What is your ideal business structure?

The most common structures used by small businesses are:

Sole trader: This is an individual trading on their own. This structure is easy and inexpensive to setup. Some disadvantages are; unlimited legal liability and not being able to share profits which can result in paying up high tax.

Partnership: Two or more people or organisations running a business together. With this structure in place you are able to share profits with your business partners, but you will be personally responsible for any debts of the partnership.

Company: Defined as a separate legal entity from its owners/shareholders. Companies pay flat tax rate of 30%. or 25% if small business. Shareholders are not liable for the debts of the business, it is more expensive to establish and run than partnerships and sole traders.

Trust: An entity which can hold property or income on behalf of its beneficiaries. The main advantages are flexibility for profit distribution (if a discretionary trust) and asset protection but like a company can be costly and complex to run.
Your decision about the business structure will affect; how much tax you pay, asset protection, business operating costs, how others deal with your business and time you spend for running the business.

Determining your ‘ideal business structure’ is a complex question and you should always consult a professional before making any decisions.

Call us for 1hr free consultation about your business structure on 08 83590888.