The document provides information for entrepreneurs on business services offered by MPR Group such as accounting, tax compliance, capital raising, and grants. It also outlines key business considerations including employing staff, seeking investors, cash management, R&D tax incentives, and export market development grants. MPR Group is a business accounting and advisory firm located in Southbank, Australia that can assist innovators with various startup needs.
2. MPR Group
• Business accounting and advisory for innovators
– Accounting tax compliance
– Director and board services
– Capital raising
– R&D and other grants
– Start up services
3. • Will it employ staff?
• Will it raise capital?
• Will it list on the ASX?
• Will you sell it and when?
• How is the company owned?
• Have you considered succession planning?
What does the future of your business
look like?
4. Obligations of companies
• Company tax rate for entities with turnover under
$10M is 28.5%
• Requirement to register and manage GST
withholding and reporting to the ATO (if income will
be over $75,000 per year). Small business can report
on a cash basis.
• Completion and lodgment of annual company tax
return.
• Appointment of a company director.
5. Employing staff
• Paying staff, payroll tax (if monthly salary of $47,916
or higher).
• Superannuation withholding obligations for staff.
• Opportunities to renumerate employees or investors
with shares through ESOPs
• Fringe benefits tax on non cash benefits provided to
staff
• Possible R&D tax incentive rebate on salaries
6. Seeking investors
• Business angels vs venture capital
• Sophisticated investors – no prospectus required for
share issue
• Follow on share issues need shareholder approval
• Early stage innovation company – tax benefits for
investors
• Putting investors on the board
7. • Level of commercial opportunities available
• Likelihood of litigation
• Effects on possible grants (R&D and EMDG)
• Trust structure to hold shares
Separate IP company
considerations
8. Cash management
• Liquidity ratio – the assessment of the ability
to pay debts as and when they become due
• current assets/current liabilities
• A ratio of less than 1 would indicate that the
business is not in a position to pay its debts as
and when they fall due and therefore
technically insolvent
9. R&D tax incentive program
Notional R&D deduction
(No tax deduction for R&D expenses)
Refundable tax offset @ 43.5%
• Grouped annual turnover <$20m and
• Tax exempt entities own <50%
• If tax offset >Tax payable = cash
Non-Refundable tax offset @ 38.5%
• Grouped annual turnover >$20m OR
• Tax exempt entities own >50%
• Tax offset reduces tax payable
• Unused tax offset carried forward
10. Eligible activities
Core Activities
• Experimental Activities
• Core Activities tests
– Outcome can not be known in advance (knowledge gap)
– Experimental activities must be carried out using the scientific basis and
method
– Purpose of activity is to generate new knowledge (ie improved materials,
products, devices, processes or services)
• Example Core Activities
– Software or prototype testing
– Development of new algorithms
11. What is not a core activity?
• Activities are not core R&D activities if a competent
professional in the field is able to deduce in advance how to
achieve the outcome, on the basis of current knowledge,
information or experience.
• Developing, modifying or customising computer software for
the dominant purpose of use by any of the following entities
for their internal administration (including the internal
administration of their business functions):
– the entity (the developer) for which the software is developed,
modified or customised;
– an entity connected with the developer;
– an affiliate of the developer, or an entity of which the developer is an
affiliate.
12. Expenditure related to
eligible and registered
R&D activities
• Salary and wages, contractors,
travel, overheads
• Depreciation and balancing
adjustments
• Other costs that have direct nexus
to R&D activities
• Apportionment applied
Eligible expenditure
13. Eligible activities
Supporting Activities
• Attending conferences for preliminary research
• Researching methods to conduct experiments
• Prior art searches
• Activities monitoring and feedback
• Project planning, management and administration
• Documentation
15. Export Market Development
Grant
• Encourages small and medium sized Australian
businesses to develop export markets
• Reimburses up to 50% of eligible export
promotion expenses above $5,000 provided that
the total expenses are at least $15,000
• Annual application process
