Registering a Company / Principle Place of Business ??

Discussion in 'Starting & Running a Business' started by Finds, 21st Mar, 2020.

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  1. Finds

    Finds Well-Known Member

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    I had a few questions that I need some guidance on regarding starting a company structure for my business operations. My situation is as follow:

    - I currently live with my parents paying board.
    - I am wanting to turn my "side hustle" into a legitimate business operation.
    - Sole Trader structure would be fine for now, but have a long-term view and am bullish on the business potential.
    - I work full-time and have no desire at this point to stop doing so.
    - My entire business is/will be online, strictly e-commerce.

    My questions mostly revolve around registering a company and the Principle Place of Business question. As I said I live with my parents who own their home, and I was just worried about any potential impact on their taxes payable. For example, if they sell their home which they plan to inside the next 12 months, would my business operations affect them ? Or are their any other considerations to listing their address, which I also live at, as the Principle Place of Business ? Also, my business will be an e-commerce operation where no physical address will be used to conduct business operations, and no expenses in that area will be claimed. Any points would be much appreciated :)
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    No connection to their taxes unless they are employed or receive income of some sort.
     
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  3. Finds

    Finds Well-Known Member

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    Thank you Terry, appreciate the response. I thought that would be the case, just didn't want to do anything to affect them.
     
  4. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    The main residence exemption is not that wide. For example it does not apply to a person's Pty ltd company operates from home
     
  5. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    Tax Tip 91: A Non-owner running a business at home Tax Tip 91: A Non-owner running a business at home

    The test is whether the owner could claim the interest on a loan used to buy the property. If they are not operating the business themselves they could not generally. But if the company has a lease agreement with them for part of the premises they could claim the interest, in part, and could be up for CGT when selling.
     
  6. Finds

    Finds Well-Known Member

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    So if I was leasing part of the property specifically to operate my business as my working office and I consequently claimed that as a business expense, then it could have some effect ? I do not plan to do this at all, just live here, and in order to register the company, will use the address.
     
  7. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    Definitely.
     
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  8. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    A related party "lease" seems dubious and is likely a private expense. You said : I currently live with my parents paying board. You want to reclassify this as a business expense ?
    My suggestion - Focus on the buisness outputs and dont focus on being too clever with costs like that.
     
  9. Finds

    Finds Well-Known Member

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    I have no intention to do so.
     
  10. Sam_rwd

    Sam_rwd Member

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    Just so that I am crystal clear: If I use my parents PPOR as the principle place of business for my company - it will not have any impact on their taxes nor the cgt exemptions associated with their PPOR at the time of them selling? I don't plan to claim any expenses on this address whatsoever. Thanks.
     
  11. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    Seek your own legal advice but I don't see how it could.
     
  12. shorty

    shorty Well-Known Member

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    Came here to post a similar question and found this thread.

    My question is more about privacy. If you run a service-based company from home are there any ways of not listing your residential address as the principal place of business?

    The service is providing advice, so can be conducted anywhere, including remotely or the client's home but the administration side of things would be done at home.
     
  13. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    You could list another address.

    I had a client who was being chased by bikies and he somehow managed to get ASIC to conceal his address. Not sure how.
     
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  14. captain starlight

    captain starlight Active Member

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    yes - use The address of a serviced or virtual office.
     
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  15. Ted Varrick

    Ted Varrick Well-Known Member

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    Could it be assumed he or she didn't use your address, as I assume the story would have a little more flavour?