When commencing a business, it is imperative to select the structure which best suits your needs. There are 4 types of business structures available. We have provided detail on each below:
A sole trader refers to an individual operating a business in their own right (can trade under a trading name). It is a simple business structure which provides the owner with all decision making capabilities. A sole trader will use own TFN, have an ABN and may have other tax registrations such as GST. Some key points to consider include:
A partnership is an arrangement whereby two or more entities (individuals, companies, trusts etc.) operate a business together with a view to make a profit. The partnership will have its own TFN, ABN and may have other tax registrations such as GST. Partnerships will generally have an agreement which outlines the conduct of the business including profit share arrangements, arrangement for salaries, admission or retirement of partners etc. Some points to consider include:
A company is a separate legal entity, distinct from its owner/s (shareholders). Companies are governed under Corporations Law which is governed by ASIC. Companies must keep ASIC up to date in regards to company details, change in directorship, changes in shareholders, and must pay an annual review fee per annum. The company will have its own TFN, ABN and may have other tax registrations such as GST. Some points to consider include:
A trust is a relationship where property is managed by one or more persons or entities (trustees) for the benefit of one or more persons or entities (beneficiaries). The trustee is the legal owner of the property while the beneficiaries have an interest in it. The trustee is obliged to distribute the income and capital of the trust according to the trust deed. The trust will have its own TFN, ABN and may have other tax registrations such as GST. Some points to consider include:
Please contact Infinity Group on 9792 2772 to arrange your no obligation, free one hour consultation with one of our highly qualified staff members.
Established in 1999, Infinity Group is a multi-service firm that specialise in the areas of Finance, Property, Accounting & Taxation, Insurance and Migration Services.