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Multiple entity structures 043-04040000

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For Complex Assessment Officer (CAO) use only

This document outlines a brief overview of how customers can be involved in multiple entity structures, that is, when they have an interest in 2 or more interrelated private trusts and/or private companies.

Attributable stakeholder

When an entity owns shares in a private company, then the entity may be an attributable stakeholder of the company. This can happen when there is a parent company and 1 or more subsidiary companies, or when a private trust is the principal organisation owning shares in subsidiary companies.

If a company is the trustee for a trust, then the company, known as a trustee company, may be an attributable stakeholder of the trust. If, according to the trust deed, there is no appointor, the company may have control of the trust through its ability to appoint a successor and/or vary the trust deed.

Generally the relationships between entities are determined using the same legislation and documents as when examining a customer's involvement:

  • Module PC - Private Company
  • Module PT - Private Trust
  • last company return to the Australian Securities and Investments Commission (ASIC) and/or databases such as those maintained by ASIC
  • control tests and attribution
  • entity and personal income tax returns and financial statements
  • trust deeds
  • when a company is not using the replaceable rules, the company's:
    • Memorandum and Articles of Association, or
    • Constitution

Often the attribution from 1 entity to another entity will be 100%, which will then be passed from the final attributable entity to 1 or more customers. However, it is possible for the income and assets of an entity to be attributable both to other entities and to customers, and some customers are attributable stakeholders of very complex multiple entity structures.

It is important to remember when legislation uses the term entity, it can be referring to an individual or a business organisation. Therefore the same legislation, policy and disallowable instruments are used in making attribution determinations from entities to customers and from entities to other companies and trusts.

When there is attribution between different business entities, these organisation records must be linked to each other and to any other customers who are stakeholders via attribution, distribution or loans, to enable coding of income and asset attribution.

The Resources page contains instructions to view an attribution diagram which will display a graphical representation of the entity and stakeholder relationships. This will assist Complex Assessment Officers (CAO) and Financial Information Service Officers (FISO) in understanding and communicating the relationships of customers with an entity, especially a multi-level entity.

Contents

Packaged activities

Packaged review activities

Assessing and recording distribution income

Assessing asset attribution

Assessing attribution income

Control tests and attribution for trusts and companies

Creating links between organisations for trust and company purposes

Documents required to assess a private company

Documents required to assess a private trust

Recording attribution income