Expansion of franchise business

Barry Black and Jeremy Jackson operate a successful tanning salon franchise in Australia called Bondi Tans. Barry and Jeremy want to expand their business to the US and plan to see franchises across the west coast of America.

The business is currently operating through an Australian company Bondi Tans Pty Ltd, which is the corporate trustee of the Bondi Tans Unit Trust. The unit holders of the Bondi Tans Unit Trust are Barry and Jeremy’s respective family trusts.

As Barry and Jeremy are hoping to grow the business in the US with a view to exit in the short to medium term, they chose to set up their US operations through a US C-Corporation due to the relatively lower corporate tax rates and the favorable outcomes from a capital gains tax perspective under the Australian capital gains tax regime and potential access to CGT concessions.


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