SERVICE ENTITY DOCUMENTATION (as suggestedrequired by ATO) The by lindahy

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									                   SERVICE ENTITY DOCUMENTATION
                     (as suggested/required by ATO)



The ATO’s guidelines suggest the following documentation should be in
place. We have added brief annotations in italics. We suggest you review
these items and make sure the documents you are responsible for are in
place and available.

We have heard some comments from accountants and their clients that these
requirements are onerous. We disagree: almost all documentation required
should be in place anyway for any bona fides business.


      Minutes of meetings concerning the service entity.

      Provided already by MAS annually. We will add a set which addresses
      all the ATO’s concerns.

      Budgets, business plans, organisational charts for both the
      business and the service entity.

      We hold organisational charts for each client (to jog our own
      memory...). Budgets and business plans need only be drawn up as
      required. We don’t believe the absence of a formal business plan
      would be a problem. In many cases we have copies of correspondence
      on file, discussing the specific business issues, which would satisfy
      these requirements anyway.

      Detailed Profit & Loss Statements and Balance Sheets for both
      your business and service entity.

      Provided by MAS annually.

      If you are a partner in a partnership, your partnership
      agreement/s as varied.

      Not applicable to most clients. We advise against partnerships for
      obvious potential malpractice issues.

      The constituent documents for the service entity.

      Provided by MAS where we established your structure.

      Resolutions by the service entity about distributing profits.

      Provided by MAS each year in the required format.
A list of personnel employed by the service entities together with
relevant duty statements.

Your annual PAYG Payment Summary Statement, Group Certificates,
MYOB/Quicken data files etc should be more than sufficient. Where
very few staff, or only relatives are employed you should have a formal
statement of duties (which we have always recommended, see also
Terry McMaster’s ‘Business of Medicine 2002’)

Employment contracts, timesheets, other personnel records and
reporting guidelines for employees of the service entity.

Again, not different from what we have always recommended. This is
particularly important where only one or two close relatives are
employed.

Relevant Insurance contracts.

Shouldn’t be a problem: all service entities should have Work Cover in
place anyway. We assume all insurances regarding assets of the
service entity are in the name of that entity. Please check.

Relevant lease and rental agreement.

Shouldn’t be a problem for any of our clients. All leases should be in
name of the service entity (although the doctor could be personally
guarantor). Please check anyway. If renting/leasing from a related
entity we advise a formal agreement and an independent valuation.

                 ******************************************

19 July 2005

								
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