4 Replies to “Ceasing or Winding up your business – what to tell the ATO”

  1. Hi Andrew,
    I currently have a business that has been operating 3 years and is now making a small profit. I bring to the business a strong administrative and customer service background, a growing customer base and hard earned credibility (I live in a regional area where you have to earn your stripes to be accepted as a credible businesses), I also have a small but increasing level of passive income. The area I lack is primarily technical skills which are imperative to move the business forward.

    Recently I came across a young man who appears to have the skills and drive to complement the areas I am weak in. My instinct tells me that I should provide a strong incentive to him to invest his skills in my business. I am certain that our combined strengths will produce excellent results.

    I am currently a sole trader and would like to consider offering him an equal partnership however I am not sure how to go about this or what sort of due diligence I need to do before even bringing the issue up with him and I do not want to suggest it until I am 100% comfortable. Are there ways that I can do background checks etc to ensure that what I know of him and what is presented in his CV pans out? I am generally a very good judge of character and he has all the right “vibes” so to speak however I do not want to base a business decision on vibes and need to understand how to go about getting more concrete information. Any advice you can give would be appreciated.

  2. Thank you for your question.

    Yes there are background checks that you can do. For example:

    – Bankruptcy Search to check if he an undischarged bankrupt or has been a bankrupt in the past (we can do this for you)
    – Credit History Report (credit reporting company)
    – Court registry searches (free online)
    – Company director search to check what companies he may be a director of in Australia (we can do this for you)
    – Goggle his name and the name of any previous ventures he has represented as being involved in

    If your potential partner claims to own real estate this can be verified by search. (we can do this for you)

    There is no substitute for speaking tho his referees and asking them questions like:

    – Would you go into partnership with this man?
    – Do you have any concerns about him?

    If he has not provided you with the names of referees, I suggest that you ask him for two or three names and contact details and that they be people of standing in the community.

    Before you offer him partnership, offer him a job or a contract and work with him for a while. The best test or character, compatibility, dedication, ease of decision making etc is “on the job testing.”

    Well done for being careful.

  3. My partner is currently a sole trader and is contracting as a caretaker to the people who have the management rights for a couple of residential complexes. They have requested my partner change from a sole trader to a company. (They will pay for the registration). Would this be beneficial to my partner and why would they request this?
    Thanks, Allie.

  4. These are all great questions that you need to take specific legal advice from a family lawyer about. Sorry for the delay in response but I have been away.

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