Help - what do I do - trustee bank account?

Hi Peoples,

My son is feeling a little defeated & I don't know what to do

As an offshoot of his year 11 schooling - business subject - My16 yr old is setting up his own little small ecommerce business as a sole trader, ABN, Business name, Domain name, bank account all already set up in his name, stock ordered from overseas manufacturer.

Now the ROADBLOCK - (critical sales platform) ebay & paypal will not let him have an account unless he is 18yrs of age.

My accountant suggested that I ask the bank for a bank account where the bank account is in my name (adults name) ie: Joe Bloggs as trustee for Junior Bloggs ..... trading as xxxxxxx (business name). with his TFN and the ABN.....

- Then I as the adult can basically setup the Ebay & Paypal account linked to the trustee bank account that's created in my (adults) name.

The bank has advised its not that simple.

That I would need to get Trustee certification.....? (a whole new world to me)

that would apparently likely involve me as the adult becoming the sole trader?? ie: having to ask asic to change the sole trader - business name from my sons name to me?
Likewise the ABN to me.... etc etc
Then I can get a trustee certification?? where my son is the sole beneficiary.
Go back to the bank - the bank can setup the account in my name as trustee for my son....

All this for his little business that may only make a few hundred dollars or a few thousand, besides that......My son is determined and I don't want to crush his enthusiasm and dreams!!

Q.1. Is this the correct / best process to navigate thru.......
Q.2. How much would it likely cost to set up a trustee certificate?....
Q.3. With myself having to become involved - what taxation effects could be impacted... (as I already have a job) or as he being the sole beneiciary does that allow taxation at his rate and in turn he can reinvest his monies made back into his little business
Q.4. With myself involved - are my assets now open / unprotected - if someone was to sue the business.....

 

A trust is not an entity but a relationship. You would be operating the business if you are trustee. If done correctly the child will be taxed. But you are personally liable for all contracts and negligence etc.

What does the trustee certificate look like? Perhaps try another bank. But it will be messy with business names etc and prob costly in money and time

 

Maybe a perfect opportunity for a company. And you are a ghost Director initially. He can have title of General manager. (not a Director) On him attaining 18 he could become the true Director. He can own shares from day one. No complex issues with CGT etc and no punitive tax penalties as the "minor issue" is avoided unless profit is to be paid as a dividend or any salary. This company cost ($1K) would avoid need for paying for a business name.

 

Thanks gents, perhaps a company yes.....

i see i have 3 options


Option 1 - Stay the course establish how much it will cost to set up as a trustee whereby Son receives sole beneficiary if it does not affect taxation against me and our liability and personal assets being open for sueing (i may be over reacting for what is being sold is an article of clothing - cloth face mask) non medical surgical grade


Option 2 - Keep it as it is don’t worry about Ebay Or PayPal and just sell directly through our website by establishing that we can get a visa merchant set up for My son as a 16-year-old through the NAB.

Option 3 - establish how much it will cost to set up as a company and how that plays out - noted above - about $1k

 

Option 4...what you dont know or ask. Qualified opinion!

 

Using a trust may involve duty and punitive tax? And legal implementation costs perhaps.

A adult parent is not necessarily a trustee

 

Does Ebay check date of Birth? It's been so long ago that I registered, I really can't remember.

Also, you don't need a Visa merchant. You can get a Square App for your phone or Ipad. Cost is minimum, and you can run card purchases through this.

 

Yes ebay do - try entering dob for paypal account purposes and it rejeects if under 18yrs...

Thanks for the tip on square - so in short - do you place a link on your website for square which customers can enter details and you subsequently enter through your phone square app....

 

My shopping cart will take paypal or afterpay/zippay. If they want to use a card, that can be done via paypal as well, or they can ring & we can put it through manually.