1300 830 830

Business Structures

Your Business Structure is important

 

Branding Services

Business Structures

Whether you are starting a business, buying a franchise or franchising your business, the type of business structure you choose will affect your legal obligations moving forward.

We have set out below a description of the different business structures commonly used in Australia.

 

Read More:  Starting Your Own Business vs Buying A Franchise

 

Sole Trader

As a sole trader, you have complete ownership and control over your business, operating under your own name.

This business structure offers simplicity and flexibility, allowing you to make decisions independently. However, it also comes with inherent risks as all revenue and liabilities are tied directly to you personally.

Being a sole trader means that you have unlimited liability for any debts or legal obligations incurred by your business. This means that if your business fails or faces financial difficulties, your personal assets may be at risk. It is important to understand that there is no legal distinction between you and your business as a sole trader.

While this structure may be the easiest to set up and maintain, it is crucial to consider the potential consequences. Protecting your assets becomes more challenging as they are not separate from your personal assets.

It is recommended to carefully evaluate the risks and consider implementing strategies to safeguard your personal finances, such as insurance or forming a different business structure in the future.

Despite the risks, being a sole trader can provide a sense of independence and allow for quick decision-making. It is important to weigh these advantages against the potential risks and consult with professionals to ensure you are making informed choices for your business.

 

Partnership

A partnership is a business structure involving two or more people. All of the revenue and liabilities of the business are shared between the partners.

It is advisable to have a partnership agreement prepared so that the rights and responsibilities of each of the partners are clearly set out.

 

Corporation

A company is a separate legal entity which is registered with the Australian Securities and Investments Commission. It has its own assets and liabilities and its profits are taxed at the company tax rate.

A company’s business operations are controlled by its directors and owned by its shareholders. The company constitution sets out the rules applicable to the company and its directors. In addition a shareholders agreement sets out the arrangement between the shareholders.

 

Trust

A trust is a business structure in which the trustee operates the business. The trustee can be an individual or a corporation. The trustee holds income, property or assets for a group of beneficiaries. The powers and responsibilities of the trustee are set out in a trust deed.

 

Joint Venture

A joint venture is a business arrangement in which two or more parties (individuals or corporations) agree to pool their resources for the purpose of accomplishing a specific business activity. In a joint venture each of the parties is responsible for profits, losses and costs associated with the joint venture. The arrangement between the parties is set out in a joint venture agreement.

 

Our Services

Once you decide on the appropriate business structure we can attend to the appropriate requirements which may include:

  • registering a business name;
  • preparing a partnership agreement;
  • registering a company;
  • preparing a shareholders agreement;
  • preparing a trust deed;
  • preparing a joint venture agreement;
  • preparing loan deeds and charges.

 

Contact Us

 

 

Ready to Grow Your Business?

 

Contact Us