A lot of business owners only see the need to hire the services of a Melbourne accountant or Melbourne accounting firm when it’s time to file taxes or when they encounter certain problems.
However, one cannot stress enough the importance of seeking the expertise of a Melbourne accountant or Melbourne accounting firm even at the start of your business. This is especially important when determining the appropriate business structure to best suit your specific circumstance.
Your choice of business structure will actually impact different aspects of your business such as tax implications, ongoing costs, asset protection as well as legal requirements.
There are basically four types of business structures. These are:
As the name implies, you as a sole proprietor wields full control and management of the business. This particular structure is ideal for small businesses and those with minimal capital investment.
A partnership will consist of two or more individuals, (maximum of 20) who enter into a joint ownership of a business. This structure is effective in combining knowledge, expertise, resources as well as any additional finances.
A partnership is easy and inexpensive to establish. It is highly recommended to have a written partnership agreement which will outline everything with the assistance of your Melbourne accountant or Melbourne accounting firm.
A proprietary limited company is a legal entity that comes with its own income tax liability. Under the Corporations Law, this structure is incorporated and is regulated by the Australian Securities & Investments Commission (ASIC).
This is an arrangement where a party or the trustee, who is either a company or person, carries the business and holds the assets for the benefit of other parties, also called the beneficiaries. Among the most common forms of trusts is the discretionary trust, which is otherwise known as the discretionary trust.
To learn more about the pros and cons of these structures, take time to discuss your options with your Melbourne accountant or Melbourne accounting firm.