New Business Set-Up, Structure and Advice
Thinking of starting your own business? The best first step is to understand your options and determine which business structure suits you and your business plans. Our expert Business Set-Up Accountant Geelong can help you through this process and support your business as it grows.
Working with Sole Traders, Small-to-Medium Businesses and Companies, we can assist you to improve your business tax, accounting and bookkeeping. Providing a wide range of business solutions and advice, we work with you to ensure that your business it correctly set-up and running well.
Please speak to your MAS Tax Accountants Geelong for personalised advice.
Business Structures
One of the key decisions you’ll make when starting a business is which legal structure to use. Because it’s such an important decision, you should get advice from a qualified independent business, financial or legal advisor. The structure you choose will depend on the size and type of business, along with your personal circumstances and how much you want to grow the business. Keep in mind that if you need to, you can change your business structure later on if you find that a new structure will meet your needs better. Our Business Set-Up Accountant Geelong can assist you through the processes, as well as help you to maintain ongoing tax and accounting obligations.
Legal Structure
Comparison of sole trader, partnership, company and trust:
Business Structures |
Sole trader |
Partnership |
Company |
Trust |
| Is the structure difficult to set up? | No | No | Yes | Yes |
| Is it expensive to register? | No | No | Yes | Yes |
| Do I retain complete control? | Yes | No | No | No |
| Are there complex reporting requirements? | No | No | Yes | Yes |
| Will my assets (house etc.) be under threat if my business goes into debt? | Yes | Yes | Not as likely | Not as likely |
| Do I receive full profits made from the business? | Yes | No | No | No |
| Can I employ staff? | Yes | Yes | Yes | Yes |
| Do I have to pay myself superannuation, workers comp etc? | No | No | Yes (if employed by the company) | Yes (if employed by the company) |
| Can I change the legal structure easily? | Yes | No | No | No |
| Do I have the ability to plan tax through avenues like income splitting? | No | Yes | Yes | Yes |
| Is it easy to raise capital? | No | Yes | Yes | Yes |
| Is it easy to dissolve or exit? | Yes | Yes | Yes | No |
Choosing a structure before you start your business
The key is to ensure that whatever structure you choose is in place before you start the business and that you’re able to comply with the various legal requirements it carries.
There are six structures that you can choose from. However, the first four are the most widely used in Australia:
Sole trader
A sole trader is the simplest form of business structure and relatively easy and inexpensive to start and maintain.
Partnership
A partnership involves two or more people (but no more than 20) going into business together.
Company
A company is a separate legal entity capable of holding assets in its own name. Shareholders own the company while directors run it.
Trust
Unlike a company, a trust is not a legal entity. They are often used in connection with running a business for the benefit of others.
Cooperative
A cooperative is a member-owned business organisation with at least five shareholders, all of whom have equal voting rights regardless of their level of involvement or investment, although every shareholder is expected to help run the cooperative.
Association
Incorporated association offers a relatively simple alternative to forming a company for small non-profit groups such as charities and hobbyists along with sporting, cultural and recreational organisations.
Factors to consider
Each structure has advantages, disadvantages and responsibilities, which need to be considered before making a decision. Your accountant or business advisor can help you make the right decision, but some of the factors to consider include:
- Taxation requirements and liabilities
- Legal liability
- Costs
- Capital
- Management requirements
Your structure should accommodate the potential for changing circumstances with minimal disruption; provide adequate asset protection; opportunities for legitimate tax reduction and efficient distribution of profits. What’s next… How feasible is your business idea? Get started on your business plan. What are the tax requirements when starting a business?
Learn more about our Geelong South office, including the Personal Tax, BAS & GST, ad Business Services that we provide.
For more information or to make an appointment, please contact us below or call us on 03 5222 3265
More information: http://www.smallbusiness.wa.gov.au/business-structures/
