We are experts in tax and compliance, but did you know we can also help get your new businesses off the ground and running? We work with entrepreneurs, tradies, and freelancers to help guide them on the best way to structure a business for performance and compliance from the outset.

Choosing the right setup can actually save you tax in the long run. It is an exciting time, but it also can be challenging in that each business is different and there’s no one size fits all approach.

There are four main business structures commonly used by small businesses in Australia. We’ll guide you through the options based specifically on your business, to find out what works best for you.

There are four different types of legal structure:

  • Sole trader – the simplest form of business structure. It is also relatively easy and inexpensive to start and maintain.
  • Pty Ltd Company – a separate legal entity from its owners and needs to be registered with the Australian Securities and Investment Commission. Set up costs are higher and the company must lodge its own return, however it offers your personal assets protection from liability and only your company assets are at risk in the event of any legal actions and company debts.
  • Partnership – when two or more people jointly in business with the view of making a profit. And each partner is individually liable for debts incurred by the other partners. This means you have unlimited liability, unlike a Company structure.
  • Trust – a separate legal entity, which also a greater flow of income to many beneficiaries in order to pay less tax. The trustee of the trust controls the trust and determines who receives income.

Each set up provides advantages and disadvantages to the business owner depending on your circumstances, so it is advisable to discuss this with your Taxpro accountant who can guide you through the details.

It is important to consider the pros and cons of each, along with your current and projected future expectations of the business. This includes having an estimated level of profitability in mind because this can help assess the best tax advantages for your likely profits.

Like most decisions, it can be changed down the line, however it can and will incur costs that could be avoided.

For more information or to book an appointment, please contact Chloe on 08 9240 7629 or email: chloe@taxproaustralia.com.au

 

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