Australian Business Structure

If you want to be your own boss and don’t work under others, becoming an entrepreneur is right for you. However, you need to look at different angles of setting up a business in Australia. Besides a location, registration, business name, and other legal formalities, the most important thing you have to consider is the type of business structure you want to have. No matter which business structure you choose, you will need accountant service for small business Melbourne.

Know that in Australia, small businesses are based on these four types of business structures:

A) Sole Trader

B) Partnership

C) Company

D) Trust

Remember, the type of business structures you choose will affect your tax, asset, and liabilities. Moreover, the cost of running

Since you will be the sole owner, any profit from the business will be your income, which will be liable for taxation at a rate fixed for individuals by the Australian Taxation Office. To be a sole trader, you have to get an Australian Business Number (ABN).

Pros

1) Simplest and inexpensive business structure

2) Fewer tax and legal formalities

3) No need to follow employment rules and regulations are you alone are an employee and employer

Cons

1) No chance to shift responsibilities to others

2) You alone have to suffer business loss

3) Difficult to finance your

The trustee is responsible for the administration and operation of the trust and is responsible for earning profit for others called as beneficiaries. A formal deed is necessary to form a Trust. In case you are appointing a company as the trustee, you have to register the trust with the Australian Securities and Investments Commission (ASIC) if it runs the business under a new name.

Pros

1) If a company is trustee, asset protection is provided

2) Distribution of income and asset is flexible

3) Beneficiaries are exempted from the trust debts

Cons

1) Administrative and management costs are higher

2) Profit is not distributed, but losses

3) Beneficiaries are liable for taxation from income received from the trust

These are the main four business structures you must know and why they matter. Before setting up a business, you can look at other possible business structures as well. For that, do consult Numbers Talk and protect yourself from long-term