Business Structure Redcliffe

Understanding the advantages and disadvantages of various Redcliffe business structures is critical to getting your new venture off to a good start. Each business structure offers a distinct opportunity to engage in specific activities, such as capital raising. It also has an impact on the asset and risk protection of directors, as well as tax implications and other business obligations. Understanding the various advantages of each business structure can be difficult. This is why we chose to offer Redcliffe business structuring to help you get started on the right foot.

Please visit our pages for business structure in Brisbane, Sunshine Coast and North Lakes.

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Table of contents

Common types of business structures in Australia:

When we talk about a business structure, we are referring to the legal structure of an organisation. There are four major types of business structures in Australia. These are their names:

  • Sole trader
  • Company
  • Partnership
  • Trust

We explain each of these business structures in the following section of this page.

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Choosing the Best Business Structure

It can be difficult to choose the right path; however, you are not bound by one and can always change your business structure as it expands and grows. Each of these business structures can affect your costs, assets, and tax liability. Let’s go over each of these business structures.

Sole Trader

As a sole proprietor, you are legally responsible for all aspects of your business. A sole trader typically makes all business decisions and can hire others to assist them in running their business.

Tax liability: As an individual, you must pay tax on any income generated by a sole proprietorship.

You must also pay GST and file a business activity statement if your annual revenue exceeds $75,000.

Partnership

The owner, like a sole trader, is personally liable for all aspects of the business; however, in a partnership, two or more people may take joint ownership and split profits and losses.

Individuals can increase their chances of success by pooling their assets and skills in a partnership business structure. A partnership may also hire employees to help them run their business.

Tax liability: Partners are taxed as individuals on business income shared among partners. You must also pay GST and file a business activity statement if your annual revenue exceeds $75,000.

Company

A company differs from the previous examples of business structure in that it creates a legal entity that is separate from you. This means the company can directly own assets and enter into contracts with third parties.

Tax liability: Corporations are subject to corporate tax rates that are different from individual tax rates. The current company tax rate is either 27.5% or 30%, depending on the criteria you meet. You must pay GST if your annual revenue exceeds $75,000 AUD.

Trust

A trust is a legal entity through which trustees conduct business on behalf of trust members. Trust members are also referred to as beneficiaries. This type of structure can be difficult to set up and costly.

The trustee is responsible for any debts and liabilities and can be either an individual or a corporation. Trusts are frequently used to manage, protect, and transfer family assets from one generation to the next, such as stock, personal property, and the family business.

Tax liability: The trustee distributes the business profits to the beneficiaries, who then pay income tax on the income received at their marginal individual tax rates.

Business Structure FAQs

What are 4 basic business structures?

1) Sole trader business structure.
2) Partnership business structure.
3) Company business structure.
4) Trust business structure.

What is a business structure?

A business structure is a legal framework that governs how a company or business operates on a daily basis. A sole proprietorship or partnership, for example, is simple to form because they do not have to meet ongoing requirements such as shareholder meetings and voting. Your company’s structure is ultimately determined by its goals and specific requirements.

How will the business structure I select affect my company?

One of the most important decisions a business owner must make is selecting the right business structure.

A business structure is a company’s or organisation’s legal structure and obligations. Your business structure of choice will have an impact on:

  • how much tax you must pay
  • ongoing reporting requirements
  • business set-up costs
  • the way your business operates
  • legal liability

Sunshine Coast Business Structure location

North Lakes Business Structure location

Take a look at some of the additional services we offer in Redcliffe to promote success.

At Total Business Partners, our motivation comes from seeing our clients succeed. We strive to deliver the highest level of service and are Xero certified accountants with expertise in structural business planning and financial management. Our professional services are provided throughout Redcliffe and the wider Brisbane region including North Lakes, as well as across the Sunshine Coast.

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