CHOOSING THE RIGHT STRUCTURE FOR BUSINESS IN AUSTRALIA

There are two major things that you need for doing great business in Australia. One is the adequate knowledge of business laws of Australia and the other is choosing the right business structure in Australia based on the Australia’s business laws and your needs.

Choosing a right business structure is very essential. This blog titled, ‘Choosing the Right Structure for Business in Australia’ aims to discuss various types of business structures prevalent in Australia and how to decide the best among them.

Types of Business Structure

Generally, there are three types of business structure. These business structure have their own advantages and disadvantages, therefore its crucial to decide which structure to choose depending upon your needs. The most common factors that needs to be considered while making decision is the degree of control that you want to have on your business, the degree of liability you can impose upon yourself from business, and the tax implications. These are the major factors that will have long term implications on your business ventures, therefore decide it wisely.

• Sole Proprietorship: It is one of the simplest forms of business structures and the most popular for doing small businesses. This type of business structure provides the owner with complete control. However, it also exposes the owner to unlimited personal liability for the liabilities, if any, incurred in the business.
• Partnership: It is the relationship between two or more people who shares the ownership, profits and control of the business. Depending upon the type of liability, these can be further classified into general partnerships and limited partnerships.
• Company: If anyone is looking for incurring limited personal liability, then you should incorporate your business as company. A company is considered to be a separate legal entity from its owners. This implies that the shareholder’s personal assets are protected from the company’s debts and obligations. It is pertinent to note that incorporating company is more legally and financially complex because in Australia, you would be required to register with Australian Securities and Investments Commission (ASIC). Besides this, you also need to maintain proper corporate governance.

So, all the major business structures were discussed in above-mentioned paras. Now, it is upon you to decide based on your best suitable needs.

Conclusion

It is of utmost importance to understand that the business structuring is most important whether it’s a small and large company, a sole proprietorship, discretionary trust or any other. This is majorly because deciding it will determine your tax as well as personal liability. It will also determine which laws are applicable on your business structure because based on the same you may need to follow some compliances. Hence, choose wisely.

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