Common Business Structure in Australia:
One of the key decision which you need to keep in mind is the right business structure when you embark on setting up your business. The choice depends on the area of business and the number of people which you need to start the business. The structure which you choose to implement your business ideas has an impact on the tax you pay, asset protection and costs to set up.
There are number of structures which you can choose from when you are starting or expanding the business.
The 4 common types of business Structure in Australia are:
1. Sole Trader– The simplest structure among the business structure and it gives you full control.
2. Company – more complex, limits your liability because its separate legal entity.
3. Partnership – Its made up of 2 or more people who distribute income or losses.
4. Trust – Where a trustee is responsible for business operations.
Choose a Structure:
When choosing a business structure which best suits your business activities you need to consider the following factors which determines the way in which the business is proposed to be conducted.
Your business structure can determine:
· The licenses you require
· How much tax you need to pay
· Whether you’re considered an employee or the owner of the business
· Your potential business liability
· How much control over the business
· Ongoing costs and volume of paperwork for the business
The decision to choose the right business structure can be made during the life cycle of the business, as your business grows and expands you can change the structure which suits your business.
Before deciding which business structure to use, seek advice from a professional business adviser, lawyer or accountant.
