Choosing a business structure is one of the key decisions you will make when starting a business. This choice depends on the size and type of business and how you intend to run the business. Each structure has its pro’s and con’s and there are a number to choose from when starting or expanding your business.
The four most common types of business structure in Australia are:
- Sole trader: The simplest structure, gives you full control
- Company: More complex, limits your liability because it’s a separate legal entity
- Partnership: Made up of 2 or more people who distribute income or losses
- Trust: Where a trustee is responsible for business operations
When choosing a business structure, choose the one that best suits your business needs, and make sure you consider each option carefully.
Business structures can determine:
- The licenses that you require
- How much tax you pay
- Whether you are considered an employee or the business owner
- Your potential personal liability
- How much control you have
- Ongoing costs and volume of paperwork
There is the potential to change your business structure throughout the life of your business as it grows and expands.
- Summarised From: business.gov.au