Is Your Family Business Structure Supporting Your Future – Or Holding You Back?

Running a family business isn’t just about profit—it’s about people. Your business structure shapes everything from day-to-day operations to generational succession and legal risk. Whether you’re a tight-knit farming family or a growing multi-entity enterprise, the right framework can help protect your relationships, your wealth, and your legacy.

At Symmetry Accounting & Tax, our team of Perth-based accountants and business advisors works closely with family-run enterprises to ensure their structure supports both the present and future. Let's explore how to align your business structure with your family's unique goals.

Why Partnerships Often Miss the Mark in Family Business

When families first go into business together, partnerships often seem appealing. They’re easy to set up, share responsibilities equally, and come with less regulatory complexity. This is particularly common in agricultural businesses across regional WA.

However, partnerships have some significant limitations:

• Unlimited personal liability – Each partner is exposed to the full financial risk of the business.

• No continuity – If one partner exits or passes away, the entire partnership is typically dissolved.

• Lack of ownership flexibility – Unlike shares in a company, there’s no clear way to divide interests or pass them down.

• Disputes can get personal – Without formal governance, family disagreements can become business-ending.

  
  

Bottom line: Partnerships can hinder succession planning and are rarely robust enough to support long-term, multi-generational family goals.

Stronger Options: Companies and Trusts in Family Businesses

Most successful family businesses evolve toward more sophisticated structures, often combining companies and family trusts. Each has its own strengths—together, they offer a powerful hybrid model.

The Benefits of a Company Structure

A company is a separate legal entity under the Corporations Act 2001. This provides a clear distinction between the business and the individuals behind it—essential for liability protection and succession.

Key advantages include:

• Limited liability – Personal assets are shielded from company debts.

• Clear governance – Directors manage the business, while shareholders (often family members) retain ownership.

• Smooth share transfers – Ownership can be passed down or sold with defined rules.

• Lower flat tax rates – Companies benefit from a flat corporate tax rate, often more favourable than individual tax brackets.

• Professional credibility – A company structure supports capital raising and enhances business reputation.
  

Ideal for: Growth-focused family enterprises involving multiple family members, or when external capital is introduced.

The Flexibility of a Family Trust

Also known as a discretionary trust, a family trust allows a trustee to manage assets for the benefit of family members, distributing income at their discretion each year.

Advantages include:

• Tax-effective income allocation – Optimise tax outcomes by distributing income to lower-taxed family members.

• Asset protection – Shields assets from personal liabilities or family breakdowns.

• Capital gains tax discount – Eligible for the 50% CGT discount after holding assets for over 12 months.

• Privacy and control – Operates under a private trust deed, away from public scrutiny.
  

Best for: Early to mid-stage family businesses focused on flexibility and tax planning, particularly when control remains in the hands of a few.

Planning for the Next Generation: Governance Tools You Need

As your business grows and generations shift, decision-making becomes more complex. To prevent disputes and promote clarity, your structure should include key governance documents.

Company Constitution

This is the legal playbook that governs internal company affairs, covering:

• Director appointments and powers

• Shareholder and board meeting rules

• Share rights and transfer protocols

• Dividend and dispute procedures
  

Shareholders’ Agreement

This private contract outlines how family shareholders interact with each other and the business. It can include:

• Entry/exit rules for shareholders (e.g., on divorce or death)

• Valuation and buyout terms

• Roles for active vs. passive family members

• Succession planning and capital funding obligations
  

Why use both? The constitution covers formal, legal rules visible to regulators, while the shareholders’ agreement handles private, often emotional family matters—creating a balance between governance and relationships.

The Hybrid Approach: Trust + Company = Long-Term Stability

One of the most effective structures for family businesses is a family trust that owns shares in a company. This approach combines:

• Tax-effective income distribution

• Legal protection and limited liability

• Structured succession planning and governance
  

This dual-entity model is especially valuable for mature businesses preparing for leadership transitions or welcoming new generations into the fold.

Get Expert Advice – Build a Structure That Grows with You

There’s no one-size-fits-all when it comes to family business structures. Your choice should reflect your family's values, your growth ambitions, and how you want decisions to be made today—and tomorrow.

At Symmetry Accounting & Tax, we provide specialist business advisory services tailored to Perth’s family-run businesses. Whether you’re starting fresh, restructuring, or preparing for generational change, our experienced accountants are here to guide you through the options with practical, strategic advice.

Let’s future-proof your business—contact Symmetry Accounting & Tax today on 0420 970 369.