Business Structures
Your selection of business structure is one of the most important decisions you will make when starting a business.There are many factors to consider with each business structure having its own advantages and disadvantages.
The needs and requirements of which structure to choose may depend on various factors, including:
1. the type of business being conducted or acquired
2. your objectives in acquiring or expanding the business
3. stamp duty, capital gains tax, income tax position (see also Taxation)
4. costs of registration or incorporation and annual administrative costs
5. whether the business is or will be conducted in one State or more than one State
6. asset holdings, whether in personal names or held by another entity (see also Asset Protection)
7. whether you are acquiring appreciating assets
8. who and how many people are involved in the business as owners and employees
9. financing requirements of the business and any securities to be provided (see also Banking and Finance)
Forms of Business Structures
Each structure has its own advantage and disadvantage taking into consideration the above factors. Some forms of business structures are:
>> Sole proprietorship – where a person operates a business in his/her own name with a business name registered in the relevant State where the business is operating
>> Partnership (see also Partnerships) – where two or more individuals (or trusts) set up a business and share the profits (losses) of the business in accordance with the partnership agreement
>> Joint Venture (see also Joint Venture Agreements) – where two or more individuals (or trusts/companies) wish to operate a business without necessarily forming a company and certainly do not wish to form a partnership.
>> A Proprietary Company (see also Corporations/Companies and ASX Listing and Compliance) – where up to 50 shareholders (or individuals/companies/trusts) can set up a business with the protection of limited liability
>> Trusts (see also Trusts) – where individuals do not wish to own the business in their own names for asset protection and also have the option to split the income with other family members
You should consult your solicitor and tax advisor before setting up an entity to operate a business or restructuring an existing business or holding.
If you are interested to know something more on Business Structures and other details,you are welcome to the Commercial Law site.
Processing your request, Please wait....
