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Originally Posted by Goethe
Wow, thanks for that post AdultKing, certainly puts things into perspective. I've been looking at company registration as a way to preserve my assets should there be any problems down the road. Is the trust necessary if there is a limited company in place?
I'll certainly have some pointers to take to my accountant now. Thanks again for a very informative post.
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Yes a trust and a holding company is essential.
The reason is this, you never trade from your holding company, it simply owns your trading company. If the trading company fails you are left with your trust & holding company which protects your assets and those of the trust & holding company.
If on the other hand you just start a company , you're the only shareholder, director and secretary. In this scenario if something goes seriously wrong you might, in some circumstances, be held personally vicariously liable for any debt or loss or lability incurred by your company. If this happens then those liabilities can impact your own personal assets and this is definitely not something you want to happen.
Lots of people just set up normal companies, appoint themselves as the only director, shareholder etc and trade from those but in this case you are not as protected as you once were under company law. There are many more instances now in which the direct owners of companies can be personally liable for liabilities of proprietary companies - so you need to insulate yourself from that risk.
Don't do anything before speaking to a good CPA. Make sure you deal with a CPA who is also a registered tax agent. Let me repeat because it's very important, don't do anything before you get advice from a CPA which relevant to your circumstances. Everyones personal circumstances are different and there are very specific steps in setting up a trust-holding company-trading company-foreign company structure. If you do it wrong, you could end up in the shit if one of the trading entities failed.
For the sake of a few hundred bucks to a grand, get proper advice and set up the proper structure before you begin, it will save you worry and stress in the long run.