Setting up a business seems to be easy. All you may need is an Australian Business Number and you're ready to go. This is partially right.
Business Structure
Decisions you will make while setting up your business may have impact on your asset exposure, personal liability and taxation of profits. That is why we recommend seeing us to plan your business structure properly. Proper business structure may be helpful in various future events:
- growing your business
- taking on new partners or investors
- business succession
- unlikely and undesired bankruptcy
- profit distributions and taxation
- costs of annual compliance work
- selling your business
Proper business structure can protect you and your assets from liability if things will go wrong. It will also allow you to minimise your tax. It is very important to set the proper business structure from the beginning, but you can also restructure your business anytime. Restructure of running business may have tax implications.
There are five main business structures:
- Sole Trader - simpliest, all you need is ABN
- Partnership - two or more people working together, full exposure, transparent entity
- Company - separate legal entity, providing certain planning and asset protection benefits
- Trust - tax planning and asset protection benefits
- Self-managed Superannuation Fund - not really used to run business, but may support some parts of it
The above entities can be mixed by ownership and partnered to provide maximum benefits and protection.
Please contact us before you will start your business activities and we will plan a proper business structure for your business, considering your current budget and requirements. We will also prepare you for what your business will require to run efficiently and in line with the law.
Other things you may consider
- Workers Compensation insurance - crucial if you will employ other people
- Public Liability insurance - if you will interact with the public
- Product Insurance - if you will manufacture products
- Accounting and record keeping requirements for your business
- Opening the right bank account to save on fees and earn interest