
GST and Indirect Taxes
Asset transfers between GST-registered entities may trigger GST unless the going concern or GST group exemptions apply. We ensure all indirect tax consequences are identified and managed as part of the restructuring process.
Asset Protection Through Business Structuring
One of the primary reasons business owners seek a structure review is concern about asset protection. Effective structuring can separate business risk from personal wealth, though no structure provides absolute protection.
Separating Trading Risk from Asset Holdings
The most fundamental asset protection strategy is ensuring that high-risk trading activities occur in an entity that does not hold significant assets. Trading companies can be kept asset-light, with valuable assets such as property, intellectual property or investment portfolios held in separate entities.
Trust Structures for Asset Protection
Discretionary trusts are commonly used to hold assets because trust property belongs to the trust, not to any individual beneficiary. However, the level of protection depends on the trust deed terms, how the trust has been administered, and whether creditors can challenge distributions or appointments.
Director and Guarantor Exposure
Directors of companies face personal liability under certain circumstances, including insolvent trading, unpaid employee entitlements, and PAYG withholding obligations. We review director exposure as part of every structure assessment and recommend strategies to limit personal risk where possible.
Limitations of Asset Protection
No structure can protect assets from all creditors in all circumstances. Courts can look through structures where they were established primarily to defeat creditors, and personal guarantees override the protection that entity separation would otherwise provide. We advise on realistic expectations and practical strategies.
How Long Does a Business Structure Review Take?
The timeline depends on the complexity of the group and the availability of documentation.
| Group Complexity | Typical Timeline |
|---|---|
| Single entity with 1-2 owners | 2-4 weeks |
| 2-5 entities with family involvement | 4-8 weeks |
| Multi-entity group (6+ entities) | 8-12 weeks |
| Complex private group with intergenerational issues | 12-16+ weeks |
These timelines cover the review and recommendation stages. Implementation is additional and depends on the scope of changes required.
Frequently Asked Questions
Is this only necessary when something is wrong?
Do you set up new entities as part of this work?
Will this involve our legal advisers?
When should a business review its structure?
What is the difference between a company and trust structure?
How does business restructuring affect tax?
Can you help with asset protection structures?
How long does a business structure review take?
Do you work with multi-entity groups?
What triggers the need for business restructuring?
Related Services
A business structure review often intersects with other advisory services we provide:
- At the Moments That Matter – Our approach to advisory at critical business junctures
- Business Growth & Expansion Advisory – Structuring for growth, acquisition and market entry
- Business Succession & Transition Advisory – Ownership transfer, exit planning and intergenerational transition
- External Finance Team & Virtual CFO – Ongoing financial leadership and strategic oversight
- Private Client Advisory – Personal wealth structuring, estate planning and family governance
- Business Accounting & Tax Advisory – Compliance foundations that underpin structural efficiency
Request a Business Structure Review
If your business has grown beyond its original structure, added entities over time, or is approaching a significant change, a business structure review can provide clarity and direction.
We begin with an initial conversation to understand your situation, followed by a scoped proposal. There is no obligation and no generic advice – every review is tailored to the specific business.