Starting up registration
 

Could anyone advise on starting up in adult based in Australia. If the website is affiliate only, is it worth registering a company name or just using an ABN/Sole trader? I'm looking mainly at cams and dating. Also, would it be worth registering a company in EU instead? If I wanted to take payments in the future this would be a better option as CCBill etc. aren't accepting Aus companies.

Any advice appreciated.

Definitely go with EU company,irish or cyprus company.Lower taxes and no bullshit regulations.

Thanks Klen. That seems to be in sync with what I'm reading. How do I go about that from here in Oz? Is it straight forward to register business address/bank accounts?

This is the best way to do it.

Create a Trust.

Create a Holding Company that is the trustee for that Trust.

Then create a Company that is owned by your holding company as trustee for the trust.

Then create a foreign company (if you want to do overseas billing) which is owned by your trading company (not the holding company)

You will need a nominee director (if an overseas company) to execute contracts and agreements for billing companies.

Set up a license agreement on paper between your trading companies and your trustee company that cause all content to be owned by the holding company and licensed to your trading company, then you can pass revenue in return for the license fee to your holding company.

If your trading company fails then the revenue/holdings/assets of the holding company are preserved and you avoid losing everything.

Each entity will need it's own ABN. An ABN for a company is two digits and then the entire ACN of the company. The Trust will have it's own unique ABN which is determined by the Australian Business Register.

You need to see an accountant for correct advice to your specific circumstances but you don't need an accountant to actually setup the trust and company as this will cost more.

To set up the trust you use a service called ClearDocs http://www.cleardocs.com/products-di...ary-trust.html

To set up a company there are plenty of reputable online company formation companies that will do an Australian Pty Ltd company for the $450 - $550 mark.

Now it's VERY important that before proceeding you find an accountant you trust and like and then avail yourself of advice particular to your own circumstances. It is very easy to fuck this up and risk all of your assets, which is not something you want to do.

Sounds like you are expert for hiding things :1orglaugh

It's got nothing to with hiding things, it's a way to protect your assets should your business venture fail. Any decent accountant will advise you to do this, because if you don't and you just have a trading company, then you can lose your house, car, savings, everything if your company fails.

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.

Strange,there is no LLC type of company in Australia ? I mean,here you can fuck up things pretty hard,yet you can open new company without problem.Tho think there was a new regulation which forbid to those people which fucked up to open new company,but still they wont lose their assets due it.

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.

The equivalent of an LLC is probably a proprietary limited company, they used to protect you but not any longer, there are many more circumstances now in which shareholders/directors can be held liable for loss or failure.

Well,if a ceo fucked up company by diverting company assets to buy bullshit stuff like car,house,yacht,whatever instead investing it or serving company bills then he should be definitely liable. But if company failed
due higher force like market crash or anything else like that,then he shouldn't be liable,that is very anti entrepreneurship.

It's pretty much the same here, except for the fact that if you're going to be owning overseas entities and having nominee directors you increase the risk, so you want to shield yourself from that risk.

There are also unintentional or inadvertent mistakes a company director might make, anyone can make a mistake, which could cause you unwanted liability. So the safe thing to do is have a holding company/trust structure to protect you from any turn of events.

I definitely will. Thanks for the advice. Happily I posted my query before starting up!

With the above restrictions etc. in mind, would it not be wiser, as Klen says, to register a company overseas? I guess either way, there would be tax liabilities in Australia.

Well,cant speak for Australia as i dont know their laws,but general rule which should apply to every country is:
-If you doing computer work,and you doing work with foreign entities only,then you should pay company tax and being liable only to country where you registered company,while for your personal income you pay tax to country where you reside.

You would register a company overseas if you were going to do billing overseas as Visa/Mastercard won't process for adult websites in Australia (there are some exceptions to this).

What you want to avoid is what is known as double taxation. If you directly registered a company in your name overseas with a nominee director you would pay company tax in that jurisdiction. However you would also pay personal income tax here. So essentially you will be taxed twice.

If you had a trust/holding company setup then created a trading company which in turn owns the foreign entity you can have all of the IP owned by the holding company and license that IP to any of your local or foreign trading entities. Then you can shift profit, in the form of license fees or management fees back to your holding company. The company tax rate here (presuming all of the budget gets passed) will become 29c. The marginal tax rate for an individual can be as high as 45%. You don't want to be paying 45% tax on income you have already paid company tax on overseas, even if it's in a low tax country like Ireland.

AdultKing, another question, if the website was solely affiliate in nature, basically linking to approved programs or white labels, would it be ok to use a sole trader ABN? If you're not producing or stealing content, would there be that many legal problems? The reason for asking that is that as a new affiliate, the website may be a bust and canned after a couple of months. Would it be better to start small and form a trust/company if/when the project grows?

I'd never operate as a sole trader, for anything.

Yeah sole trader usually means full responsibility no matter what.

Thank you.

Another quickie here: Protecting privacy. I can register sites with id protection, but with the abn/acn setup, is it possible to protect my personal information? I'm guessing not as the company needs to be public and the abn needs to be displayed on the website? ...

Way too much info for someone just starting out, and with nothing more than an affiliate site at that :uhoh

Wait until you make more than 2 sales a month (ie. in 3 years from now) and then go ahead and setup your company. :thumbsup

You can't hide your information on ASIC registers unless you are exempt either through a determination from ASIC or from appearing on the electoral roll due to security / personal safety reasons which are quite strict.

You shouldn't be asking these questions here, you should be paying a CPA to give you proper advice. If you try to set these structures up by yourself without detailed knowledge of the law as it relates to tax and companies then you will come unstuck.

That sounds like an incredible lot of bother to test whether you make money as an affiliate. Why do you need asset protection for this? Who are you going to owe large sums of money that you have no intention of paying, if affiliate promo turns out not to be your thing?

overkill for an affiliate who hasn't sent a sale yet.