Legal and Practical Issues to Consider in Incorporating Patent Attorney Practices Mark Vincent Partner

Introduction overview of issues to set the scene for further speakers why bother incorporating? what are the costs and other issues to consider?

Introduction (contd) The legal practice story since the Legal Profession (Incorporated Legal Practices) Act 2000 (NSW). 733 of 4247 NSW firms had incorporated, or were in the process of incorporating at 30 June 2007 recent high profile public companies (Slater and Gordon and Integrated Legal Holdings) duties to court, professional duties to clients and duties to shareholders professional standards issues for lawyers cost/benefit analysis

Why bother? Show Me The Money!

Why bother? pay less tax take home more money A Show me the money! pay less tax take home more money reduced availability of other means of income streaming

Why bother? Protect Your Assets

Why bother? B Protect Your Assets the “corporate veil”, insolvent company, creditors can’t pursue shareholders directors have significant exposure (but less than partners, at least to most creditors) revenue can be made more secure in the hands of family trusts don’t take on unlimited liability for your partners’ problems

Why bother? Flexibility

Why bother? C Flexibility no need for service trust, administrative simplicity non attorney shareholders and directors staff retention, share options succession can be easier than with a partnership which dissolves and reforms with each partnership change retention of working capital when you are out of a company, you are out, liabilities of a partnership can have a long reach.

Make sure you know what you are getting yourself into. Why not? Make sure you know what you are getting yourself into.

Why not? costs, legal accounting, other audit for large private companies (more than 50 staff and $10 million in turnover) payroll tax compulsory super capital gains tax stamp duty what are actual quantifiable benefits?

Options PARTNERSHIP PTY LTD COMPANY HYBRID – Company as Agent for Partnership of Trusts, Unit Trust etc. A Show Me the money x  B. Protect your Assets C Flexibility Costs v Benefits Opportunity Costs? Consider Carefully

Depends on individual circumstances. List is not exhaustive. Checklist Depends on individual circumstances. List is not exhaustive. Issue Comment/ Assesment Income Splitting Audit Costs for large companies Firm vision for the next 5 years Accounting Costs Stamp Duty Legal Costs Payroll Tax Staff Retention Compulsory Super Succession Planning CGT Quantifiable Benefits

Conclusions Framework to keep in mind as the detail unfolds with further speakers Questions?