BUSINESS STRUCTURES AND TYPES
Choosing a structure
When deciding on a structure for your
business, it is imperative to choose the one that best suits your business
needs, keeping in mind that there are advantages and disadvantages for
each structure.
It’s important to investigate each
option carefully, as choosing your business structure is an important
decision.
Business structure you choose depends
on following factors –
- The licenses you require to run your business.
- Taxation and succession benefits.
- Whether you’re considered an employee, or the
owner of the business
- Personal liability in case of a law suit
against the business.
- Control you have over the business.
- Ongoing costs and volume of paper work for
your business.
As your business grows and expands,
you may decide to change your business structure, or
to restructure your business. It is important to note that you can
change your business structure throughout the life of your business but it
comes along with pitfalls and complications. Therefore it’s best to decide your
business structure right from onset of your business.
Obtaining legal or other professional
advice can help you understand your own particular circumstances. It is
important to determine your business structure and business type before
you register a business or company as the steps may differ.
Following are the four structures
that are most commonly used by small businesses in Australia –
- Sole trader: an individual operating as
the sole person legally responsible for all aspects of the
business. Like other structures, as a sole trader you can
employ people to help you run your business.
- Company: a legal entity
separate from its shareholders.
- Partnership: an association of
people or entities running a business together, but not as a company.
- Trust: an entity that holds
property or income for the benefit of others.
For further assistance, call Expert Tax on 0449 952 855 to book a no
obligation appointment to discuss your business structuring needs before
deciding on your business’s structure and type.
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