Business Development

The importance of directors ensuring that their company maintain proper financial records has again been highlighted in a recent insolvency matter heard in the Supreme Court of NSA that resulted in a director indemnifying the Australian Taxation Office for monies that the ATO was required to repay to the company's liquidator.

Now that the 30 June end rush is over and the 'window' for entering into contracts to qualify for the 30% investment allowance has closed for larger businesses, it is a good time to take a breath and review what opportunities are still available for taxpayers in relation to the investment allowance.

The government has announced that it will deliver its free superannuation clearing house service for small business through Medicare Australia.

The clearing house service will be available free of charge for small businesses with less than 20 employees from July 2010. Small businesses will be able to register for the service from May 2010.

Key features of the superannuation clearing house include:

With tax time coming, it might be worthwhile revisiting whether your business is entitled to any small business concessions.

Small businesses with an annual turnover of less than $2 million may be eligible for a range of tax concessions, including the following:

• small business tax break;
• capital gains tax (CGT) exemption for assets you have held for at least 15 years;
• CGT 50 per cent active asset reduction;
• CGT retirement exemption;
• CGT roll-over for replacement assets;

Draft legislation has been released which will facilitate access to corporate losses for companies with shares that have unequal rights to dividends, capital distributions or voting power. 

This legislation may apply to companies with multiple classes of shares (ie where the different classes of shares have unequal dividend, voting and/ or capital rights), such as a company with preference shares.

The draft legislation makes it clear when such companies can utilise revenue losses, capital
losses and bad debt deductions. 

A reminder that the 50% Investment Allowance finishes at the end of this month.

In the Federal Budget the Government increased the small business tax break boost from 30% to 50% of the cost of eligible assets purchased between 13 December 2008 and 31 December 2009, and installed by 31 December 2010.

The allowance is available for all businesses with the following conditions:

With the economy starting to revive, businesses should review their plans for growth and the financial robustness of their operations.  We are starting to see the first real glimpses of economic recovery but how well placed is your business to capitalise on opportunities as they start to emerge?  Do you have a clear understanding of your company's financial health?

Take a moment to determine how your business stakes up against the 10 metrics outlined in this attached article from 'My Business' magazine, November 2009.

Financing of debt has rarely been tougher for small businesses, but there are ways that you can improve your chances - as outlined in this artical from 'My Business' magazine, November 2009. 

We work so hard to get clients, yet often we forget how important it is to maintain a relationship with them once we have them onboard. It is essential to value your clients and make them feel special, it will make life easier for everyone involved – and they will love you for it.

In tough economic times, many small businesses struggle to manage their cash flow adequately. Where they once thought they were cruising along nicely, a bump appears in the road and they are thrown off course. All business owners should undertake what the experts call a ‘stress test’ of the business and have risk management strategies in place to ensure the business survives bumps along the way.