Whether you are a seasoned or a novice entrepreneur, selecting the business structure that aligns with your goals can take time and effort. There are multiple business structures in Australia to choose from, but they all come with different pros and cons. However, most owners need to pay more attention to this essential decision and end up merging their personal and business goals in the process.
If you are serious about setting up your business, read this blog. In this piece, we will see the different organisational structures that can help you determine your business type in Australia.
So, let’s continue reading to understand the different business structures and how to select the right one for you. There are seven main business structures in Australia.
This is an individual who carries on a business on their own. They can trade under their name or the company’s registered name. These individuals are taxed based on the same rate as individual taxpayers. This is the simplest form of business structure as it has a lower establishment cost and nominal legal requirements. However, the major con of this structure is that the owner is responsible for any liabilities that happen while running the business.
This separate legal entity can hold assets or properties in its name. Therefore, it has the same rights as an individual and can incur debt, sue others or get sued by others. The words “Pty Ltd” show that the business is registered and is trading in its account. These structures are owned by shareholders or managers who conduct the company’s daily activities.
However, the shareholders are eligible to limit their liabilities and are not responsible for debts incurred by the company. Corporation laws govern these structures and have to follow several duties and obligations. Qualified business structure lawyers in Perth can assist owners in filling in their tax and legal obligations.
Two or more people can form a company in partnership. In this business structure, the income is received jointly. Most partnerships are established by a partnership agreement, which states the rights and obligations of a partner. These are mainly inexpensive to form and continue as they are not taxable. Each partner pays tax on their shares of the net income earned annually in this structure. The disadvantage of this business structure is that it brings down both partners if one of them is responsible for something. Both of them are jointly and equally liable in these circumstances.
Under this business structure, a trustee owns the properties or the assets of the trust and carries out the business on behalf of the beneficiaries. A trustee can be an individual or an organisation. They are responsible for everything that happens in the trust, including the profits and the losses.
This business is expensive and complicated; therefore, hiring a qualified lawyer is necessary to avoid partnership and shareholder disputes. They will explain the licences and registrations to set up the trust.
It is a member-owned business structure with a minimum of five members. They carry on business in all sectors and maybe a profit or non-profit organisation. They provide goods or services to the members, which would have been very costly if they had needed to access these individually.
The indigenous people of Australia can register as an indigenous corporation through OROC. Such corporations can claim additional benefits like secure land, education, housing needs, recognition, legal assistance, etc.
It consists of 2 or more people, organisations, and companies who work towards a specific goal. People can enter a joint venture to achieve long or short-term goals like creating a new product, providing a new service, expanding markets, etc.
If you plan to start in Australia, knowing the intricacies of the different business structures is important. Partnerships, companies, sole traders, joint ventures, and others are some types you can explore.
Expert advice is necessary to make an informed decision. If you are looking for legal assistance, look no further than corporate lawyers. For issues related to business space and rules, you can also get in touch with a Corporate lawyer in Perth WA.
These professionals can help you in all things related to business. From income tax returns to human resources dispute resolutions, they can handle it all. To fulfil your business-related needs, contact them today!