One of the most important decisions you need to make when starting a small business is the choice of business structure. You should be mindful of the fact that your business can affect:
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These include the type of business you are setting up, if and how many others are involved in the business, how you want profits (or losses) to be shared and who is going to be legally liable for the debts of the business. Other considerations include the anticipated profitability of the business, the relationship of the owners and the financial and tax positions of all the parties involved. When evaluating your choice of business structure you should look to:
The type of legal structures used by Australian business operators in June 2009 showed a 5% drop in the number of partnerships and a 2.5% drop in sole proprietors. In contrast, there was a 3.3% increase in trusts while the number of companies remained stable compared to the previous year.
- Maximise the Protection of Your Assets
- Minimise Tax Exposure (including Capital Gains Tax)
- Allow for Admission of New Partners or Investors
- Comply with all Legal Requirements
The type of legal structures used by Australian business operators in June 2009 showed a 5% drop in the number of partnerships and a 2.5% drop in sole proprietors. In contrast, there was a 3.3% increase in trusts while the number of companies remained stable compared to the previous year.