What do you need to know?

Lisa Galbraith, CEO

As an online provider of legal documents, we take a broad range of questions from our customers – from people setting up their own businesses and super funds etc., from advisers, and from adviser’s support staff.

Often these questions are very specific to the caller’s situation and require the expert advice provided by our legal partner, Maddocks or other legal experts. But some questions are very broad. What is interesting about these calls is that they show both:

• that people are trying to become more informed about business, tax and legal structures; and
• that the material available is not addressing their needs or starts at the wrong level — that is, it assumes a level of knowledge that the person doesn’t have.

Helping to educate and inform our customers is a key priority for us. We are not looking to replace the legal expert, or other advisor, but we are trying to help people feel more informed so they can ask better questions. For example, as a reader of our website you are alerted that:

• if you work in a support role in an advisor firm, we regularly update our help and FAQ based on the questions that other support people are asking and we provide information that helps you understand what the adviser you are helping is trying to achieve, and how it all fits together for your firm’s client; and
• if you are an adviser, then you are alerted to innovations in the options available and to the legal developments relevant to your clients’ decisions.
• if you are the end client, then you can ask your financial planner: Does the SMSF deed you are recommending allow me to borrow? What option does the deed provide for death benefit arrangements? Why are you recommending a particular approach? ;

Better informed people make better decisions and are likely to manage structures better.

So what is Cleardocs doing?

Internally, we have been exploring how we can be more effective in playing an “educative” role —to our professional customers, to their support staff, and to people ordering documents for themselves.

The challenge has been to select the best ideas. Look out for changes in the coming months. For example:

• We are consolidating the vast amount of user “help” text, “FAQ” type of information, and newsletter articles, so that it’s quicker and easier for you to find and use;
• For our monthly newsletter ClearLaw, we have asked Maddocks to include articles that are more general in nature. For example, in February you may have noticed Part 1 of an article comparing the different trust structures – what are the benefits and things to be wary of when choosing a discretionary trust Vs a unit trust (both fixed and non fixed) Vs hybrid trust. Based on the feedback we have received, I’m sure Part 2 will be keenly read.
• We are linking more to the ATO, ASIC and other government bodies which provide an excellent source of information.
• We are exploring different mediums for providing information – video, webcasts etc.

Get involved

As we roll out these changes, please let us know what articles you find, or would find helpful. We’ll see how we can help. Drop us an email at support@cleardocs.com we would love to hear your thoughts.

A remarkably helpful ATO

Danni Kirwan, Marketing Executive

While researching a topic for my blog this week, I stumbled across a new page on the ATO website – Small business support.

Now I’m sure that when many of us think of the tax office, our thoughts are less than complimentary... But after a peek around this new section of the site, I must say I was pleasantly surprised by what’s on offer.

On the Cleardocs helpline, we regularly get calls from customers registering new companies, excited about the prospect of starting their own business and pursuing their passion. But whether your passion is painting houses, baking cakes or grooming dogs, chances are you’ll be paying tax.

So although you’re almost certainly an expert at what your business does, you may not be quite on top of the tax obligations you will have to consider as a small business owner. Even if you employ an accountant to take care of these issues, it’s still a good idea to know the basics about what’s required of you.

The Small business support page, which can be found here, links to a number of pages with useful information about the types of things you will need to consider as a small business owner. Topics covered include “starting your small business”, “complying with your tax obligations” and “reporting and paying tax”. Each topic covers issues that you may come across as a business owner, why they may affect you, and additional information to help you find out more.

So wether you’re thinking about starting your own business, or you’re about to wind one up (there’s info about that too) you may find something on the site that’s useful to you. Cleardocs is proud to be a part of your journey as a business owner, but we also recognise the fact that what we help you with is just the beginning of a long path – so remember there’s tools and resources out there that can help you along the way.

Self Managed Superannuation – With Greater Control Comes Greater Risk

Danni Kirwan, Marketing Executive

The poor performance of retail super funds since the start of the GFC has seen many investors make the move to Self Managed Superannuation Funds (SMSF’s).

Statistics released by APRA show that as of June this year, there were approximately 410,000 SMSF’s in Australia – an increase of 27,000 on the previous year alone. Over the same period, SMSF assets increased by $2bn while assets in retail super funds dropped by 9% to $306bn.

While many investors make the move to an SMSF to gain greater control over how their money is invested and managed, it is vital that they realise that this also translates into a greater risk to their investment.

Here are some things that you should consider when deciding whether an SMSF is right for you:


Your responsibilities as an SMSF Trustee

First and foremost, as the trustee of an SMSF it’s your responsibility to ensure that the money of the fund is invested appropriately. Being the trustee of an SMSF carries a number of responsibilities – so if your fund has more than one trustee make sure that the others are people that you can trust. A Self Managed Super Fund won’t be able to claim compensation under superannuation law if fraud or theft occurs within the fund.

As a trustee, it’s also your responsibility to ensure that your fund is administered properly. Although Cleardocs offers you a legally sound and cost effective way to establish your fund, there is ongoing work required to ensure that your fund remains compliant in the ATO’s eyes. If your fund is deemed to be non-complying by the ATO, then you could end up losing up to 40% of your superannuation assets. Even if you seek professional advice, as a trustee you are still responsible for any mistakes made in the management of your fund.

If you do decide to get professional assistance in devising your investment strategy, or administering your fund, then make sure that your adviser is licensed to give you investment advice. This requires them to be “RG146 compliant”. RG146 refers to the minimum training requirements put in place by ASIC for anyone who provides financial product advice.


Where to find out more

Although operating your own SMSF can be complex at times, it’s also a great way to maintain control over your own money – and in turn, your retirement. Careful planning and management of your fund will help to ensure that your fund remains compliant – a key factor in this regard is ensuring that you stay abreast of changes in superannuation law.

On the Cleardocs website you will find a wealth of ClearLaw articles written by our lawyers at Maddocks focusing on issues relating to SMSF’s. You can also update your SMSF deed with Cleardocs for just $99 – ensuring your deed complies with the most recent law.

You can also find information and helpful tips for SMSF trustees on ASIC’s “FIDO” website, here.

You’ve Registered your company … now what?

Danni Kirwan, Marketing Executive

Cleardocs help you quickly and easily register your company online — but there are a few more things you’ll need to do to get your company up and running and to go on looking after it. Here are some tips:

Notify the ATO of the company’s Public Officer

If you register your company with Cleardocs, then we provide you with an addressed letter to the ATO notifying it of your company’s public officer. You need to sign this letter and send it to the ATO so that it knows who to contact if it has any queries about your company.

You need to make sure you notify the ATO of your company’s public officer within three months after the company is registered. If you decide to change the public officer of your company in the future, then you need to notify the ATO of the change within 28 days.

Wait for your corporate key

ASIC issues you your corporate key after your company is registered. It will be posted to the registered office of your company. Once you have your corporate key, which is an 8 digit number, you can register to lodge documents to ASIC, or view statements from ASIC, online.

If you lose or forget your corporate key, then you can request a new one from ASIC here.

Register for an ABN and TFN

You will need to get an Australian Business Number (ABN) and a Tax File Number (TFN) for your new company.

Registering for an ABN and TFN yourself is free. You can use the same form to apply for both online at the Australian Business Register, here.

If you complete the application online, then you should generally be notified of your ABN number immediately. However, if the ATO needs to verify any information in your application the issuing of your ABN might be delayed.

You will be notified of your companies TFN by mail, and that can take up to 28 days.

Open a bank account

You’ll probably need to open a separate bank account in your company’s name. When you go to the bank to open your account, the bank will most likely ask to see your company’s Certificate of Registration (from ASIC) and your other company documents including your constitution and your directors’ signed consent forms.

What if you haven’t got any documents … ? If you registered your company directly through ASIC and don’t have any company documents all’s well – Cleardocs has a package created specifically for this purpose. Our Registration Documents Only package is $137.50 and includes all of the documents for your existing company as though you had just registered it.

Keeping your company’s records up to date, changing your company details

Over time, details of your company may change – like the address of your registered office, or the directors of the company. It’s important that you notify ASIC of any changes to your company. You can do so by completing a form and lodging it with ASIC. If you have registered for online access, then you can notify ASIC of your company changes online. For more information about notifying ASIC of changes to your company, see here.

Beware – early access to super is a SCAM!

Danni Kirwan, Marketing Executive

The ongoing global financial crisis has left many people looking for extra cash, and in some cases as ASIC warns, attempting to gain early access to their superannuation.

Late last week, ASIC released a statement addressing the increase in the number of people trying to gain illegal early access to their super – primarily through scams involving the establishment of SMSF’s. You can read the full statement from ASIC here

While establishing an SMSF will give you greater control over how your funds are invested, there are restrictions in place that govern what you can invest your super in, and when you can draw on your super.

Despite what promoters of illegal schemes may tell you, early access to Superannuation is only granted in very limited circumstances – such as financial hardship or on compassionate grounds. If applying for early access to super fund on the basis of financial hardship for example, you must prove:

• That you have been receiving welfare benefits continuously for 26 weeks, and;
• That you are unable to meet your day to day living expenses.

If that is the case:

• You can only receive up to $10,000.00 in a 12 month period, and;
• The money withdrawn can only be used to cover your day to day living expenses.

ASIC makes it quite clear that in most cases, you won’t be able to access your superannuation until you retire.

Beware!
If you are approached by someone claiming that you can set up an SMSF and use some of the funds to pay off debts or ease you cash flow problems, beware! Withdrawing money from your super before you retire could open you up to significant penalties and back taxes.

As a trustee of an SMSF, you could be fined up to $220,000.00 and face a jail term of up to five years if it can be proven that you knowingly allowed illegal early access to your superannuation funds. Even if you return the money to your SMSF, it will still be taxed at a higher non-complying tax rate.

If you are thinking about establishing an SMSF to give you greater control over how your funds are invested, the chances are you will also being seeing an advisor to help you invest your funds. If an advisor suggests early access to your super, you should call ASIC or the ATO to make sure you won’t make yourself liable to penalties.

Call ASIC
If you believe that you may have started the process to illegally access funds – for example by setting up an SMSF to roll funds into and access some of those funds early – the ATO urges you to call them on 13 10 20 to discuss your situation.

The ASIC website also has examples of early release schemes – including an extensive list of schemes that they have taken action against. You can see it here