Though one of the most critical decisions faced by new business owners is choosing the right structure for their organisation, many individuals fail to give serious consideration to their options – which can lead to serious financial and operational implications down the track.
Having the right business structure in place from the outset is crucial. Factors that can influence your choice of structure can depend on the size and type of business, your personal circumstances, and how much you plan to grow the business. In addition to providing the foundations for tax planning, a correct structure offers the following benefits:
- To protect your major assets (such as your family home) from risk.
- Personal protection from litigation and liability.
- To future proof operational changes i.e. to be able to scale up should expansion be a key priority for your business.
- To minimise the amount of tax you need to pay.
As explained by www.smallbusiness.wa.gov.au, the types of business structures used in Australia include:
- Sole trader – when an individual trades on their own.
- Partnership – when a business is run by a number of individuals or entities (but not as a company).
- Company – a legal entity that is completely separate from its owners.
- Trust – an entity that holds property or income for the benefit of others.
- Cooperative – member-owned business organisation with at least five members.
- Incorporated association – an entity that is typically established for recreational, cultural or charitable purposes.
- Start Up structures.
As business owners and financial experts, Nav Accountants has the expertise to guide business owners with their decision making to ensure they choose the right structure and control from the outset. Without the right advice, choosing a business structure can be overwhelming – and confusing! – and such a critical decision should be made with the support of an experienced professional.
Book a free consultation today with Nav Accountants’ tax specialists to discuss how we can help you.