Your initial choice of business structure is crucial, although you can change that structure in the future.
However, changing your business structure can be a disorganised, confusing process that can lead to tax consequences. So, getting it right at the start and always reviewing your current circumstances is critical.
Your business structure can determine your:
- tax liabilities;
- responsibilities as a business owner;
- potential personal liability;
- asset protection; and
- ongoing costs and the volume of required paperwork.
The most common types of business structures in Australia are: sole trader; company; partnership; and trust.
Deciding on a business structure come down to:
- the type of business you are going to run;
- its risk profile;
- plans for growth;
- the involvement of others; and
- how to come to decisions.
Each structure has different upfront and ongoing costs. The way that tax affects the different business structures will also factor into your decision. Ultimately, there is no one-size-fits-all answer when choosing a business structure. The right choice for you will depend on your individual circumstances and objectives.
Check in with your trusted advisers to assist.
Katrina Brennan, Principal, SRJ Walker Wayland Business Growth Advisors, Accountants and Auditors, Level 2/2 Innovation Parkway, Birtinya, 5301 9957, srjww.com.au
This column is part of our Business 2 Business (B2B) series featuring industry leaders sharing their expertise. For more great articles, SUBSCRIBE to our FREE news feed, direct to your inbox daily. All you need to do is enter your name and email below.
