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Don’t Lose Your Best Talent!! Loan Funded Share Plans…..They Do Work!

Many recruitment firm owners find it challenging to retain or attract quality managers in their business and often experience difficulties in deriving a successful strategy to compensate them. These days, across many of the private recruitment firms it is common for many of the top performing managers to request “equity” in the business as a form of incentive when commencing employment. In contrast to purely cash-based performance rewards, the provision of equity provides a longer-term and more tangible outcome for the manager via the receipt of dividends, the motivation to increase the business share price and also the opportunity to […]

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Clients Equal People

There are two things that make a great practice: People and Clients. At Sovereign Private both are as important as each other. Whether you are a cadet or a director, all our people are mentored by senior partners. Providing all staff with mentoring session every 4 to 6 weeks, our mentoring program is world class. A vital tool used at the mentoring sessions is a career plan. Staff prepare their career plan every July and set out their aspirations for the year ahead. This could include a promotion, additional study or changing the type of work they are doing. The […]

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Selling Out To Your Business Partner – Tax Advantages

Many private recruitment agencies commence with two individuals. Often these types of “partnerships” are successful in the early stages but may encounter challenges as the business grows and diverges from its initial direction. Over time, and for a variety of reasons, there can be differences of opinions between the owners that can often lead to one owner wanting to buy-out the other. When these differences cannot be resolved and one party wants to take control of the business, there are ways to structure the transaction so that the acquiring party is not required to seek external funding for the purchase. […]

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Contractors with a company and ABN who fall within the super regime

If you engage contractors it is critical you correctly classify who is an “independent contractor” and who is an “employee”. The classification can impact your superannuation guarantee (SG) obligations. Any shortfall (which could also include interest and penalties) may actually be your liability and not the contractor. One factor that needs to be considered is whether the entity you are paying is the same as the entity you have a contractual relationship with. An administrative error could be a costly mistake to your business. You need to ensure these are the same. There is sometimes a misconception that if a contractor […]

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Do You Operate Out Of A Unit Trust But Wish You Operated Out Of A Company?

Many successful recruitment businesses start small. In later years, they can often find themselves operating out of a business structure that is not appropriate for the business going forward. The structure may have been set up with advice from a family friend or a suburban accountant. An example of an inappropriate structure is a unit trust. Operating a business out of a unit trust can make it difficult to maintain working capital as there is a lack of freedom with regard to profit retention and distribution. In addition, you may be require to explain the unusual structure to clients, banks […]

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Expanding Overseas? What are the Tax Traps?

You do not have to look very far to find recruitment businesses expanding outside of Australia. Singapore, Hong Kong and London are popular expansion destinations. This is the case for large and smaller players alike, with the need for a global footprint being seen as a point of difference in placing candidates and competing with the global and larger recruitment businesses. This may also be seen as the next step in achieving desired revenue growth. Heading overseas brings with it a raft of issues. Some of these include funding, staffing, and providing the necessary management and leadership to ensure its […]

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