BUSINESS STRUCTURES

Deciding on which legal business structure to use for you and your business is such an important decision that you should get advice from a qualified independent business, financial or legal adviser.

 

The structure you choose will depend upon the size and type of business, along with your personal circumstances and how much you want to grow the business.

 

You can change your business structure during the life of your business should you find that a new structure will meet your needs better.

 

Here’s a few examples of business structures and their benefits and risks:

 

  • Trading in a company which gives limited liability for the business owner but is an expensive way to trade;

  • Trading in a family discretionary trust which allows the tax payer to distribute the profits to a number of taxpayers and achieve a far better result;

  • Trading as a unit trust if there are unrelated parties.; The un its can be owned individually or by family trusts;

  • Trading in a family discretionary trust with a corporate trustee. This give the trustees limited liability protection;

  • Trading as a partnership where the profits and or losses are taxed in the hands of the partners but the partners are personally liable for all liabilities of the business. If one partner is sequestrated, this directly affects the business;

  • Operating as a sole trader where the profits and or losses are taxed in the hands of the sole trader but the sole trader is personally liable for all liabilities of the business which in turn affects his personal assets such as the main residence.

 

If you would like to know more about Business Structures or discuss what the best option for you, call Barry Levin on 08  9226 5123 or email barry@charterfin.com.au

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