Choosing an appropriate business structure is one of the biggest and most important decisions you’ll make when starting a business. This is so important we strongly advise you seek advice from an experienced advisor.
The correct structure will provide you with personal and business asset protection and peace of mind. Being in business carries with it significant risks from the moment you contract to a customer, supplier, employee or any other party. It is imperative that the business structure provides protection from these risks.
There are a number of structures you can choose from, here are the four most widely used in Australia:
- Sole traders
Business Structure 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;
- capital; and
- 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.
For a comparison of sole trader, partnership, company and trust see this link WA Small Business Development Corporation website.
So whether you are choosing a structure before you start your business, or want to make changes to your existing legal structure, Business Advice Perth can help guide you in the right direction and take the stress and effort out of the process.