Business Structure: Chaper 8 - The Annual Business Structure Review
- Future Accounting
- 2 days ago
- 6 min read
Written by: Melissa Cunliffe (CA)
Why yesterday's perfect structure may not be today's best structure
"Businesses don't outgrow their structures overnight. They outgrow them gradually."
One of the biggest misconceptions I see is the belief that once a business structure has been established, the job is finished.
The ABN has been registered.
The company has been incorporated.
The trust has been established.
The accountant has lodged the tax return.
Everything must be fine.
Right?
Not necessarily.
In reality, business structures don't become ineffective overnight.
They slowly drift away from the needs of the business.
Your business grows.
Your family changes.
Your assets increase.
The law evolves.
Your goals become different.
The structure remains exactly the same.
Eventually the gap between where your business is today and the structure supporting it becomes wider and wider.
That is why I believe one of the most valuable advisory conversations any business owner can have is an Annual Business Structure Review.
Think about your own life
Let's step away from accounting for a moment.
Think about all the things you review every year.
You service your vehicle.
You renew your insurance.
You review your investments.
You visit your doctor.
You replace worn equipment.
You update your technology.
Why?
Because everything changes.
So why would the legal structure supporting your family's wealth be any different?
The reality is...
It isn't.
Future Prosperity Insight
The purpose of a Business Structure Review isn't to find something wrong. It's to make sure everything is still right.
The six biggest reasons structures change
After working with business owners for many years, I've noticed the same six triggers appear time and time again.
Let's look at each one.
Your business grows
Growth changes everything.
More employees.
Larger contracts.
Greater profits.
More commercial risk.
Additional borrowings.
Expansion into new locations.
The business that once comfortably operated from your spare bedroom may now employ twenty people.
Growth is exciting.
But growth also creates responsibility.
One of the questions I ask clients is:
"Has your structure grown at the same pace as your business?"
Sometimes the answer is yes.
Sometimes the answer is...
"I'm not sure."
That's exactly why reviews matter.
Your family changes
When you started your business, perhaps it was just you.
Fast forward ten years.
You're married.
Children have arrived.
Perhaps one of them has joined the business.
Retirement suddenly feels much closer than it once did.
Family circumstances influence business structures far more than many people realise.
Questions begin appearing that never existed before.
Should the children become shareholders?
How will succession work?
What happens if someone wants to exit?
Who ultimately controls the trust?
These aren't tax questions.
They're family questions.
Good business structures help answer them.
Your assets grow
One of my favourite milestones to see is when clients begin purchasing long-term assets.
Commercial property.
Investment property.
Share portfolios.
Equipment.
Cash reserves.
Because it tells me they're building wealth.
The next question becomes:
"Is everything owned in the right place?"
Notice I didn't ask:
"Is everything owned?"
Ownership matters.
Sometimes more than people realise.
From Melissa's Desk
One conversation before settlement can often achieve far more than ten conversations afterwards.
Once an asset has been purchased, changing ownership may trigger Capital Gains Tax, stamp duty, refinancing costs and unnecessary complexity.
Planning before purchase creates options.
Planning afterwards often creates costs.
The law changes
This is particularly relevant today.
Legislation never stands still.
Federal Budgets.
Court decisions.
ATO guidance.
Payroll tax.
Superannuation.
Division 7A.
Trust taxation.
Every year something changes.
That doesn't automatically mean your structure needs changing.
But it does mean your structure deserves reviewing.
Good planning adapts.
It doesn't panic.
Your attitude to risk changes
When you first started your business, perhaps you owned very little.
Now things look different.
You own a family home.
Commercial property.
Investments.
A profitable business.
Suddenly the conversation shifts.
It's no longer:
"How do I build wealth?"
It's:
"How do I protect what I've already built?"
That shift is one of the most important moments in a business owner's journey.
Your goals change
This may be the most important trigger of all.
Think back to why you started your business.
Perhaps you simply wanted to replace your wage.
Today your goals might be very different.
You might want to:
work fewer hours;
travel more;
employ a management team;
purchase additional investments;
help your children into the business;
prepare for retirement;
sell the business.
Your structure should support those goals.
Not the goals you had ten years ago.
The biggest mistake I see
Business owners often assume that because nothing has gone wrong...
Nothing needs reviewing.
I call this the "she'll be right" approach.
It sounds something like this.
"We've always done it this way."
Maybe you have.
But ask yourself this.
If you were starting the business today...
Would you build it exactly the same way?
If the answer is no...
Your review has already become worthwhile.
Future Prosperity Insight
Confidence isn't knowing your structure is perfect. Confidence is knowing you've reviewed it recently.
What happens during a Business Structure Review?
Many people imagine a highly technical meeting.
In reality, most of the conversation has very little to do with tax.
Instead, I usually begin by asking questions.
Questions like:
Where is the business heading?
What keeps you awake at night?
Are your children becoming involved?
Are you planning to buy property?
Do you expect significant growth?
What would success look like in ten years?
Only after understanding your future do we begin assessing whether your current structure is still helping you get there.
That's because business structures should support your future.
Not simply record your past.
The cost of not reviewing
This is something many business owners don't consider.
A review doesn't always identify problems.
Sometimes it simply provides reassurance.
But occasionally...
It identifies an opportunity.
Perhaps a property hasn't been purchased yet.
Perhaps succession can begin earlier.
Perhaps the trust deed needs updating.
Perhaps proposed legislation has created new planning opportunities.
Those opportunities are often worth considerably more than the cost of the review itself.
From Melissa's Desk
One of my favourite meetings each year is the one where I tell a client:
"Everything is still exactly as it should be."
That's a great outcome.
Not because we changed anything.
Because we've confirmed the structure is still supporting where the client is heading.
Sometimes certainty is the most valuable advice we can provide.
Preserve • Protect • Prosper
Preserve
As legislation, assets and family circumstances evolve, preserve flexibility by reviewing regularly.
Protect
Review your structure before risks become problems.
Protect your family, your business and your future.
Prosper
Business owners who plan ahead generally have more options than those who react after the event.
Annual reviews help keep those options open.
Key Takeaways
Business structures should evolve as your business evolves.
Reviews are about confidence—not complexity.
Growth, family, assets, legislation and succession all trigger review conversations.
Annual Business Structure Reviews often identify opportunities before they become problems.
Good advice is proactive, not reactive.
Ask Yourself
When was the last time I reviewed my business structure?
What has changed in my business over the past three years?
If I were establishing my structure today, would I do anything differently?
Common Mistake
Treating your annual tax return meeting as your annual Business Structure Review.
They're two completely different conversations.
One looks backwards.
The other looks forwards.
Both are important.
But only one is focused on building your future.
Planning Opportunity
Schedule your Business Structure Review separately from your tax planning meeting.
Allow enough time to discuss:
where your business is heading;
future investments;
succession;
family goals; and
legislative changes.
The best planning conversations are never rushed.
3 P's Action Step
Open your calendar right now.
Choose a month each year—perhaps shortly after the Federal Budget or before tax planning—and create a recurring appointment titled:
Annual Business Structure Review
Treat it with the same importance as your annual tax planning meeting.
Your future self will thank you for it.
Book your Business Structure Review today and take the first step towards protecting, preserving and prospering.
Disclaimer  
This article does not constitute financial advice and is for general information only. It does not take into account any individual’s personal objectives, situation or needs, and is not intended as professional advice. Any similarity to an individual’s personal circumstances and the examples provided in this article is purely coincidental. Any person acting upon such information without receiving specific advice, does so entirely at their own risk.  
Authorisation under an Australian Financial Services Licence (AFSL) is not required in the provision of this article and the author plus Future Accounting Group Pty Ltd is not acting in its capacity as an Australian Financial Services Licence holder 
Liability limited by a scheme approved under professional standards legislation.