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Why It is Important to have Proper Corporate or Business Structure

 For a New Business Venture, it is very important and critical to understand the difference between different types of Business Structures. As each structure has Pros and Cons based on your specific requirements and corresponding Legal& Tax implications.

Before starting a business, you’ll need to look at the advantages and disadvantages of each different business structure and work out which structure best suits your needs and requirements.

The four most common types of business structures in Australia are:

  • Sole trader: An individual operating as the sole person legally responsible for all aspects of the business. Like other structures, as a sole trader you can employ people to help you run your business.

 

  • Company: A legal entity separates from its shareholders. It is important to understand about the differences between a sole trader and a companyto understand the tax differences as well, your potential personal liability and the legal obligations when employing people.

 

  • Partnership: An association of people or entities running a business together but not as a company.

 

  • Trust: An entity that holds property or income for the benefit of others.

Before deciding which business structure to use, it’s important you seek advice from a professional business adviser, a lawyer or an accountant.

 

Izhar Khan – Author is the FCA- ANZ, Business Consultant based In Melbourne Australia associated with Business Consultancy Firm having more than 20 years experience including Blue Chip MNCs like 3M and Stanley Black & Decker across the globe.

 

Disclaimer: The contents of this newsletter is for information only and is not offered as advice. Readers are encouraged to consult a suitably qualified professional adviser to obtain advice tailored to their specific requirements.
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