Business News Australia.com.au

If your business employs staff, you will need to make your quarter 2 superannuation guarantee contributions by 28 January 2008.

Superannuation contributions are due each quarter and are part of your ongoing superannuation obligations. There are also a number of rules that determine if and how much you need to pay your employees.

To find out more about your obligations, recordkeeping and penalties for failing to comply, visit the Tax Office website.

Success in business can be enhanced with effective planning. To help you develop an appropriate business plan, the NSW Small Business website provides a number of guides and toolkits.

The business tools contain information on a range of topics including:

• cleaner production
• financial analysis
• risk management
• Indigenous business
• service exports.

To access these business tools or for further information visit the NSW Small Business website.

Businesses should be aware of a fraudulent email being circulated which claims to offer a refund from the Tax Office.

Subject lines for these emails could include ‘Australian Taxation Office – Notification’ or ‘Australian Taxation Office – Please Read This’. The email also links to a bogus website which looks similar to that of the Tax Office and asks for credit card and other personal details. If you receive an email like this, the Tax Office advises you to delete it immediately.

If you believe you may have provided credit details to a fraudulent website, you should contact your credit provider as soon as possible. For further information, visit the Tax Office website.

The Australian dollar hit new record highs of 90 US cents this week, after the domestic jobless rate fell to a fresh 33 year low.

The fall to 4.2 per cent in September - the lowest level since November 1974 - from 4.3 per cent in August, stoked speculation of another interest rate rise next month, pushing the unit higher. 

When the Australian dollar is doing well against the US dollar, this obviously means that the greenback is feeling, well, rather green. Texas Republican congressman and Presidential candidate Dr. Ron Paul is running on a policy that more people in America and here in Australia should be listening to and talking about. 

For once an aspiring leader of the free-world is actually leading by example and not by force and sees the U.S’s foreign policy as being one of the major sources of their economic woes. He has been voicing loudly that the Greenback’s value has been gutted because the U.S doesn’t have an export market anymore, instead it exports dollars to the world, which devalues the currency, and the world accepts it hand over fist. 

During the October 9^th Republican GOP Debate on MSNBC, Dr. Paul exemplified why he is gathering a groundswell of grassroots support all across America, raising more money on-line than any other Republican candidate, topping $5 million, as well as more donations from members of the armed forces than any of his fellow candidates, not surprising when he is the only anti-war Republican candidate. When asked about his feelings and questions on the bonanza that is the hedge funds market Paul said,”I think this is not a consequence of free markets. What is happening is a transfer of wealth from the poor and the middle class to the wealthy. This comes about because of the monetary system that we have when you inflate a currency or destroy a currency, the middle class gets wiped out so the people who get to use the money first, which is created by the Federal Reserve System, benefit. So the money gravitates towards the banks and to Wall Street. You see that’s why we have more billionaires today than ever before. Today this country is in a recession for a lot of people. Michigan knows about it, poor people know about it, the middle class know about it, Wall Street doesn’t know about it, Washington D.C doesn’t know about it, but it is because of the monetary system and the excess of spending. As long as we live beyond our means we are destined to live beneath our means, and we have lived beyond our means because we are financing a foreign policy that is so extravagant and beyond what we can control, as well as the spending here at home, and we are depending on the creation of money out of thin air, and it is nothing more than the debasement of currency. It’s counterfeit, and it is a natural, predictable consequence that you’re going to have people benefit from it and you’re going to have people suffer when you print money. So if you want a healthy economy you have to study monetary theory and work out why it is we are suffering, and everybody doesn’t suffer equally or this wouldn’t be so bad. It is always the poor people, people on retired incomes, that suffer the most, but the politicians and those who get to use the money first, like the military industrial complex, make a lot of money and they benefit from it”.  

So what happens here in Australia when someone gets hold of the economic reigns in the White House again? The horse may have bolted but Dr Paul seems to know how to get it back in the yard and locking the gate, by returning to a gold and silver standard. Something that Kennedy had put officially back on the books upon his discovery of the corrupt world federal reserve banking system and his refusal to no longer stand by idle, and something that no President since has been game to enact or overturn.

Business Reporting Burden Slashed: Savings to business$795 million per annum. 

Business owners: close your eyes for a moment and dream. 

Imagine if Australian businesses could use a single, secure, log on and sendfinancial reports to the Australian Taxation Office, the Australian Securitiesand Investments Commission, the Australian Bureau of Statistics, theAustralian Prudential Regulation Authority, and potentially, State RevenueOffices.  

What if businesses would no longer need to log in to separate systems to send financial reports to each of these agencies? Well, your dream is about to come true. The Treasurer has launched a long term initiative to cut the red tape confronting business when reporting to government.  

The Australian Government’s Standard Business Reporting (SBR) program is set to save businesses time, money and frustration. First priority will be financial reporting forms like Business Activity Statements, Company Income Tax Returns, TFN Declarations and the Quarterly Business Indicators Survey. 

The Treasury says: 

When SBR financial reporting is fully implemented, businesses will be able touse their accounting/record keeping software to automatically pre-fillgovernment reports such as BAS statements. Businesses will no longer haveto spend hours working out how to translate their own records intogovernment reports. SBR will make e-commerce with the government more viable for business. An automated system also means less errors, saving business time and effort in re-work. 

Use of SBR will be voluntary. Small and medium business will stand to benefit, with significant reductions expected in time spent preparing andsubmitting reports, and lower costs for those who assist them (such as taxagents and accountants).  

Costs to business are expected to include software upgrades, as well as learning about SBR and seeking professional advice. The Australian Government will work closely with software companies to enhance products already used by business. SBR will also work closely with business and those that support them, such as accountants and tax agents, to make sure that it delivers maximum benefit for the Australian business community. 

SBR will be co-ordinated by the Treasury and will bring together participatingagencies to streamline their business reporting needs. A range of pilots andtrials will commence from mid-2008. It is anticipated that the full implementation for financial reporting will be complete in mid-2010, with take-up by business escalating over the subsequent three years. The cost of the programme will be $208.1 million over the next three years. When fully implemented the SBR program will benefits business an estimated$795 million per year on an ongoing basis. 

Submitted by
George Ilk, Argosy Partners www.argosypartners.com.au

*This information is not a complete guide to selling your business, every business differs in it needs and legal obligations. We recommend that you seek qualified legal advice beofre selling your buisness. 

Selling your business is one of the most important decisions you’ll have to make. Deciding how much your business is worth is one of the main issues you’ll need to consider.Other factors to consider when selling your business include when is the best time to sell and whether you should make use of a broker or other professional to maximise selling opportunities.

Valuing your business There are a number of methods for valuing a business, including valuing the goodwill component. To realistically value a business you need a good understanding of the marketplace. Over a period of time an industry usually develops its own rules of thumb by which a business is to be valued. There are also formulas that can be used to arrive at the approximate value of a business. One of the most important factors to consider when calculating the value of a business is its future earning profitability. 

Bankruptcy & insolvency If you can’t pay your business debts, and haven’t been able to reach an agreement with your creditors, then you may decide to go bankrupt. The Insolvency and Trustee Service Australia (ITSA) is the government body responsible for the administration and regulation of the personal insolvency system in Australia.Before you become bankrupt, you must read ITSA’s Prescribed Information booklet, which gives you details of alternatives to bankruptcy and the obligations and consequences of bankruptcy. To apply to become bankrupt you need to lodge these documents with ITSA:

• a debtors petition
• a statement of financial affairs
• a signed acknowledgement that you have read the Prescribed Information booklet.

Deregistering or winding up a solvent company If you’re going to end your business, you may decide to wind up the company, or simply deregister it.

Deregistering a company You can deregister a company if:

• all members of the company agree to deregister; and
• the company isn’t carrying on business; and
• the company’s assets are worth less than $1000; and
• the company has paid all fees and penalties payable under the Corporations Act 2001; and
• the company has no outstanding liabilities; and
• the company isn’t a party to any legal proceedings.

ASIC provides information on deregistering a company, including the necessary downloadable form. For further information phone 03 5177 3988.

Winding up a solvent company The members of a solvent company, who’re unable to deregister, may decide to wind up the company. The Australian Securities and Investments Commission (ASIC) website provides information on steps that must be taken and the required forms that must be lodged when winding up a company.

Cancel your business name If a business name is no longer required you’ll need to complete and lodge the appropriate forms with your relevant state governments. The time allowed to lodge the form following cessation of business varies from state to state.

Australian Capital Territory

• Complete the cessation of business name form when you cease to carry on business under your registered business name. It should be lodged within 14 days of the cessation, however the Registrar-General may extend this period.

New South Wales

• The Application to cancel registration of a business name form (Form 5) should be completed and lodged with the NSW Office of Fair Trading if your business name is no longer required to be registered. For further information, phone 133 220.

Northern Territory

• In the Northern Territory you’re required to complete the notice of cessation of business form (Form 5) when your business ceases operations under a business name. For further information please phone the Department of Justice on 08 8946 9530.

Queensland

• The Cessation of business under business name form is to be completed and lodged with the Qld Office of Fair Trading to cancel a business name when no longer required. For further information phone 13 13 04.

South Australia

• The application for cancellation of a business name form is available from the Office of Consumer and Business Affairs. For further information phone 1300 138 918.

Tasmania

• For cancellation of a business name, you must lodge a Changes in Particulars/Cancellation of a Business Name Form with Consumer Affairs & Fair Trading within 28 days of date of change. For further information phone 03 6233 4523.

Victoria

• To cancel your business name registration complete the Ceasing business under business name form located on the Consumer Affairs Victoria website.

Western Australia

• When your business ceases to operate under a registered business name you must lodge a Notice of cessation of business under business name (Form 5) with Consumer Protection within one month after the cessation date.

Transferring ownership

At some point you may need to transfer part or all of your ownership of a business to your children or bring in a new business partner.You can meet the specific needs and objectives of family members and or a new business partner by issuing different classes of shares. This allows you to determine what level of influence they will have over the operation of the business.The main advice many small businesses require relates to the tax implications of the transaction-based events associated with selling or closing their businesses. This advice may involve separating business and property assets to facilitate the transfer of trading businesses.What to do…

• See the Tax Office ending a business essentials page.
• Contact your accountant or solicitor for advice on how to transfer ownership.

Taxation issues

You must tell the Tax Office if you have ceased trading or your business has been sold. You must also cancel your various registrations, such as Australian Business Number; Goods and Services Tax; Luxury Car Tax; Wine Equalisation Tax; Pay As You Go; or Diesel and Alternative Fuel Grant Schemes.Keep your details up-to-date to make sure that any activity statements the Tax Office sends you reflect your current situation. All activity statements that are sent to you must be lodged – even if this is a ‘nil’ report because you have not traded in that period – and paid by the due date.More information…

• Read the Tax Office changes in circumstances essentials.

What to do…

• Tell the Tax Office your business has ceased.
• Complete the application to cancel registration form.
• Phone the Tax Office on 13 28 66.
• Speak to your accountant, solicitor, or tax adviser.
• Contact your relevant state office for forms to cancel your pay-roll tax registration.

Dealing with employees

When a member of your staff leaves your employment, you’ll generally have to make some sort of final payment to them. Many of these payments are known as eligible termination payments (ETPs). Depending on what’s included in the payments you make, you’ll need to take out different amounts of tax.You may also be generally required to make a bona fide redundancy payment. This is a payment made to an employee who is dismissed because the job they were doing is made redundant.The Tax Office provides guidance on meeting your obligations to employees who stop working for you.

What to do…

• Read Tax Office’s ETPs - a practical guide for employers in meeting your obligations to employees who stop working for you.
• Visit the Australian Workplace website for information about job loss.
• Read about termination of employment on the Workplace Ombudsman website.
• See our topic on ending employment.

ASIC has released a consultation paper on proposals to improve disclosure to retail investors in the $8billion unlisted and unrated debenture market.The improved disclosure measures (for consultation) are based on an ‘if not, why not’ basis of reporting. That is, issuers would report to investors against certain principles and benchmarks, which they should follow or explain why they may not have followed those principles and benchmarks.‘The fundamental objective is to provide retail investors, and their advisers, with more investor information to make their decisions before they invest and then on an ongoing basis’, ASIC’s Chairman, Mr Tony D’Aloisio said.The consultation paper is the next major stage in ASIC’s Three Point Plan to deal with unlisted and unrated debentures, announced by Mr D’Aloisio at a hearing of the Senate Standing Committee on Economics on 30 May 2007. Since the Senate Committee hearing, ASIC has further analysed the unlisted, unrated debenture market and consulted a range of industry experts on the risks of the business models commonly used by issuers of these investments. ASIC’s proposals are built around four key principles which focus on additional and improved disclosure. They are designed around:

1. providing benchmarks (such as credit rating of risk, liquidity and capital adequacy) to help retail investors and their advisers to assess risk and the risk-reward prospects of unlisted and unrated debentures;
2. requiring disclosure against those benchmarks;
3. requiring those involved with issuers (e.g. trustees, advisers, valuers and auditors) to use those benchmarks in carrying out their responsibilities; and
4. educating investors and potential investors to understand those benchmarks and use them in their decision-making process.

The additional disclosures ASIC proposes are to be on an ‘if not, why not’ basis. The ‘if not, why not’ basis of disclosure would be the basis of prospectus disclosure and the ongoing disclosures issuers must make.

ASIC’s consultation paper also proposes that advertising for these products should not use words such as ‘secure’ and ‘safe’ and should either disclose a credit rating on repayment of principal or state that no rating exists and there is risk an investor may lose some or all of their capital. For retail investors, ASIC plans to produce an Investor Guide to aid their understanding of disclosure documents and conduct an education campaign to improve understanding of such matters as the need for investment diversification.

‘We would like to test our proposals and hear from all those involved on whether we have the right balance between improved disclosure for investors and not unduly restricting this market as a means of raising capital’, Mr D’Aloisio said.
ASIC’s consultation paper provides an appendix which lists issuers of unrated and unlisted debentures. The appendix is a listing only and does not signify any particular level of risk with those debentures. It is simply a list of unlisted and unrated debentures.

Background

Comments on the Unlisted, unrated debentures – improving disclosure for retail investors consultation paper are due 1 October 2007. ASIC will consider submissions before publishing a regulatory guide in October 2007. New fundraising documents are expected to comply with the new ‘if not, why not’ benchmarks from 1 December 2007.

The benchmarks that are proposed serve as the basis for enhanced disclosure. They cover credit ratings, adequate equity capital, adequate liquidity, lending principles (loan to valuation ratios), loan portfolio diversification, valuations, related party transactions and rollovers.

ASIC is proposing reporting on an ‘if not, why not’ basis against these benchmarks:

1. Issuers should have their debentures rated for credit risk by a recognised agency, and have that rating disclosed in the prospectus and advertising.
2. Issuers should have a minimum of 20 per cent equity where funds are directly or indirectly lent to property development. In other cases, the equity should be a minimum of 10 per cent.
3. Issuers should estimate their cash needs for the next three months and have cash on-hand to meet this need.
4. Issuers lending money to property development should be required to maintain a 70 per cent loan to valuation ratio on ‘as if complete’ valuations and 80 per cent on the basis of the latest market valuation.
5. Issuers should disclose how many loans they have, or expect to have, over the coming 12 months by number, value, location, activity and percentage of secured loans.
6. Valuations should be provided. Development property assets should be valued on a cost, ‘as is’ and ‘as if complete’ basis with all three disclosed.
7. Issuers should disclose how many loans they have, or expect to make, to related parties over the next 12 months and what assessment and approval process the follow for such loans.
8. Issuers should disclose their approach to rollovers, including default rollovers.

Download a copy of the consultation paper http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/CP_89_Unlisted,%20unrated%20debentures.pdf/$file/CP_89_Unlisted,%20unrated%20debentures.pdf

Having the right structure is an important issue to consider when starting or developing your business. If you decide that an incorporated business is best for you, the Tax Office’s Incorporating your business publication can assist you in understanding your taxation obligations.

Incorporating your business provides information on a range of issues including:

• whether to incorporate your business
• how to register as an incorporated business
• taxation and superannuation obligations and capital expenditure
• relevant forms and other publications.

For further information on incorporating your business, visit the Tax Office website.

On 1 July 2007, the Goods and Services Tax (GST) threshold was raised from $50 000 to $75 000. If your business has an annual turnover of $75 000 or more, you will need to register for GST.

If you are a non profit organisation, you must register for GST if you have an annual turnover of $150 000 or more. If you provide taxi travel as part of your business, you must register for GST regardless of your annual turnover.

For more information on GST, visit the Tax Office website.